A revenue-neutral carbon tax will allow British Columbia to reduce taxes for individuals, families and businesses. Added to the government’s tax reductions since 2001, the changes in Balanced Budget 2008 will give British Columbians, by 2009, the lowest personal taxes in Canada on incomes up to $111,000.
That will make a real difference. For example, a family of four with two parents working earning $70,000 will save more than $2,000 in income tax compared to 2001. A young person working part-time and earning $20,000 a year will see a 75% reduction compared to 2001. And a senior couple with a combined income of $30,000 will now pay no provincial income tax at all.
Starting July 1, 2008, British Columbians will benefit from the following tax reductions, funded entirely by the new BC carbon tax:
- The bottom two personal income tax rates will be reduced for all British Columbians resulting in a tax cut of 2 per cent in 2008, rising to 5 per cent in 2009 on the first $70,000 in earnings – with further reductions expected in 2010;
- The general corporate income tax rate will be reduced to 11 per cent from 12 per cent – with further reductions planned to 10 per cent by 2011;
- The small business tax rate will be reduced to 3.5 per cent from 4.5 per cent – with further reductions planned to 2.5 per cent by 2011; and
- The new Climate Action Credit will provide lower-income British Columbians a payment of $100 per adult and $30 per child per year – increasing by 5 per cent in 2009 and possibly more in future years.