Eighty-six percent of middle-class families face higher income taxes under a liberal government: Report

The majority of middle-income households are paying higher personal income tax due to tax reforms by the Liberal Party government. New research Discovered by Fraser Institute.

In this study, which focused on couples or single parents with children under the age of 18, 86% of families with a total income of $ 84,625 to $ 118,007, defined by the author as middle-income households, paid an average of $ 800 more. I found out that there is.

“For a subset of middle-income households consisting of couples with children, a larger percentage (89%) pay a higher income tax ($ 902 on average),” the study said.

The authors argued, contrary to what the Liberal Party originally declared. 2016 budget “Government has reduced taxes on middle-class Canadians everywhere.” — The “reality” of changes made to income taxes is more “complex” than it looks.

He is a senior economist at the Fraser Institute, and in his research, Media release..

According to a study, liberals have reduced the second lowest federal personal income tax rate from 22% to 20.5% since taking office in October 2015, but there are more tax credits than offsetting the savings from the tax reduction. It was abolished.

One of these tax credits, the elimination of which caused most of the overall increase in income tax, is the income split, the so-called “”Family tax cutIntroduced by the conservatives 2014 This allowed couples with children under the age of 18 to split a portion of their income to reduce taxes and save up to $ 2,000 annually.

The rest includes children’s fitness tax credits, children’s art tax credits, education tax credits, textbook tax credits, and public transportation tax credits.

However, according to the author, the study excluded many other reforms, such as a payroll tax hike to fund the expansion of the Canadian pension system.

The $ 800 breakdown shows that the tax cut resulted in a $ 243 reduction, but the elimination of the income split increased the average income tax by $ 989. The removal of other tax credits added an additional $ 81, but the amount was reduced by $ 27 due to the “indirect effect” of Quebec’s reduction being the main driving force.

According to Fas, the federal tax cut claims focus on middle-class families, but many details are not clearly explained to them.

“By facilitating one income tax change and downplaying another, Ottawa is imposing a high personal income tax bill on the majority of middle-class families. Overall of their tax changes. I draw an incomplete picture of the influence, “he said.

This study compared federal personal income taxes for families with children in 2015 and 2019. It uses Statistics Canada’s modeling tools, which include information on more than 1 million Canadians in more than 300,000 households and about 600 variables for each individual.

The reason 2019 was chosen as the year of comparison instead of 2020 is due to the COVID-19 pandemic.

“Simply put, the impact of the 2020 COVID and the government’s response to it will bring about many anomalies that make it very difficult to interpret the comparison using 2020,” the author said.

“In addition, sufficient data for 2021 are not yet available, and some anomalies remain from the ongoing response to COVID.”

Isaac Theo


Isaac Teo is a Toronto-based Epoch Times reporter.