Personal Taxes

Fraser Institute: 86% of middle-class households face a better federal personal revenue tax burden

VANCOUVER – Economy – Jake Fuss, senior economist at the Fraser Institute, says: “By promoting an income tax change and downplaying others, Ottawa paints an incomplete picture of the overall impact of its tax changes, which have imposed higher personal income tax bills on the vast majority of middle-class families.”

In a media statement, the Fraser Institute says that “contrary to rhetoric from Ottawa, the vast majority of middle-class Canadian families are paying higher federal personal income taxes due to federal tax changes.”

“The federal government has repeatedly claimed that it has lowered personal income taxes for the middle class, when in fact it has increased the personal income tax burden for most middle-class families,” said Jake Fuss, senior economist at the Fraser Institute and co-author of Measuring the impact of federal income tax changes on Canadian middle-income families since 2015.

In 2015, the government cut the second-lowest personal income tax rate (from 22 percent to 20.5 percent) — but also eliminated income splitting for couples with young children and eliminated a slew of tax credits that more than offset the savings from the tax rate reduction.

As a result of the study, the study finds that 86 percent of middle-class families experienced an increase in their federal income tax burden — $800 per year (on average).

The study compared federal income taxes for families with children in 2015 to 2019 using a Statistics Canada tax and transfer model that includes information for more than 1 million Canadians in over 300,000 households with approximately 600 variables for each person.

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