Family Tax Relief Backgrounder
February 18, 2013
A two-income family of four is now receiving approximately $3,100 per year in tax savings as a result of the Harper Government's actions since 2006.
|1. Goods and Services Tax (GST) rate reduction 2||960|
|2. Personal income tax measures
Increased tax value of non-refundable credits (evaluated at the 15% credit rate)
|Child Tax Credit||657|
|Canada Employment Credit||329|
|Children's Fitness Tax Credit (CFTC)4||150|
|Children’s Arts Tax Credit (CATC)4||150|
|Public Transit Tax Credit (PTTC)4||156|
|Reduction in the lowest personal income tax rate from 16% to 15%||498|
|Increase in the upper limit of the first personal income tax bracket3||139|
|Basic Personal Amount3||66|
|Total personal income tax relief||2,145|
|3. Total tax relief 5||3,105|
1 – It is assumed that one spouse earns $60,000 and the other spouse earns $40,000, for combined family total income of $100,000. They claim deductions (for example, RRSP contributions, child-care expenses) equal to 10% of earnings, so their taxable incomes are $54,000 and $36,000 respectively, for combined family taxable income of $90,000.
2 – Average savings from the two-percentage-point GST rate reduction are estimated for families with total incomes in the range of $100,000.
3 – Tax relief from increases in tax parameters since 2006 above what they would have been in 2012 with indexation only.
4 – Assumes a CFTC claim of $500 for each child, a CATC claim of $500 for each child and a PTTC claim of $1,040 for the family.
5 – This family would receive an annual Universal Child Care Benefit (UCCB) payment of $1,200 (after-tax value of $1,020) for each child under 6, as well as $81 per year in increased Canada Child Tax Benefit (CCTB) payments.
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