The newly-installed finance minister is moving ahead with his government's plans to cut taxes for what it calls "middle-class" workers, while at the same time hiking taxes on the "top 1%."
Bill Morneau spoke to reporters in Ottawa to outline his plans to move on the tax changes coming this week and in next year's budget.
The Liberals campaigned hard on a promise to lower the second income-tax bracket — which in 2016 will cover earnings between $45,282 and $90,563. Right now, the rate for income in that range stands at 22%; the Liberals intend to move it to 20.5%.
For individuals at the top of the income bracket, the tax cut will save them $680 a year starting in 2016.
The forgone revenues from that are expected to be partially offset by a corresponding tax hike on those making more than $200,000 a year.
A new rate of 33% will be charged on income over $200,000 — the previous top bracket of 29% will now only apply on between $140,388 and $200,000 of earnings.
Updated financial figures and forecasts have had an impact on the estimated costing of the measures. The tax cut is now expected to lower government revenue by more than $3.4 billion and the tax hike on the "1%," will bring in $2 billion.
