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New income tax cuts could benefit high earners: Watchdog

Canada’s highest earners could benefit from the Liberals’ newly enacted income tax cut more than those at the lower end of the income scale, the parliamentary spending watchdog says.

A report Tuesday from the parliamentary budget office says Canadians earning between about $160,000 and $227,500 will, on average, save about $257 a year in taxes once the tax cut is fully implemented in 2023.

It is just above the $211 to be saved by those earning around $51,000.
The Liberals sold the measure during the election and in the first weeks of their new mandate as helping low- and middle-income earners, while ensuring those at the high end of the income scale didn’t get to pocket any savings.

But the budget office says that isn’t likely to happen based on how the Liberals set up the income-tested tax break.

Currently a high-income earner could claim a tax credit for a spouse or child who earns little or nothing and benefit from the income tax change, even if they technically earn too much to qualify.

The change will mean that 900,000 people won’t have to pay any income tax — usually those at the very lowest end of the income spectrum, the PBO said. Overall, the budget office estimated that 21 million taxpayers will see some savings as a result of the change.

The tax break, which took effect January 1 and will be phased in over four years, increases the amount someone can earn before they are taxed on it, lifting the amount ultimately to $15,000 from $12,300.

The report says Canadian individuals will have $218 in average annual tax savings when the cut is fully implemented in 2023. The average annual savings for families by that time would be $364. Seems like everyone benefit from tax breaks. -CINEWS

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