The Pauline Marois government announced the intention to introduce two new tax brackets for incomes over $ 130,000. If the changes to the law are adopted, the new marginal tax rate on taxable income above $ 130,000 will be 28% (compared to 24% currently). Taxable income above $ 250,000 would be taxed at 31% (again compared to 24%).
This increase would be effective from January 2012; the Act would be applied retroactively. Although it is possible to adopt a retroactive tax, this type of measure is uncommon. It is a tradition to give taxpayers a chance to predict the issues and to ensure stability. The current context of minority government could prevent the adoption of these amendments. Unlike some recent measures adopted by decree (eg the abolition of the health tax), this time a vote is necessary so that the measure becomes law.
Most opposition parties supported the cancellation of the health contribution because this measure taxed taxpayers regardless of their income once over a certain threshold. This regressive health tax, which originally cost $ 25 per person, would have quickly reached $ 200 per person in 2012 if it had not been abolished.
Impact on your particular situation
To determine the impact of these changes on your particular situation, do not hesitate to contact us. The use of RRSPs, among others, becomes more effective because a higher rate of tax saving. Differences in tax rates will also have implications for income splitting, investment choices, etc…