EQ Bank Savings Plus Account

Government hates single income families (Part 3)

in Family, Government, Income Tax

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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{ 2 comments }

  • Big Cajun Man April 29, 2005, 1:07 PM

    Those aren’t MY numbers, they are theoretical numbers.

    Reply
  • Ashar Edith April 29, 2005, 5:05 AM

    Are you crazy? Why are you posting youe numbers? That’s not safe…

    Reply

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