Budget 2000 - Five-Year Tax Reduction Plan - 4
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Archived - Examples of Tax Reductions for Typical Individuals and Families by 2004
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Single Parent With One Child and an Income of $30,000: Tax Reduction by 2004
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Tax reduction/ benefits increase |
Federal tax/benefits |
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---|---|---|
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(dollars) |
||
Pre-2000 budget | ||
Tax | 1,882 | |
Canada Child Tax Benefit (CCTB) | 1,415 | |
Goods and services tax (GST) credit | 499 | |
Total net federal tax (tax minus CCTB and GST credit) | -32 | |
Five-Year Tax Reduction Plan |
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Reduction in tax | 274 | |
Increase in CCTB | 663 | |
Increase in GST credit | 49 | |
Total net federal tax reduction | 986 | |
Post-Plan net federal tax (tax minus CCTB and GST credit) |
-1,018 | |
First full-year impact (2001) |
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Reduction in tax | 72 | |
Increase in CCTB | 281 | |
Increase in GST credit | 20 | |
Total net federal tax reduction | 373 | |
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- The information provided above compares the benefits that would be received by a single parent, with one child, earning $30,000 in 2004 with and without the tax reductions provided by the Plan.
- Without taking into account the tax reductions proposed, this individual would have received $32 in total net benefits in 2004.
- By 2004, this single parent will receive $1,018 in total benefits, an increase of $986 in benefits.
- In 2001 alone, this single parent’s net benefits will increase by $373.
Single Individual With an Income of $35,000: Tax Reduction by 2004
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Tax reduction/ benefits increase |
Federal tax/benefits |
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---|---|---|
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(dollars) | ||
Pre-2000 budget | ||
Total net federal tax | 4,875 | |
Five-Year Tax Reduction Plan | ||
Total net federal tax reduction | 635 | |
Total net federal tax reduction (per cent) | 13.0 | |
Post-Plan budget net federal tax | 4,240 | |
First full-year impact (2001) | ||
Total net federal tax reduction | 214 | |
Total net federal tax reduction (per cent) | 4.4 | |
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- The information provided above compares taxes that would be paid by a single individual earning $35,000 in 2004 with and without tax reductions provided by the Plan.
- Without taking into account the tax reductions proposed, this individual would pay $4,875 in net federal personal income tax in 2004.
- By 2004, this individual will pay $4,240 in net federal personal income tax, a reduction of $635 or 13.0 per cent.
- In 2001 alone, this individual’s federal taxes will be reduced by $214.
One-Earner Family of Four and an Income of $40,000: Tax Reduction by 2004
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Tax reduction/ benefits increase |
Federal tax/benefits |
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---|---|---|
|
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(dollars) |
||
Pre-2000 budget | ||
Tax | 5,100 | |
Canada Child Tax Benefit (CCTB) | 1,733 | |
Goods and services tax (GST) credit | 0 | |
Total net federal tax (tax minus CCTB) | 3,367 | |
Five-Year Tax Reduction Plan | ||
Reduction in tax | 911 | |
Increase in CCTB | 637 | |
Increase in GST credit | 76 | |
Total net federal tax reduction | 1,623 | |
Total net federal tax reduction (per cent) | 48.2 | |
Post-Plan budget net federal tax (tax minus CCTB and GST credit) | 1,744 | |
First full-year impact (2001) | ||
Reduction in tax | 347 | |
Increase in CCTB | 235 | |
Increase in GST credit | 0 | |
Total net federal tax reduction | 582 | |
Total net federal tax reduction (per cent) | 17.3 | |
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- The information provided above compares taxes that would be paid by a one-earner family of four earning $40,000 in 2004 with and without tax reductions provided by the Plan.
- Without taking into account the tax reductions proposed, this family would pay $3,367 in net federal personal income tax in 2004.
- By 2004, this family will pay $1,744 in net federal personal income tax, a reduction of $1,623 or 48.2 per cent.
- In 2001 alone, this family’s net federal taxes will be reduced by $582.
Two-Earner Family of Four and an Income of $60,000: Tax Reduction by 2004
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Tax reduction/ benefits increase |
Federal tax/benefits |
|
---|---|---|
|
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(dollars) | ||
Pre-2000 budget | ||
Tax | 6,656 | |
Canada Child Tax Benefit (CCTB) | 845 | |
Goods and services tax (GST) credit | 0 | |
Total net federal tax (tax minus CCTB) | 5,811 | |
Five-Year Tax Reduction Plan | ||
Reduction in tax | 812 | |
Increase in CCTB | 734 | |
Increase in GST credit | 0 | |
Total net federal tax reduction | 1,546 | |
Total net federal tax reduction (per cent) |
26.6 | |
Post-Plan budget net federal tax (tax minus CCTB and GST credit) | 4,265 | |
First full-year impact (2001) | ||
Reduction in tax | 273 | |
Increase in CCTB | 228 | |
Increase in GST credit | 0 | |
Total net federal tax reduction | 501 | |
Total net federal tax reduction (per cent) |
8.6 | |
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- The information provided above compares taxes that would be paid by a two-earner family of four earning $60,000 in 2004 with and without tax reductions provided by the Plan.
- Without taking into account the tax reduction proposed, this family would pay $5,811 in net federal personal income tax in 2004.
- By 2004, this family will pay $4,265 in net federal personal income tax, a reduction of $1,546 or 26.6 per cent.
- In 2001 alone, this family’s net federal taxes will be reduced by $501.
Typical One-Earner Family of Four
Impacts of Proposed Five-Year Tax Reduction Plan by 2004
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Proposed tax reduction measures by 20041 | ||||||||||
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Total income | Federal tax pre-2000 budget | Increase personal and spousal amounts | Increase 2nd and 3rd brackets | Reduce the middle rate | Eliminate surtax | Enhance Canada Child Tax Benefit | Other indexation | Total relief2 | Total relief as a % of federal tax3 | Federal tax post-Plan |
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$ | $ | $ | $ | $ | $ | $ | $ | $ | $/% | $ |
15,000 | -4,398 | -173 | 0 | 0 | 0 | -869 | -55 | -1,097 | -1,097 | -5,495 |
20,000 | -3,601 | -274 | 0 | 0 | 0 | -869 | -55 | -1,198 | -1,198 | -4,799 |
25,000 | -2,000 | -274 | 0 | 0 | 0 | -1,268 | -55 | -1,597 | -1,597 | -3,597 |
30,000 | -37 | -274 | -37 | 0 | 0 | -1,268 | -172 | -1,751 | -1,751 | -1,788 |
35,000 | 1,710 | -274 | -487 | 0 | 0 | -594 | -172 | -1,526 | -89.3 | 183 |
40,000 | 3,367 | -274 | -487 | -150 | 0 | -637 | -76 | -1,623 | -48.2 | 1,744 |
50,000 | 6,467 | -274 | -487 | -450 | 0 | -723 | 0 | -1,934 | -29.9 | 4,534 |
60,000 | 9,592 | -274 | -512 | -750 | 0 | -809 | 0 | -2,344 | -24.4 | 7,248 |
75,000 | 14,783 | -288 | -852 | -1,103 | -2 | -920 | 0 | -3,165 | -21.4 | 11,619 |
100,000 | 22,396 | -288 | -852 | -1,103 | -364 | 0 | 0 | -2,607 | -11.6 | 19,789 |
125,000 | 30,008 | -288 | -852 | -1,103 | -727 | 0 | 0 | -2,970 | -9.9 | 27,039 |
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1 In calculating the amount of the tax reduction by 2004, the following assumptions were made: annual inflation factor of 1.8 per cent on average is used over the five-year period; personal amount: $8,000; spousal/equivalent-to-spouse amount: $6,800; middle tax bracket threshold: $35,000; upper tax bracket threshold: $70,000; middle tax rate: 23 per cent; 5-per-cent surtax: eliminated; the Canada Child Tax Benefit base benefit increased by $70 in 2000 (including indexation) then indexed; the rate at which benefits decline with increases in income lowered to 2.07 per cent for a one-child family and 4.14 per cent for a family with two or more children; the threshold at which the base benefit starts to be reduced: $35,000; the National Child Benefit supplement increased by $200 per child by July 2001 (including indexation). |
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2 Negative values indicate a reduction in net tax paid to the federal government. | ||||||||||
3 Where individuals and families receive more in federal refundable credits (CCTB, GST credit) than they pay in federal income tax, the federal income tax reductions are indicated in bold and represent the increase in the net benefits they receive from the tax and transfer system. Percentages are not meaningful so the dollar amounts are repeated. |
Typical Two-Earner Family of Four
Impacts of Proposed Five-Year Tax Reduction Plan by 2004
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Proposed tax reduction measures by 20041 | ||||||||||
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Total income | Federal tax pre-2000 budget | Increase personal and spousal amounts | Increase 2nd and 3rd brackets | Reduce the middle rate | Eliminate surtax | Enhance Canada Child Tax Benefit | Other indexation | Total relief2 | Total relief as a % of federal tax3 | Federal tax post-Plan |
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$ | $ | $ | $ | $ | $ | $ | $ | $ | $/% | $ |
15,000 | -4,571 | 0 | 0 | 0 | 0 | -869 | -55 | -924 | -924 | -5,495 |
20,000 | -4,503 | -68 | 0 | 0 | 0 | -869 | -55 | -992 | -992 | -5,495 |
25,000 | -3,650 | -287 | 0 | 0 | 0 | -850 | -55 | -1,192 | -1,192 | -4,842 |
30,000 | -2,366 | -287 | 0 | 0 | 0 | -1,230 | -55 | -1,572 | -1,572 | -3,938 |
35,000 | -576 | -148 | 0 | 0 | 0 | -1,291 | -172 | -1,611 | -1,611 | -2,186 |
40,000 | 820 | -295 | 0 | 0 | 0 | -777 | -172 | -1,244 | -1,244 | -424 |
50,000 | 3,179 | -295 | -37 | 0 | 0 | -648 | 0 | -980 | -30.8 | 2,199 |
60,000 | 5,811 | -295 | -487 | -30 | 0 | -734 | 0 | -1,546 | -26.6 | 4,265 |
75,000 | 9,822 | -295 | -487 | -300 | 0 | -863 | 0 | -1,945 | -19.8 | 7,877 |
100,000 | 15,794 | -295 | -863 | -750 | 0 | 0 | 0 | -1,909 | -12.1 | 13,885 |
125,000 | 22,904 | -303 | -1,339 | -1,358 | -60 | 0 | 0 | -3,059 | -13.4 | 19,845 |
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1 In calculating the amount of the tax reduction by 2004, the following assumptions were made: annual inflation factor of 1.8 per cent on average is used over the five-year period; personal amount: $8,000; spousal/equivalent-to-spouse amount: $6,800; middle tax bracket threshold: $35,000; upper tax bracket threshold: $70,000; middle tax rate: 23 per cent; 5-per-cent surtax: eliminated; the Canada Child Tax Benefit base benefit increased by $70 in 2000 (including indexation) then indexed; the rate at which benefits decline with increases in income lowered to 2.07 per cent for a one-child family and 4.14 per cent for a family with two or more children; the threshold at which the base benefit starts to be reduced: $35,000; the National Child Benefit supplement increased by $200 per child by July 2001 (including indexation). | ||||||||||
2 Negative values indicate a reduction in net tax paid to the federal government. | ||||||||||
3 Where individuals and families receive more in federal refundable credits (CCTB, GST credit) than they pay in federal income tax, the federal income tax reductions are indicated in bold and represent the increase in the net benefits they receive from the tax and transfer system. Percentages are not meaningful so the dollar amounts are repeated. |
Typical Single Individual
Impacts of Proposed Five-Year Tax Reduction Plan by 2004
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Proposed tax reduction measures by 20041 | ||||||||||
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Total income | Federal tax pre- 2000 budget |
Increase personal and spousal amounts |
Increase 2nd and 3rd brackets |
Reduce the middle rate |
Eliminate surtax | Enhance Canada Child Tax Benefit |
Other indexation | Total relief2 | Total relief as a % of federal tax3 |
Federal tax post-Plan |
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$ | $ | $ | $ | $ | $ | $ | $ | $ | $/% | $ |
10,000 | 137 | -148 | 0 | 0 | 0 | 0 | -6 | -154 | -154 | -18 |
15,000 | 899 | -148 | 0 | 0 | 0 | 0 | -27 | -175 | -19.5 | 724 |
20,000 | 1,695 | -148 | 0 | 0 | 0 | 0 | -27 | -175 | -10.3 | 1,520 |
25,000 | 2,492 | -148 | 0 | 0 | 0 | 0 | -27 | -175 | -7.0 | 2,317 |
30,000 | 3,529 | -148 | -37 | 0 | 0 | 0 | -144 | -329 | -9.3 | 3,200 |
35,000 | 4,875 | -148 | -487 | 0 | 0 | 0 | 0 | -635 | -13.0 | 4,241 |
40,000 | 6,129 | -148 | -487 | -150 | 0 | 0 | 0 | -785 | -12.8 | 5,345 |
50,000 | 8,729 | -148 | -487 | -450 | 0 | 0 | 0 | -1,085 | -12.4 | 7,645 |
60,000 | 11,354 | -148 | -512 | -750 | 0 | 0 | 0 | -1,409 | -12.4 | 9,945 |
75,000 | 15,864 | -155 | -852 | -1,103 | -60 | 0 | 0 | -2,169 | -13.7 | 13,695 |
100,000 | 23,477 | -155 | -852 | -1,103 | -422 | 0 | 0 | -2,532 | -10.8 | 20,945 |
125,000 | 31,089 | -155 | -852 | -1,103 | -785 | 0 | 0 | -2,894 | -9.3 | 28,195 |
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1 In calculating the amount of the tax reduction by 2004, the following assumptions were made: annual inflation factor of 1.8 per cent on average is used over the five-year period; personal amount: $8,000; spousal/equivalent-to-spouse amount: $6,800; middle tax bracket threshold: $35,000; upper tax bracket threshold: $70,000; middle tax rate: 23 per cent; 5-per-cent surtax: eliminated. 2 Negative values indicate a reduction in net tax paid to the federal government. 3 Where individuals and families receive more in federal refundable credits (GST credit) than they pay in federal income tax, the federal income tax reductions are indicated in bold and represent the increase in the net benefits they receive from the tax and transfer system. Percentages are not meaningful so the dollar amounts are repeated. - Table of Contents - Previous - |
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