, 14 tweets, 7 min read Read on Twitter
I will have something to tweet about this in a few minutes....
I was asked by @liberal_party to analyze the impact of their proposal to increase the basic personal amount.

I estimate this will lift 38,000 Canadians above the poverty line.

See the text of my letter here:
blogs.ubc.ca/kevinmilligan/…
...I also estimate that increasing the Basic Personal Amount will remove over 690,000 Canadians from paying federal income tax.

Of which:
* 275,000 seniors
* 112,000 youth (age 18-29)
* 58% women.

blogs.ubc.ca/kevinmilligan/…
The idea of (partially) phasing out the Basic Personal Amount has precedents.

In the US, the "PEP" (personal exemption phaseout) was part of the federal income tax until recently. It removed all of the personal exemption for high earners.

See here: investopedia.com/terms/p/person…
..in Canada, for 1998 and 1999, there was a supplement to the basic personal amount that was phased out for higher earners.

See the 1999 tax form here, schedule 13.

canada.ca/content/dam/cr…
But TBQH, I'm sure many of you just want to see the charts, right?

I've got some charts....
Here is the estimated value in 2023 of the Basic Personal Amount expansion for individuals by income group. You can see how it is phased out completely for the 250K+ group; partially for the 2nd highest income group.
Note that the max value of the BPA itself is only ~$286.

BUT--the spousal amount and equivalent to spouse amount are claimed by many individuals as well.

This pushes the average over $300 for in the middle income groups.

The Amount for Eligible Dependant (used to be known as equivalent to spouse amount) is a really important transfer for single parents: can essentially claim an extra BPA for one of their kids.

So, this BPA increase doubly helps many single parents.

canada.ca/en/revenue-age…
Now let's look at families.

I've put families into income groups according to "Census Family" income.

Note that a Census Family includes both parents and also any unmarried over-18 kids living with their parents.

So, some census families have 3 or more adults in them....
The impact of the proposed Basic Personal Amount increase across *family* income groups:

Two notes:
* still some in the 250K+ group receive it since the BPA is phased out on *individual* income.
* The avg in some groups is >$600 because some 'census families' have >2 adults.
Now let's look at the poverty impact of increasing the Basic Personal Amount.

As it is phased in, the projected number lifted above the MBM poverty line is about 38,000 people.
Next, we can look at the number of taxfilers lifted out of paying federal income tax.

There were about 28 million taxfilers in 2016.

Projecting forward, just under 700,000 people will be moved from paying >0 to paying <=0 federal income taxes.

>275K seniors
>112K youths.
Let's compare the impact of the proposed Basic Personal Amount increase (from @liberal_party) to the Universal Tax Cut (from @CPC_HQ).

Interestingly, the 2023-24 cost of these two proposals is comparable: $5.6B (LPC) vs $5.9B (CPC).
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