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The ministry of Finance believes that the consumption will increase by 1.3 billion and that business investment will increase from 460 million to meet the general demand.
The bunch of measures announced by the government Couillard since 2015 represents a drop of nearly $ 1,300 of the tax burden for a household of middle class with two children, according to a tax expert of renown.
The economic update presented on Tuesday by the minister of Finance plans to include $ 100 per child for school supplies and a reduction in the first tax bracket from 16% to 15 %.
By adding the higher of the basic amount announced in the spring of 2017, and the cancellation of the health tax, the decrease of the burden for a household earning 50 000 $ with two children totals $ 689 $, according to the expert, tax expert Luc Godbout. For a household with income of $ 90,000, the economy jumps to 1266 $.
“This is not nothing. We can not deny it. This is significant, ” said Mr. Godbout, a professor at the University of Sherbrooke who has been president of the examination Commission on the québec taxation 2014 to 2015.
That said, the minister of Finance, Carlos Leitão, announced in December 2014 an increase of the tax on automobile insurance, increased from 5% to 9 %. For an annual premium of $ 500, for example, this has caused the fee of $ 25 to $ 45. Not to mention the modulation of the child care expenses.
So for a couple with a child in school and another in daycare (and whose total income is $ 90 000), the tax burden has decreased from 622 $ since 2015. A household winner of $ 120,000, for its part, pays out 321 $ more, which rises to 1291 $ for a household of $150,000.
Of billion since 2015
According to the government Couillard, the reduction of the tax burden on Québec totalled $ 2.3 billion since the presentation of the economic plan for 2015.
This is the first time since 1988 that the first income tax bracket is 15 %, says Mr. Godbout, who sees it as a positive gesture. In 2015, the Board of review on the tax system had recommended a general reduction of the personal income tax because of the important place it occupies in proportion to the GDP. This review, with a schedule ” more progressive “, would have resulted in a decline of $ 4.4 billion. She offered in return to increase the Quebec sales tax of 9.975 % to 11 %.
The tax represents a significant part of the income of the State. According to the budget 2017-2018, presented in march, individual taxpayers were required to send to Quebec $ 30.6 billion this year, compared to 19.7 billion in consumption taxes and 7.2 billion for the corporate income tax.
The government Couillard had hinted this summer that there would be no tax cuts in the short-term. The minister Leitão had mentioned the idea to pay the excess amount of 2016-2017 ($2.5 billion) to the stabilization fund for unforeseen expenditure. “We will have $ 4.7 billion in this reserve,” he said, according to The canadian Press. “If there are accidents, we will not need to change our financial framework. “
In its document published on Tuesday, Québec has indicated it will instead draw $ 250 million in that reserve in 2017-2018 and $ 1.4 billion in 2018-2019.
In addition, the government Couillard cited Tuesday “simulations” according to which the decrease in the tax burden, which is estimated at $ 1.1 billion, ” would result in an increase in GDP of approximately $ 1.5 billion in the long term, under the effect of the increase in the disposable income of households “.
The ministry of Finance believes that the consumption will increase by 1.3 billion and that business investment will increase from 460 million to meet the general demand. “This increased economic activity will create 14 485 jobs in Quebec “, can we read.