Presentation Transcript

1. Reducing Poverty, Improving Health Through Tax Reform Iglika Ivanova • Economist • Public Interest Researcher iglika@policyalternatives.ca May 26, 2014
2. Poverty and health inequities Income is a key determinant of health, even in countries with 100% health insurance coverage like Canada A growing body of research has linked low income to unfair and avoidable differences in health status Higher incidence of chronic conditions Higher prevalence of disability Shorter average life expectancy (bigger impact than cancer) Higher infant mortality Worse mental health Poverty is particularly toxic for children
3. Average depth of family poverty in BC From: First Call: BC Child and Youth Advocacy Coalition. 2013 Child Poverty Report Card.
4. It takes a whole community Governments at all levels The private sector The non-profit sector Community groups
5. Governments play an important role From: First Call: BC Child and Youth Advocacy Coalition. 2013 Child Poverty Report Card.
6. Child Tax Benefits in Canada Canada Child Tax Benefit (CCTB) Up to $3,654 per child under 18, income-tested but 90% eligible National Child Benefit Supplement clawed back at income over $25,356 and is completely eliminated by family income of $43,561 Universal Child Care Benefit $1,200 per child under 6, regardless of family income Taxable, so most families don’t know exactly how much they get Non-refundable child tax credit All non-poor families get $335 per child, regardless of family income Non-refundable child sports and arts tax credit Non-poor families whose children participate in eligible programs get $150 per child under 16, regardless of family income
7. Improving the Canada Child Tax Benefit Roll in the UCCB and non-refundable tax credits into the Canada Child Tax Benefit (an extra $4.4 billion) Increase the maximum available benefit per child to $5,400 Increase the income threshold at which the National Child Benefit begins to be reduced Require provinces not to claw back the benefit from provincial social assistance programs Net cost depends on design, up to $4 billion
8. Child Tax Benefit as a key poverty reduction lever Inclusive Non-stigmatizing Available to all, regardless of where in Canada they live Indexed to inflation Can be easily administered through the existing tax system (no additional application hurdles, etc.) Could reduce child poverty by 26% from current levels
9. Income splitting: tax reform that worsens inequities The maximum benefit of $6,550 goes to a one-earner family with income more than 185,000 Benefits skewed towards richest families 86% of families with children under 18 would not benefit (either too poor or dual earners with similar earnings) This inequitable tax cut that would cost $3 billion to the federal government and $1.9 billion to provincial governments
10. Other areas of action for the federal government Boost the GST tax credit Make employment insurance more accessible A national housing strategy A national child care plan Address poverty among Aboriginal people, recent immigrants and refugees, and people with disabilities
11. A matter of priorities Could lift 855,000 Canadians out of poverty Could significantly reduce income inequality Could boost the economy and reduce unemployment Would balance the budget only one year later than current federal government plan
12. The time is now We can afford to reduce poverty We can’t afford not to
13. Get involved Find out how at: www.bcpovertyreduction.ca