Broken Promises: The Persistence of Elevated Personal and Corporate Income Taxes in Ontario
— Published on January 5, 2023
- Since 2012, Ontario’s top marginal personal income tax rate (PIT) rate has increased by 7.12 percentage points, from 46.41 to 53.53 percent. As a result, Ontario now has the third highest top combined federal/provincial or federal/ state top income tax rate in Canada or the United States.
- This increase has been the result of both federal and provincial tax increases.
- Despite repeated promises not to increase taxes, Dalton McGuinty’s government (2003- 2013) enacted provincial tax increases that raised the province’s top PIT. Premier McGuinty also promised the increase was temporary and would later be reversed but neither he nor his successor Premier Wynne (2013-2018) made good on this commitment.
- The Ford government criticized its predecessors for maintaining an uncompetitively high PIT rate in Ontario while in opposition, but has also failed to take action to reduce the rate.
- When running for office in 2018, the Ford government promised to reduce Ontario’s general corporate income tax (CIT) rate by one percentage point, but that promise has not been kept.
- High personal and corporate income tax rates reduce economic output over time. As such, the repeated broken promises from different premiers of different political stripes that have contributed to the persistence of high taxes in Ontario have harmed economic growth in the province.
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