Single moms better off in Canada, at least when it comes to taxes
Compared to most developed countries, Canada has a relatively low tax and social security burden on labour income, according to recent OECD figures.
The average tax wedge, which is calculated by adding income taxes to employee and employer social security contributions and deducting cash transfers as a percentage of total labour costs, is lower than the OECD average for every family type, says the organization’s most recent Taxing Wages Report.
What’s more, the difference between Canada’s tax wedge and the OECD average has increased in the past 11 years, according to the report.
That’s right, they get back from the government more than they send in to the tune of 8.3 cent explains, McGill economics professor William Watson expolains in a recent analysis.
Among the 34 rich countries the OECD tracks, only three were more generous in this respect: Australia, with a negative tax of 11.4 per cent, Ireland at 9.5 per cent and New Zealand at fully 18.2 per cent. In all other countries, families in this position paid net taxes.
Of course, this still doesn’t mean single moms have any money. But, if you’re going to make do without much income, it appears that Canada is still the place to be.
As society gets richer it can both spend more on the people growth hasn't brought along, and claw back less, Watson says.
Does this make sense to you?
By Gordon Powers, MSN Money
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