The provincial budget brought down last Thursday has introduced a new health care contribution levy which will sharply affect the personal taxes of high wage earners.
The levy, to be brought into effect in July, will be charged on a sliding scale to those who make more than $50,000 annually.
Individuals who make more than $100,000 are looking at a tax increase of 0.5 per cent for each year for three years.
An additional 0.5 per cent tax rate will be added to the personal taxes of those who earn more than $250,000.
This method of putting more money into the province’s coffers could realize $396 million this year and $530 million in 2016.
The increased taxes high wage earners will be nailed with are expected to bring in $330 million next year.
As well as the hike in personal income tax, liquor, tobacco and fuel taxes will go up.
In a press release Premier Jim Prentice says the 2015 budget reflects a balanced approach that will see the province return to surpluses within three years.
“The budget is the first step in a long-term strategy. This is the kind of planning and stability Albertans want for the long-term with immediate action to get us on the right path immediately.”
However, Rimbey Mayor Rick Pankiw is somewhat skeptical about the budget and the changes regarding the levy and the tax increases.
He is not sure how the town will fare, but finds it frustrating that the bulk of the money for capital projects is going to the larger centres.
“The budget will affect all Albertans, that is for sure. And there will be a lot less disposable income around.”
On the flip side, a new refundable tax credit called the Alberta Working Family Supplement is good news for families earning between $2,760 and $41,220 annually.
Families with one child may receive a maximum annual benefit of $1,100 depending on income. Additional annual benefits will be provided for each of the next three children in a family with the maximum benefit to be capped at $2,750.
The tax credit does little to compensate for a budget that is tough on taxpayers and easy on PC waste, said Wildrose Party, interim leader Heather Forsyth in a press release.
“Mr. Prentice is making Alberta families pay the price for the PC party’s waste and mismanagement through the largest tax increase and deficit in Alberta history,” she said. “
With a $7.7 billion deficit, Forsyth warns of the introduction of a provincial sales tax and even more damaging taxes after the election.