Doug Ford’s Ontario: Taxing working Moms at a higher rate than millionaires.

Let’s go back to our example from earlier today, which examined how the income clawbacks on the new Ontario Autism Program impacts families:

The primary earner earns $55,000 a year. Mom is deciding whether or not to go back to work. The couple has two kids, one age 8, and a child on the spectrum under the age of 2. If she returns to work, the couple’s income tax bill will rise and she will also pay EI and CPP. Their Canada Child Benefit payments will be reduced, along with their Year 1 Ontario Autism Program Child Benefit spending allocation.

In my example earlier, I assumed that Mom was earning $52,000 if she returned back to work. I wondered what the effective tax rate would look like for different income levels for the Mom returning back to work. So I decided to examine income levels between $1,000 and $100,000. The short version: The effective tax rate for all the values I examined stayed above 47.9%.

In Ontario, a single man with no kids earning a million dollars a year pays $501,401.45 in income tax + CPP + EI, for an effective tax rate of 50.14%.

In our example, a woman earning less than $16,000 or more than $94,000 faces an equal or higher tax rate!

Here’s the raw data. Using our parameters, the effective tax rate on the secondary earner bottoms out at around $43,000. Here the lost Childhood Budget (Lost CB) only reflects the amount lost that they could spend during that year. (The total amount lost is 5x higher than that).