Tax cuts aimed at middle class

Liberals seeking election support Families to reap bulk of savings

OTTAWA— The Liberals are clearly looking to the middle class for support in their pre-election tax- cutting budget. The bulk of the savings proposed in Finance Minister Ralph Goodale’s tax- reduction initiative outlined in Monday’s mini- budget would fall on individuals making $ 30,000 or less and families with incomes of between $ 40,000 and $ 60,000, according to calculations by the finance department.

For instance, a single person with a $ 30,000 income would see his or her taxes decline by 11 per cent if Goodale’s proposals are implemented.

And, because the change is retroactive to Jan. 1, 2005, that individual would owe Ottawa $304 less in income taxes for 2005, when he or she files a tax return next spring.

Asingle person with an income of $ 20,000 would see his or her taxes decline by 16 per cent — or $ 211. A two- earner family with two children and $ 60,000 in income would see a 20 per cent drop in income taxes — for a saving of $ 499. A similar two-earner family living on $40,000 in income would owe no income taxes at all, which translates to a saving of $ 576.

In all, about 500,000 low- income Canadians will be exempted from paying any taxes under Goodale’s move to raise the basic personal amount of tax-free income by $500 and through a reduction of one percentage point in the lowest tax rate to 15 per cent.

That reduction would also be retroactive to last January.