Apr 1, 2011

Ten years of tax cuts: a household’s perspective


I did my taxes yesterday and once again was surprised to see how low my family’s income taxes have gone. In 2010, my wife and I paid a combined 13.7% of our income in federal and provincial income tax. Canadian modesty does not permit me to disclose the exact amount of income, but it was under six figures, and about in the eighth decile for household income. With that income I consider us fabulously well-off but we make a lot less than most two-earner professional families, and less than many single-earner professionals (we call it the NGO discount at the office).

I figure 13.7% is a pretty good deal, given what we get back in services and the privilege of living in a great part of the world. Yes, there are other taxes too, but add ’em all up and it is still a good deal. Anyone who believes the Fraser Institute line that we pay half our income in taxes really ought to do this math themselves, and they see that they do not come close.

Because I’m geeky like that, I keep a spreadsheet of our income and taxes going back more than a decade. Looking at it makes for some very interesting comparisons, due to the growing federal and provincial tax cuts since 2001. In 1999 and 2000, we made less money so it is not a total apples-to-apples comparison, but our 2010 income at the average 99/00 tax rate equals more than $7,600 a year in income tax cuts.

That’s a huge amount of money, and I’d happily pay more in income taxes if it meant we had a national early learning and child care program, and a concerted anti-poverty plan. We could easily have a Canada without poverty, a Canada that acted on climate change, a Canada that provided better opportunities for children and youth. But we choose not to have those things.

As for this election, income splitting would only sweeten the pot for us, as I made much more than my spouse. We’d get back another couple thousand dollars in tax cuts that we did not ask for. Which typifies the past decade: people like me have benefited from tax cuts (and don’t even get me started on the massive gains accruing to the truly rich and super-rich), but those who need help have been given the shaft.