1. Objectifs

Intentions :
«This E-Brief presents estimates of effective tax rates on personal earnings for two-parent families with children.» (p. 2)

2. Méthode

Échantillon/Matériau :
«Tax-rate estimates in this study have been computed using Statistics Canada’s tax and fiscal benefit microsimulation tool, the Social Policy Simulation Database and Model (SPSD/M).» (p. 2)

Instruments :
Questionnaire

Type de traitement des données :
Analyse statistique

3. Résumé

According to ours results, «[f]ederal and provincial policymakers should pay special attention to effective tax rates when they consider changes to the tax and transfer system. Clearly, geared-to-income fiscal benefit programs provide valuable financial assistance to families with children. However, these benefits can come with high family METRs [marginal effective tax rate] and PTRs [participation tax rate] for the second working parent in two-parent families, especially at lower income levels.» (p. 12) Indeed, «[t]he Quebec government followed through on [a] recommendation, and beginning in 2016, the new Quebec tax shield has been partly compensating workers for the loss of the work premium and the tax credit for childcare expenses – but only in the first year after they take on more work. On the assumption that work decisions are mostly influenced by short-term financial considerations, the tax-shield approach may enable governments to provide relief from high effective tax rates at a low fiscal cost (because relief is only offered for one year after taking on extra work) while maintaining the same level of generosity of targeted fiscal benefits. It will be interesting to monitor the effectiveness of this new measure in Quebec.» (p. 10-11)