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Victoria, British Columbia, Canada (AHN) – British Columbia Premier Gordon Campbell announced Wednesday that residents of the province would get a 15 percent cut on their income tax rate beginning in January. The reduction applies to all income earned, with a cap of $72,000.

Campbell’s announcement is seen by observers as a last ditch effort to save his political career. His voter support plummeted following the collection of a harmonized sales tax in July.

The premier said that with the reduced rates, BC residents earning $50,000 annually would save $348 on taxes and those with income of $72,293 or more would enjoy the maximum savings of $616.

Campbell said with the tax reduction scheme, BC residents would have more money in their pockets that they could use to provide what they deem as best for their families. He expects the measure to boost the province’s economy.

The tax rate cut would cost BC coffers $568 million on the first year of implementation and would go up to $638 million yearly by 2013-14. Finance Minister Colin Hansen said the lost revenue would be made up by $2.1 billion extra income BC expects to earn in the next three years.

This is the second time that income tax rates were reduced under Campbell’s administration. The first was a 25 percent cut in 2001 when he assumed office as premier.

Campbell said that the imposition of the HST in July shook the BC residents’ confidence to spend, which he hopes to restore through the income tax rate cut.

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