Newsrelease

October 14, 1999
Edmonton, Alberta

"Our government promised we'd make tax cuts as soon as we can afford them. Tonight, we're going a long way to fulfilling that promise."

Alberta's middle-income earners kick off the new millennium with a tax break

Middle-income earners in Alberta will be celebrating the New Year with more money in their pockets.

Speaking in Red Deer Thursday night, Premier Ralph Klein announced that the surtax - originally levied as a deficit elimination tax - will be scrapped on January 1, 2000, 18 months ahead of the original schedule. The eight per cent surtax was introduced in 1987 on incomes of $44,000 and more.

With the surtax gone, Albertans from many walks of life will benefit. For instance, a family of four headed by two Calgary teachers each earning $60,000 will save $140 per year. Eliminating the surtax comes in addition to the cut given to all Albertans when the tax rate was reduced from 45.5 per cent to 44 per cent last year. And lower-income Albertans were given tax cuts of up to $1,000 per year through the Alberta Family Employment Tax Credit.

"Albertans have told us that they want tax relief sooner than later," said Klein. "I'm pleased to announce tonight that the surtax will be gone in just two and a half months."

The cut is the latest move in a new tax plan unveiled in Budget '99, which will save Albertans $600 million when it's fully implemented on January 1, 2001. At that time, Alberta will move to a single rate tax on income of 11 per cent, personal and spousal exemptions will be raised by 60 and 90 per cent respectively, and more than 78,000 lower income earners will no longer pay any provincial income tax at all. The accumulated effect of the entire plan is a tax reduction of about 15 per cent on average.

"Tonight's announcement is important as it helps make good on our government's commitment to eliminate deficit reduction taxes as soon as possible," said Provincial Treasurer Stockwell Day. "Albertans have made their feelings clear to us, the deficit is gone, so the taxes brought in to pay off the deficit should be gone, too. Tonight we've taken a major step in doing that."

For further information, please contact:

Fay Orr
Communications Director,
Office of the Premier
(780) 427-2251

or

Tim Seefeldt
Alberta Treasury Communications
(780) 422-4591 or (780) 906-0171

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