QUEBEC — The government has backtracked on its main election promise — elimination of the $200-a-head health tax — for the 2012 tax year.

The measure, which was to have been offset by higher taxes on Quebecers who make more than $130,000 a year, was met by volleys of protest from Quebec's two main opposition parties, the Liberals and Coalition Avenir Québec.

Given that the PQ minority government could be defeated on the issue, triggering a new election, Finance Minister Nicolas Marceau sought a compromise. The changes only come into effect for the 2013 tax year, but Marceau said the government intends to have MNAs vote on his plan in the fall session of the Quebec National Assembly, which begins Oct. 30.

Marceau proposed Wednesday a one-year delay and the reduction — not the ending — of the health tax on incomes below $42,000.

Quebecers who individually earn between $42,000 and $130,000 would pay the same $200-a-head health tax, and the amount would rise on taxable incomes between $130,000 and $150,000 to a $1,000-a-year maximum.

As well, Marceau announced a new top tax bracket of 25.75 per cent, 1.75 per cent higher than the current top rate, on taxable income above $100,000, starting in the 2013 tax year.

The minister had proposed — retroactive to Jan. 1, 2012 — a new 27 per cent tax bracket on incomes over $130,000 and a 31 per cent rate on income over $250,000, as well as an increased tax take on capital gains and dividend income.

The proposal turned Quebec's business leaders, as well as the opposition, against the PQ government. They argued retroactive taxation was unfair and the higher rates would make it hard to attract talented people to the province.

"I was forced to notice that people were surprised, and surprising taxpayers is not a good idea," Marceau admitted.

Marceau's announcement means Quebecers would pay the full $200-a-head health tax when they do their 2012 income tax returns next spring, contrary to what Pauline Marois had proposed, promising "oxygen" in the form of a $400 tax cut for two-income families.

Marceau's new health tax plan and the added tax bracket would be for the 2013 tax year, taking effect when Quebecers file their 2014 tax returns.

Marceau also announced he would not increase taxes on capital gains and dividend income as he planned, apparently sensitive to the argument that a retired person selling a chalet would be unjustly penalized.

At present, about 900,000 Quebecers earning less than $14,410, roughly a minimum-wage salary, do not pay the health tax introduced by former Liberal finance minister Raymond Bachand in his 2010 budget.

"We are offering tax relief to 3.2 million Quebecers," Marceau said.

Under the new PQ proposal, 2.1 million Quebecers earning less that $18,000 would pay no health tax.

Those earning between $18,000 and $20,000 would pay between $1 and $99. And on incomes from $20,000 to $42,000, the amount would be fixed at $100.

Bachand, commenting on the PQ's plan, noted it means Marois is not keeping her election promise to eliminate the health tax, calling it "another episode of improvisation," and pledged the Liberal opposition would vote against it.

He appealed to the opposition parties to "carefully weigh this proposal before the parliamentary debates."

"Do they oppose, yes or no, a reduction in the tax burden for half of Quebec taxpayers?"

Bachand, now a candidate for his party's leadership, said voters told him they voted for the PQ in the last election because Marois promised to end the health tax.

"Today, Quebec voters have been betrayed," Bachand said.

Bachand said the PQ is raising income tax by about $300 million and making Quebec less competitive than Ontario.

"We will vote against the income tax, but that vote might not come until many months," Bachand said.

And he also expressed concern the PQ could try to slap on more new taxes in its spring budget, noting another commitment by Marois to roll back the Liberal plan to increase Hydro-Québec's rates to consumers.

That would take a new law, Bachand said, and the Liberals would vote against that as well.

Marceau's plan would not increase Quebec's total tax take. The treasury would still get $1 billion in 2013, as it would have with the full health tax.

François Legault, leader of the Coalition Avenir Québec, said he finds it curious Marceau considers Quebecers earning $42,000 middle class, saying of the PQ, "the economy was not their best subject," and "Professor Marceau should do his homework again." Marceau is a former Université du Québec à Montréal economics professor.

Legault said instead of increasing income tax Marois should cut public spending, noting the CAQ has put forward proposed spending cuts of $2.1 billion.

kdougherty@montrealgazette.com

Twitter: @doughertykr