Wednesday, January 19, 2005

This much I know is true

"Taxes, CPP erode take home pay" so sayth the Toronto Star (registration required):
Ed Clark, outspoken president of the Toronto Dominion Bank, wanted to know why his childhood buddies didn't feel better off than their parents. For the answer, Clark called up his chief economist, Don Drummond. The result is a scathing report chastising government for over-taxing Canadians, spending money on the wrong things and leaving take-home pay stagnating for 15 years. "(Clark) said, `Here is your task: Every time I get together with high school friends or university friends or other ordinary Canadians, they all say they don't feel any better off,'" said Drummond. It turns out they aren't imagining things, according to a TD report released yesterday.

For what it is worth, here’s my anecdotal evidence of the erosion of Canadian paycheques. I left the workforce in the spring of 1991 because of the birth of my first child. I returned to the work force in 1998. My salary level upon my return to the work force equaled the salary I had exited the work force from in 1991. Here’s the legal thievery: even though I claimed three dependants in 1998, I was robbed more in income taxes, CPP and EI bi-monthly than I had in 1991 as a single person with no dependents. The difference in the rate of legal thievery could not be explained away by the rate of inflation.

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