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Government hates single income families (Part 3)

The numbers here are from more than 10 years ago, however they still illustrate how a family income and single income models skew how much income tax single income families pay.

OK, so we now know how much a single income family has to pay in taxes approximately (28% of there income and that is before you think about GST, PST, Property Taxes, and living expenses), pretty gross huh?

Now let us look at a family with 2 income earners both making $50,000 a year (which adds up to the exact same amount as our single income earner). Same assumptions about CPP, EI, etc.,

So let’s look at the table NOW for Spouse #1:

Tax Line Description Line # Amount
Employment Income 101 $50,000
Total Net Income 236 $50,000
Total Taxable Income 260 $50,000
Net Federal Tax 420 $7,201
Provincial Tax 428 $3,196
Total Tax Payable 485 $10,397

So, thanks to our tax system, Spouse #2’s income tax looks the same so the total tax payable for this couple would be: $10,397 * 2 = $20,794.00

Interesting eh? So, let’s compare with our single income family which pays : $28218.62

A difference of: $7424.00 (approximately)

Tomorrow, my commentary on this, and a possible solution, which I will borrow from our U.S. cousins.

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