Under the Ford OAP, A Mom earning $52K/yr faces a higher effective tax rate than a Toronto Blue Jay.
Let’s compare two individuals.
Individual One — A Mom who could earn $52,000/yr if she returned to work.
First, is our example 3 from Autism Tax. The primary earner earns $55,000 a year. Mom is deciding whether or not to go back to work, to a job paying $52,000 a year. 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.
Since their child is on the spectrum, their Childhood Budget to pay for therapy will be reduced by $37,800. Of that, they could spend $7,560 next year.
Individual Two — An unmarried man, no kids, living in Ontario, earning $750,000/yr.
Like our Mom, this person faces an income tax bill, EI and CPP. For simplicity, I’m assuming they’re not making any RRSP contributions. The minimum Major League Baseball salary for the upcoming season is $550,000 US, which translates to roughly $740,000 Canadian. But this example works for any unmarried man living in Ontario earning $750,000 next year, using the 20% rule.
Doing a bit of math, and using this handy calculator, we can figure out the effective tax rate for our two individuals.
Here the Mom would see 49.03% of her income lost through taxes and clawbacks. Our Toronto Blue Jay would lose 49.01%.
Note there will be other real-world complications, of course. Our Blue Jay will have to pay agent fees, while our Mom returning to work will have to pay childcare fees.
Note, that you can get much higher effective tax rates than our example here. In Example 4 from Autism Tax, where the income of the primary earner is $100,000/yr, a secondary earner considering taking a $73,000/yr job would face an effective tax rate of nearly 51% (50.9% to be exact), nearly two percentage points higher than our Blue Jay.
How can the Ford government possibly justify taxing a Mom earning $52,000, with two kids, one of whom is on the spectrum, at a rate higher than a major league baseball player or a CEO of a mid-sized company?
