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|
|Total Net Income||236||$50,000|
|Total Taxable Income||260||$50,000|
|Net Federal Tax||420||$7,201|
|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.