Ease tax burden on poor, economist urges

Much of the talk about tax reform focuses on high-income, highly skilled workers, Rushton says. But cuts in federal-provincial transfer payments have resulted in high marginal tax rates among welfare recipients and lower income Canadians.

Policy makers should be aware of the disincentives that prevent low-income earners from improving their lots and contributing more to the Canadian economy.

Rushton presented his findings today in Ottawa at the Canadian Tax Foundation conference on tax reform and competitiveness. His study shows that people earning between $19,000 and $23,000 have “excessively high marginal tax rates” relative to high-income earners. “It’s a
cross-Canada problem,” he says.