Federal Budget Sparks Debate on Household Taxation
Episode Stats
Words per Minute
151.86195
Summary
In the first episode of the new year, we take a look at the impact of Canada's income tax system on the lives of millions of people across the country. In this episode, we talk about the inequity created by the tax system in Canada, and why it is unfair.
Transcript
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It seems even more ironic given the amount of play that the federal liberals gave to
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The title was Fairness for Every Generation, and the first page is all about how the tax
00:00:14.960
It's the liberals' notion of fair as taxing the rich more.
00:00:21.360
But I think most people instinctively, if you talked about what would be a fair income
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tax system, it would be people with the same income pay the same taxes.
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But as you mentioned in your intro, that's certainly not the case in Canada.
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Canadian taxes are levied on an individual basis, and we can talk about this later, but
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But in Canada, you pay taxes basically as if you were an unattached individual.
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So, as you said, a situation in which you have two families, one in which one earner earns
00:01:00.860
all the income, and the other stays at home, and the other in which both earners earn the
00:01:07.780
For the story, I had a tax software firm run some numbers, a few scenarios for us to give
00:01:16.300
And so, one case, if you had a one earner with $100,000 a year versus a couple in which
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both earners earned $50,000 a year, obviously, both households have the same financial resources.
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The one income family will be paying about $5,600 more in taxes a year than the other family.
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Those are premiums that we're just looking at the taxes.
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You know, one family with two $60,000 earners and the other with $120,000.
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And keep in mind, it's not necessary for this gap that one earner earned nothing.
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All the discrepancy is created by having one earner in a higher tax bracket than the other.
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So, you could have a family in which one earner earned a little bit and the other earned a lot,
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and you would still get a discrepancy, perhaps not as large as the two examples I've given you.
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But by preventing families from filing their taxes jointly,
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you create this inequity whenever you have unequal income between the two partners and the couple.
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Well, according to StatsCan, there are 2.2 million single earner couples in the country.
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So, they are, whatever their earnings, they're probably going to be paying more taxes
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than if they were able to file jointly where one member in the couple is not earning anything.
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Of dual, there are more than 5 million dual income couples, households in the country.
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What we don't know is how many of those have a dramatically unequal share of the income,
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such that there's some sort of tax penalty going to be activated.
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This is not, as you said, a rich man's problem.
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This is affecting regular, everyday Canadian households right across the country.