Tax Cuts Funded by the Carbon Tax

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 per cent reduction compared to 2001. And a senior couple with a combined income of $30,000 will now pay no provincial income tax at all.

The tax cuts funded by the carbon tax add to all the other personal income the tax reductions since 2001. Most British Columbians will now benefit from reductions of over 37 per cent, 250,000 British Columbians now pay no provincial income tax and others have seen reductions of more than 70 per cent.

And Starting July 1, 2008, British Columbians will benefit from the following tax reductions, funded entirely by the new revenue-neutral carbon tax:

Tax Reductions Funded by the Carbon Tax
($millions)
2008/09
2009/10
2010/11
Total
Carbon tax revenue (amount to be returned to taxpayers)

(338)
(631)
(880)
(1849)
Personal Tax Cuts    
– Low income refundable tax credit *
104
145
146
395
– Reduce bottom two tax bracket rates by 2 per cent for 2008 and by 5 per cent for 2009 and subsequent years *
113
230
244
573
– Additional personal income tax rate cuts
-
40
157
197
Total tax cuts for individuals
217
415
547
1179
Business Tax Cuts    
– Reduce general corporate rate to 11 per cent July 1, 2008 *
75
128
133
336
– Reduce general corporate rate to 10.5 per cent January 1, 2010 and to 10 per cent January 1, 2011
-
6
73
79
– Reduce small business corporate income tax rate to 3.5 per cent July 1, 2008 *
46
79
82
207
– Reduce small business corporate income tax rate to 3 per cent January 1, 2010 and to 2.5 per cent January 1, 2011
-
3
45
48
Total tax cuts for businesses
121
216
333
670
Total tax cuts
338
631
880
1849

* Legislation introduced with Budget 2008.