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Analysis

The biggest winners from Doug Ford’s “middle class tax cut” would actually be high earners

People who make $85,900 a year and up - including millionaires - would gain the most from Ford's recently announced tax cut

May 11, 2018

When you picture a person in the middle class, do you think of someone making $86,000 a year? $100,000? $1,000,000?

Yesterday, Ontario PC leader Doug Ford added to his list of campaign promises by proposing what he called a “middle class tax cut” that would “put more money in the pocket of middle class families.”

But, as with Ford’s plan to help minimum wage earners that would actually take money out of their pockets, it’s a good idea to read the fine print.

And sure enough, the biggest winners from Ford’s newly-promised tax cut would actually be people who make $85,900 or more a year – including the very wealthy.

Ford’s plan would reduce the current tax rate of 9.15% on incomes between $42,960 and $85,923 to 7.32%.

This means a person earning at the lower end of the tax bracket – say, $43,960 a year – would only see $18 off their annual tax bill while those at the upper end would see a maximum of $786 taken off.

Not only that, but so would everyone who makes above the approximately $85,900 cutoff.

The cost of Ford’s tax cut?

A whopping $2.3 billion in lost revenue every year, according to the PCs’ own figures – money that could otherwise be invested in valuable programs, services, or public infrastructure.

Ford’s tax cut adds to a growing pile of campaign promises he has yet to fully cost out – let alone explain how he’ll honour without making painful cuts to public services.

As Jean-Paul Lam, an associate professor of economics at the University of Waterloo, recently told the CBC:

“I don’t think you will see a fully costed platform because I don’t think they know where the money is going to come from.”

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News

Why this economist says it’s time for conservatives to stop worrying and learn to love carbon taxes

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