Monday, November 19, 2007
Canada's Poor Pay More in Taxes: New Study
The Canadian Centre for Policy Alternatives (CCPA) finds that the top 1 percent of families in 2005 paid a lower total tax rate than the bottom 10 percent of families.
The study, Eroding Tax Fairness: Tax Incidence in Canada, 1990 to 2005, which is the first comprehensive review of tax changes at all levels of government in Canada within the past 15 years, finds the system is delivering larger tax savings for high income families. This reinforces the growing gap in market incomes between high income families and the rest of Canadians.
Provincial tax cuts are the key culprit for the increasingly regressive nature of Canada’s tax system but the problem has been exacerbated at the federal level with billions of dollars worth of post-2000 tax cuts.
These findings are particularly important for women, who are statistically more likely to earn less than men, and more likely to head one-parent households, the one of the lowest household income groups in Canada. See ACTEW’s fact sheet on Women and Contingent Work, released in April.
It also bears mentioning that recent reports estimate 39% of women tax filers in Canada compared to 25% of men had no tax liability, i.e. they do not pay tax because they do not earn enough money (see FAFIA’s 2007 Federal Budget Overview). This means that while 39% of women will not be penalized by the trends CCPA identifies, neither do they benefit from the tax breaks and incentives being introduced by the federal government.
The study, Eroding Tax Fairness: Tax Incidence in Canada, 1990 to 2005, which is the first comprehensive review of tax changes at all levels of government in Canada within the past 15 years, finds the system is delivering larger tax savings for high income families. This reinforces the growing gap in market incomes between high income families and the rest of Canadians.
Provincial tax cuts are the key culprit for the increasingly regressive nature of Canada’s tax system but the problem has been exacerbated at the federal level with billions of dollars worth of post-2000 tax cuts.
These findings are particularly important for women, who are statistically more likely to earn less than men, and more likely to head one-parent households, the one of the lowest household income groups in Canada. See ACTEW’s fact sheet on Women and Contingent Work, released in April.
It also bears mentioning that recent reports estimate 39% of women tax filers in Canada compared to 25% of men had no tax liability, i.e. they do not pay tax because they do not earn enough money (see FAFIA’s 2007 Federal Budget Overview). This means that while 39% of women will not be penalized by the trends CCPA identifies, neither do they benefit from the tax breaks and incentives being introduced by the federal government.
Labels: Issues_and_Trends, Resources_and_Research
