Income is taxed according to a bracket-based system: lower slices are less taxed, while higher ones are more strongly taxed. The more levels there are, the more equitable is the tax burden distribution.
There are currently only 4 tax brackets in Quebec. Therefore, a 1 million dollar income is taxed at the same rate as a $101,000 one. In the 1980s, there were 16. By returning to 10 tax brackets, the government would gain about 1 billion dollars annually in additional income to invest in public services.
On top of that, for 87% of taxpayers, particularly the poor and the middle class, this would actually mean paying lower taxes. And for the richest 13%, this would mean an increase of only 1.5%.
In Quebec, corporations and financial institutions used to pay a tax on capital, that is, a tax on accumulated funds that are intended to generate more profit. Furthermore, this tax is essential in order to bring banks, who are largely spared from traditional taxes due to their high number of transactions, to contribute to the public purse.
The capital tax, which stood at 0.6%, was progressively abolished by the liberal government between 2006 and 2011. By restoring it to merely 0.5%, we estimate additional income at about 600 million dollars, which can be invested in public services.
There are dozens of other alternatives the government can implement to balance its budget, rather than cutting and charging for public services. To prove it, the Coalition against user fees and privatization of public services drew a graph of the different alternative fiscal proposals that amount to over 10 billion dollars in additional revenue.
|Introduce 10 tax brackets||1 000 M$||Abolish the tax credit for personal capital gains||556 M$|
|Decrease the RRSP limit||300 M$||Reduce the dividend tax credit||157 M$|
|Adjust consumption taxes to the type of good or service purchased||745 M$||Increase the corporate tax rate to 15%||1 220 M$|
|Reintroduce the capital tax on financial institutions||600 M$||Combat tax evasion and tax avoidance||500 M$|
|Combat corrupt practices in the attribution of government contracts||600 M$||Adopt cost-limiting measures for medication||1 000 M$|
|View the full table...|
Austerity is not inevitable: it's an ideological decision. By opting for a fair budget, that brings the rich and corporations to pay their fait share, it is perfectly possible to finance quality public services.