Demystifying the economy | Taxes, once and for all

Every Saturday, one of our journalists answers, in the company of experts, to one of your questions about the economy, finance, markets, etc.

First demystifying economy | taxes, once and foremost, it is important to specify that it is not the age that determines whether one pays tax or not, explains Luc Godbout, holder of the chair in taxation and public finances of the University of Sherbrooke.

“It is based on the income that we do, whatever age,” he says.

Now. For example. to answer the most faithfully to your question, let us observe the tax statistics of individuals of the 2022 taxation year, since they are the most recent made available by the Quebec Ministry of Finance.

Portrait of taxpayers – Demystifying economy | taxes, once

Let us first carry out a portrait of the taxpayers of the province.

Only one in ten Quebec taxpayers was under the age of 25, in 2022, according to data from the ministry. In demystifying economy | taxes, once other words, 767,000 Quebecers in this age group produced a declaration of income that year.

For its part. the group ages 65 and over has one in four taxpayers, which brings the number of income declarations to more than 1.8 million.

But who, in the end, paying taxes?

It is more than half of taxpayers aged 65 and over, more specifically 56.2 %, who earn enough to pay tax on their income. Among the youngest taxpayers who pay tax, this ratio amounts to 39.5 %.

To demystifying economy | taxes, once new simplify, just over 300,000 Quebecers aged 24 and under, in 2022, paid tax. In the older demystifying economy | taxes, once group, there are more than 1 million, three times more.

The latter paid 16.3 % of total tax revenues, compared to 2 % for the youngest.

Distribution of Quebecers according to age

Okay. the group ages 65. under has three times more taxpayers who participated in tax revenue than the group aged 25 and under. But are they three times more numerous?

The answer is no, according to the Institute of Statistics of Quebec.

According to the demographic assessment of the province of 2022, one in five people is aged 65 demystifying economy | taxes, once new and over. About the same number demystifying economy | taxes, once of people are 20 or less, reports the balance sheet.

But this observation could soon change. According to estimates by the Quebec Statistics Institute. the quarter (25 %) of the Quebec population will be 65 and over in 2031, which could accentuate the tax burden.

In fact, tax expenditure devoted to seniors increased from 749 million in 2009, to nearly 1.6 billion in 2020, reports the government of Quebec demystifying economy | taxes, once new in its government action plan Aging demystifying economy | taxes, once and living together. This is an increase of 0.24 % to 0.45 % of GDP.

“The use of tax measures for the support of seniors has therefore been up in the past decade. ” said the Ministry of Health and Social Services.

In 2021. a study carried out by the chair in taxation. public finances of the University of Sherbrooke and the Research Chair on Intergenerational Economic Chain (HEC Montreal/ESG UQAM) calculated that the aging of the population could cause a 10 % drop in income tax revenues, compared to revenue without an aging population.

Read the other articles in the series “demystify the economy”