Western Standard - May 13, 2024


Federal Budget Sparks Debate on Household Taxation

Mentioned
Peter
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Episode Stats


Length

3 minutes

Words per minute

151.86

Word count

575

Sentence count

38


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

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

Transcript generated with Whisper (turbo).
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 It seems even more ironic given the amount of play that the federal liberals gave to
00:00:05.300 the issue of fairness in their recent budget.
00:00:08.500 The title was Fairness for Every Generation, and the first page is all about how the tax
00:00:13.960 system has to be fair.
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
00:00:26.180 tax system, it would be people with the same income pay the same taxes.
00:00:31.220 But as you mentioned in your intro, that's certainly not the case in Canada.
00:00:36.700 Canadian taxes are levied on an individual basis, and we can talk about this later, but
00:00:41.820 other countries do it on a family basis.
00:00:44.280 But in Canada, you pay taxes basically as if you were an unattached individual.
00:00:50.660 You work out what your taxes are.
00:00:52.980 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
00:01:06.000 same amount.
00:01:07.780 For the story, I had a tax software firm run some numbers, a few scenarios for us to give
00:01:14.660 the story some gravitas.
00:01:16.300 And so, one case, if you had a one earner with $100,000 a year versus a couple in which
00:01:24.400 both earners earned $50,000 a year, obviously, both households have the same financial resources.
00:01:30.900 The one income family will be paying about $5,600 more in taxes a year than the other family.
00:01:39.180 You said $5,600.
00:01:41.400 Did you, Peter?
00:01:41.900 Yes, that doesn't include CPP and EI.
00:01:45.340 Those are premiums that we're just looking at the taxes.
00:01:48.100 It's a $5,000, almost a $5,600 difference.
00:01:51.260 Now, you go up, the gap gets even larger.
00:01:54.280 In another scenario, $120,000 a year salary.
00:01:58.220 You know, one family with two $60,000 earners and the other with $120,000.
00:02:03.240 The gap is $7,300.
00:02:07.680 And keep in mind, it's not necessary for this gap that one earner earned nothing.
00:02:14.480 All the discrepancy is created by having one earner in a higher tax bracket than the other.
00:02:20.220 So, you could have a family in which one earner earned a little bit and the other earned a lot,
00:02:26.160 and you would still get a discrepancy, perhaps not as large as the two examples I've given you.
00:02:31.220 But by preventing families from filing their taxes jointly,
00:02:35.500 you create this inequity whenever you have unequal income between the two partners and the couple.
00:02:42.940 So, Peter, I mean, $120,000 a year.
00:02:47.840 A lot of people would say, cry me a river.
00:02:50.240 You know, I don't learn anything like that.
00:02:52.860 That's a rich man's problem.
00:02:54.500 Why should I care?
00:02:56.280 How many people are affected by this?
00:02:58.400 Well, according to StatsCan, there are 2.2 million single earner couples in the country.
00:03:06.120 So, they are, whatever their earnings, they're probably going to be paying more taxes
00:03:12.700 than if they were able to file jointly where one member in the couple is not earning anything.
00:03:18.620 Of dual, there are more than 5 million dual income couples, households in the country.
00:03:26.440 What we don't know is how many of those have a dramatically unequal share of the income,
00:03:32.560 such that there's some sort of tax penalty going to be activated.
00:03:36.240 So, we're talking millions of families.
00:03:38.620 This is not, as you said, a rich man's problem.
00:03:42.080 This is affecting regular, everyday Canadian households right across the country.