Reduced Tax Rate for Some Won’t Help The Middle Class Says Report
Prince George, B.C.- A new report for the Fraser Institute suggests the Federal Liberals promise of making life easier for the middle class is having the opposite effect.
Authors of the report, Charles Lamman, Ben Eisen and Milagros Palacios suggest that while the Liberals did reduce the tax rate for the lowest income bracket, other changes will “more than wipe out any benefits”.
They point to the changes to the Canada Pension plan, noting that while some will get the benefit of the deduction for that payment on their personal income tax, as the Pension Plan expands, the rate of contribution will grow from the current 9.9% to 11.0% for those earning up to $72,500 a year. The authors say that even if a person claims the CPP amount as a deduction, they will still end up paying more in personal taxes.
The report adds that there are other issues which will, ultimately, leave less money in the pockets of Canadians ” The elimination of income splitting for couples with children, the cancellation of several widely used tax credits, and the reduction in annual TFSA contribution limits will potentially increase the tax burden for middle-income Canadians.”
Comments
Sunny ways!. What change? It’s 2016?
So when someone receives CPP benefits, does the Fraser Institute classify those as a tax refund?
No they don’t NMG but if your income along with CPP benefits exceeds roughly $70,000.00 per year they do claw back money from your old age pension.
More garbage from the “mouthpiece for the rich”.
The Fraser Institute’s projections are usually worst case scenarios. Some changes are eliminations of promises made by the now official opposition during the last election campaign. In other words there are politics at work here.
The tiny increase in CPP is dwarfed by the hidden taxes we have to pay through BC Hydro and ICBC. Then tack on the Carbon Tax…and some nice incremental increases in property and environmental taxes and anything the feds do is kind of moot.
But, but Trudeau said he loves the middle class, he wouldn’t lie to us would he??
but, but, but, isn’t Justin a class “act”!
Seems like the only thing he takes serious is his Drama Teacher “acting” lessons, haha!
Is there a definition of “middle class” that everyone (left, centre and right) can agree with? If not, much of this debate, and much of what the Fraser Institute publishes, is meaningless.
Likely a number of different ways to define ‘middle class’, but using the figures given in the article, it would certainly include anyone making between wherever the “lowest income bracket” ends and up to
$ 72,500 a year. Doubtless there are many who earn more than that who would still see themselves as being ‘middle class’, and there are some who are in the “lowest income bracket” who see themselves being ‘middle class’, too.
The real issue is that the changes made by the Liberals will “…leave less money in the pockets of Canadians.” And drive them further into debt as they try to buy today what they made yesterday but can’t pay for til tomorrow. Who benefits? Only those who make a business of dealing in debts.
But my Bank shares are doing just fine. And you know what! I didn’t even vote Liberal!
There ain’t no justice is there – just a justin.
Your bank shares may well be doing ‘just fine’, but the banks as ‘businesses’ (as opposed to banks as ‘banks’), have the same problem every other business has.
Their profits, taken not as a dollar amount, but as a PERCENTAGE of their overall ‘sales’ are continually declining.
They’ve tried to arrest this decline by dinging their customers with ever escalating fees for most of the services they once provided without charge, as well as cutting the interest rates paid on savings accounts to next to nothing.
And they have all tried to get bigger, to get into fields like insurance, and investment dealing, and acting as trust companies, things they once left to others.
Now back when banks DID provide most of the services free they now charge us for, the business of banking involved a lot of people. Today, one touch of a keyboard will do what it used to take a multitude of hands to accomplish, and that technology would never have been put in place if the banks thought there was no saving in having it. There was.
The legions of bank clerks doing cheque clearings and postings and all the other bookkeeping involved in banking are no more. They can do way more business way faster, and at far less cost. But have their profits gone up proportionate to the increased business banks are now doing? They have not.
Fraser institute assumes we all are able to use these specialty tax avoidance schemes and in that hypothetical scenario eliminating the specialty tax avoidance loop holes is a tax increase. For the average tax payer a small income tax decrease is off set by the cpp increase.
I like what David Cameron did in the UK. He eliminated 4 million of the lowest income tax payers from paying income tax. Says they shouldn’t have to pay income tax when they earn less than the poverty level.
The Fraser institute is a joke.. Political parties donate millions..the head of the institute made 6.6 million last year..
Somethings stinks.. Can’t be seen as unbiased..as soon as they take a “donation” from any political party.
How is the Canadian Centre for Policy Alternatives funded? Who foots the bill to keep Integrity BC alive? No “donations” from any political parties? They’re all biased, PVal. They all hire economists, not to discover new facts about the way the economy actually works, but to provide the data their employers need to try to back up their particular perceptions of how it should work.
Comments for this article are closed.