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.”