OTTAWA – The Liberal government’s centrepiece election promise to raise taxes on the biggest income earners while cutting the rate in a lower bracket has passed the House of Commons.
MPs voted 230-95 today in favour of a motion featuring a collection of tax changes that will siphon about $1.2 billion annually from the treasury over the next five years.
The Liberals had estimated the combined fiscal impacts of the tax-rate hike and reduction would basically offset each other.
Starting Jan. 1, the income-tax rate will drop to 20.5 per cent, from 22 per cent for taxable earnings between $45,282 and $90,563.
The rate on all income earned beyond $200,000 will rise to 33 per cent, from 29 per cent.
Opponents have said the government’s tax reduction should have been extended to also benefit those who earn less than $45,282.