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Middle-class mystery: Did their taxes go up or down?

The Claims: "We've put more money in people's pockets by cutting taxes for the middle class and raising them on the wealthiest one per cent." -- Justin Trudeau, speaking to the media after the election call on Sept. 11 "Justin Trudeau promised to help the middle class. But once he took office, he increased taxes [for] 80 per cent [of] the middle class." -- Andrew Scheer, speaking to supporters in Trois-Rivières, Que., later that same day The Facts:  The promise of a middle-class tax cut was central to the 2015 Liberal campaign. And the party fulfilled it shortly after taking office by dropping the tax rate on earnings between $45,282 and $90,563 to 20.5 per cent from 22 per cent. That was paid for by creating a new tax bracket for earnings above $200,000 with a marginal rate of 33 per cent, up from the old top rate of 29 per cent. The Department of Finance calculates that the 1.5 per cent "middle-class" reduction has benefited more than nine million people, saving singles among them an average of $330 a year and couples an average of $540 a year.The Conservatives' counterclaim is based on a 2017 study from the Fraser Institute, a B.C. think-tank that favours lower taxes and less government spending. That paper attempted to measure the net overall effect of a broader range of Liberal changes to the tax system, including the elimination of credits for public transit passes and children's sports activities and income-splitting for couples with young children — all of which were brought in under the previous Tory government. The Fraser Institute paper calculated that those additional changes by Ottawa turned a gain into a loss for most families with children, with 60 per cent across all income brackets paying more tax as a result. And in the case of middle-class families (defined as earning between $77,000 and $107,000 annually) the study claimed that 81 per cent of them now pay higher taxes — $840 on average — a figure that Scheer has been citing in his campaign stump speech.However, as a number of economists have since pointed out, the Fraser Institute's paper failed to include the effects of what replaced those cancelled tax credits — the new Canada Child Benefit (CCB) enacted by the Liberals. A rather large omission, given that those payments are now worth a maximum of $6,639 a year per child under age six, and $5,602 for each kid between six and 17.For exam ...Read more

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