The attached commentary from earlier this year by Jessica Rapson, a Master of Public Policy student at the Munk School of Global Affairs and Public Policy, University of Toronto, and Ali Asrani, a JD student at Osgoode Hall Law School, examines the impact of the taxation of rising earnings and the corresponding reduction of benefits of low income Ontario taxpayers on their relative financial position, notably the incentive to achieve higher earnings.
This was written before the massive government intervention to assist citizens affected by the COVID-19 pandemic, but it is particularly timely now. As governments seek to establish a “new” platform for continuing assistance and to redefine the boundaries of that assistance to transition to encourage more self-reliance by citizens who have benefited from government programs, analyses of this nature are interesting to consider.
Click here to read how Ontario’s tax system hurts marginal earnings of low-income individuals.
Under this system, low income people are not motivated to work hard, but willing to keep poverty; in other hand, rich people have little benefit from marginal earnings only. It is policy failure which is common in many countries. Hence, Government really needs to refresh the mind and figure out a creative way to provide relief to low income individuals but still lead them to be confident and pursue eudemonia in the meanwhile.