vincial’ income taxes across

Canada but they caused almost |

po stir.

Except in Mapitoba and Sas- |

katchewan, taxpayers ex no difference. Bui

there is a difference: Part of

te oe Or

vincial coff

, The great_majority of taxpay- ers won't have to do anything different until around April, 1963, when—except in Quebec— they'll file a joint 1962 tax re

a * ical | The laws define the * , ah amount the tax as) under federai; provinces get. a federal ” ~{law, and their corporation taxes | change in corporation intome Tare based om taxable income ot |tax rates won't affect the pro- companies as determined by: vincial incomes since their cot federal law. porate tax rate is specified m ncome ax n New ys fem se pera wns [ree Oa ables ec |}=PAYMENTS into account | tom agency. Officials say it wi!') ‘The greatest burden of com. | eaves from ) LAX ININGW OYSTOM east re both in Parliament and) This has the tax - ren Meee One of the main accusations suggested by Ottawa coverims|peals in the courts against the provincial legislatures, wasn't | equalization estate taxes. The federal gov-|has been that it will mean “aj the five years to 1966 and. tak | amount of provincial taxes. phe ye age cage igo PA eg oes ernment will continue to pay return to the tax jungles of the| ing advantage of the progre|. One criticism of the decision | but at snother aspect of fed- | floor half of its collections of estate | 1930s." In 1939, all provinces | sive inerease im the feder® |, out the provinces back into |eral - provincial financial ar | the neces taxes to provinces that don’t had their own corporation to | withdrawal from personal | 1,2’ income tax field has been |rangements — equalization pay | been more than offset by an in- levy a succession duty, and this|come taxes and seven levied | come taxes that it will limit the federa} | ments. crease to $35,000,000 from $25.- includes all but Ontarie and| personal income tax. But each| Nova Scotia ts on exceptics government's power to in| These payments are made by | 000.000 in the annual Atlantic Quebec. collected its own, and there was Its law applies only to 1963, but nuence the economy by cas | Ottawa to less wealthy proy- | provinces grants The new tax deal has brougm | 2° fisetting reduction in fed | legislation next session 18 ¢* | changes - inces. Formerly they were de | Which they Pe he criticism and eral taxes. pected to be uniform with the; The way the new system w signed to assure that the per-| Last July 11, Fi Mims. of it vehement — 3 any capita tax yield im eight prov: 'ter Fleming issued “a report

Ottawa_and their |

-turn—fer—both-

provincial government. A sim- “ple; brief calculation at the bot- tom of the tax return, allocat-

ing part of the tax to the:)|’

province, will be the only ehange. A provincial income tax on

individuals is -nothing new in Quebec, which has had one

since 1954. Quebec continues to)

collect its own tax.

The other nine provinces en- tered the income tax oars some of them reluctantly — cause of the new federal- ae .¢ial fiscal arrangement. This

ended the tax-rental system_un |

der which for years Ottawa levied. the. entire income tax .and then gave the provinces a share. TWO TAKE MORE - The new arrangement left it -%to the provinces to “decide w to boost their share of and a Cross*fanada Sur- vey by The Canadian Press shows that only Saskatchewan and Manitoba took the step.

The smoothness of the transt- ‘ton is due to a key provision fm the new tax deal—Ottawa's 6ffer to act as a central collec- | tion agent. Collection agree “ments with the nine provinces | give the. federal government the legal basis for collecting the provincial taxes.

Under the old tax - rental agreements provinces got 13 per cent of the federal personal

- fncome tax collectéd within | their borders.

The new tax deal Scan a bigger slice—16 per cent—and this share will rise by one per- centage point annually to 2 per cent in 1966.

It works this way: Over-all rates of tax on personal income aren't changed. But if a man aren’t changed. But if a man

owes for example, $500 in tax | he will reduce this by 16 per | cent, or $80, on his 1962 tax re- |

turn, and the 16 per cent goe» to the provincial treasury. By 1966, the rediicti be 26" per cent, or $100.

MEDICAL PLAN MONEY

One of ‘the federal govern ment’s biggest complaints about the old tax-rental system was that the provinces kept asking} for larger payments from Ot-

law@awa, leaving the central gov- ernment with the disagreeable task of increasing its taxes to meet their demands.

“Manitoba wanted more money | to reduce hospital! insur- ance premiums. Saskatchewan —needed_funds. finanee its medical care insurance plan.

Both provinces decided to ~take an extra six-per-cent share of personal income taxes.

This means that for 1962 they

. will take 22 per cent of the in- come tax liability of each indi- vidual, rising to 26 per cent by

- 1966. Since this is more than. the federal abatement, income taxes will be higher in those two provinces than elsewhere. .

A Manitoba or. Saskatchewan | resident with a $500 tax liability | this year will get an_$80 reduc- tion from Ottawa but will pay | $110 to his provincial govern- ment.

Quebec’s personal income tax is approximately 16 pes cent af the total levied in the province,

It isn’t known what the prov- |

ince will do about the future federal withdrawal to 20 pev cent. But it’s expected. the Que- bee government wilAfake what ever additional revenue it can get. without danger of double taxation. GUIDES MAILED Ottawa has sent out personal income tax deduction guides to employers who withhold the tax from’ pay cheques, There are three forms — one for Quebec _where Ottawa doesn’t collect ‘the provincial tax, one for Man- | itoba and Saskatchewan at the higher rates, and one for the fest of the country. The new tax deal also re- quires the provinces~to levy “their own corporation income with Ottawa

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