Income Tax Cut for 93% of Ontario Taxpayers

admin — Wed, 16 Jun 2010 08:57:12 +0000

McGuinty Government’s Tax Changes To Create Jobs, Attract Investment

Starting January 1, 2010, 93 per cent of Ontario income tax payers will get a permanent tax cut, as part of a comprehensive tax plan that will help create 591,000 jobs and make the province more attractive for new business investment.

The province is cutting the first income bracket tax rate by one percentage point, from 6.05 per cent to 5.05 per cent. As a result, Ontario will have the lowest tax rate of all provinces on the first income bracket, and an additional 90,000 lower income Ontario taxpayers will no longer pay any provincial personal income tax.

The comprehensive package also includes $10.6 billion in direct payments and permanent tax relief, including the following:

Starting in August, nearly 3 million low- to middle-income Ontario families and individuals will receive a new, permanent Ontario Sales Tax Credit of up to $260 for each adult and child per year – one of the most generous in Canada.
An additional $270 million in annual property tax relief, through enhancements to the Ontario Property Tax Credit, will benefit 2.3 million low- to middle-income homeowners and tenants.
Starting in June 2010, Sales Tax Transition Benefits will benefit 6.5 million Ontario families and individuals – totalling up to $1,000 for families (including single parents) and up to $300 for single people – in 2010 and 2011.

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Tax system needs change

admin — Tue, 01 Dec 2009 09:49:12 +0000

The Ontario Government is introducing the biggest and most comprehensive tax reform package in decades.

Tax reductions and harmonizing the sales tax are part of a total tax reform package, which, over the next three years, would include $10.6 billion in tax relief for Ontario citizens and $4.5 billion in tax relief for business.

All Ontario taxpayers would see a 16.5% cut in the tax rate on their first $36,848 of taxable income. That is the lowest rate of any province in Canada, and would affect 93% of Ontario taxpayers.

Every low-and middle-income person (including children) will be provided with a permanent annual $260 sales tax credit and the Ontario Property Tax Credit would provide an additional $270 million in property tax relief to tenants and owners.

The proposed HST would not affect items you currently pay both GST and PST on, nor will it affect the following exempt items:

– Basic groceries — Prescription drugs — Municipal public transit — Health and education services — Legal aid

– Most financial services — Auto insurance — Residential rents — Condo fees — Resale homes

– New homes under $400,000 — Child care

– Children’s diapers, clothing and footwear — Children’s car seats and car booster seats — Feminine hygiene products — Books

The proposed harmonization will require federal legislation to levy the provincial portion of the HST which must be voted upon by federal MPs. The federal government has encouraged the provinces to harmonize taxes for some time. As an incentive, Ontario has negotiated $4.3 billion from the federal government to help ease the transition. This money will be passed on to individual Ontarians. Single people earning under $80,000 per year will receive $300, while couples and families earning under $160,000 will receive $1,000.

In order to spend an additional $1,000 on the provincial portion of the HST, one would have to spend $12,500 on items or services on which you currently pay just GST.

Ontario is the business and manufacturing centre of the country, so, naturally, we stand to gain the most by encouraging new investment and increasing competition. When Ontario emerges from this global recession, the world’s economy will be fundamentally different; Ontario must be ready to compete. We cannot attract investment and jobs in the 21st century with a tax system from the 1960s, which is currently in place in Ontario.

We will provide business with input tax credits to effectively eliminate the provincial sales tax that is currently paid through each step of production; from the purchasing of raw materials to shipping, wholesalers and distributors. Ontario is the only jurisdiction in the world that exports 80% of what we make, yet taxes the inputs needed to make these goods. Removing the many layers of embedded taxes will decrease the price of goods.

As a responsible government, during this time of serious economic recession, we have engaged in fundamental tax reform. A vital feature is moving to a single sales tax which is integral to ensure Ontario has a strong future by attracting investment and maintaining competitiveness.

http://www.thebarrieexaminer.com/ArticleDisplay.aspx?e=2125923