There is recent speculation that we might be looking at an increase in the HST in P.E.I. Close to 15 years ago a tax was levied on us in a stealth manner. It was one we didn’t see coming, unlike raising the HST. In 2002, the province starting using a separate form from the feds. This was an intentional move and now has resulted in the application of percentages and refundables within the return, instead of actual dollar figures. Today, because of this confusion, very few prepare their own tax return. I wish to address the province, those age 65 and over and, to some extent, lower income earners.
In 2002, the federal combination of the personal exemption and the maximum age exemption was $7,634 + $3,728 = $11,362. Provincially, it was $7,412 + $3,619 = $11,031. The difference was $331. Indexing over the last 13 years by both the federal and provincial governments on these two items has resulted in a federal exemption of $11,138 + $6,916 = $18,054 and a provincial one of $7,708 + $3,764 = $11,472. Indexing = 58.9 per cent federally and a paltry four per cent for the province. The dollar difference today, after indexing for years is $18,054 - $11,472 = $6,582.
If you have income from OAP, CPP and possibly another source and is less than $18,054 (federal total) you won’t pay any federal tax. If that income is more than $11,472, say $13,500, you will have to pay about $200 provincially, in most cases.
Because of the absence of fair indexing, it is my opinion, as one who is aware of the cost of living in P.E.I., that Islanders “n need are paying an unnecessary tax to this province as compared to their level of income.
David C. Campbell,