Mr. Speaker, during his speech the hon. member talked about the comparative tax regimes in Canada and the United States. I was not going to speak, but I need to raise with the House some facts of which the hon. member maybe is not aware.
He talked about a marginal rate of 46% in Canada for taxpayers with income between the levels of roughly $30,000 and $60,000. The member is quite right that there is a federal tax rate of 26%. Taking a notional average of 50%, being the provincial income tax rate on the federal amounts payable, it grosses that up by another 50% to about 39%. So 40% is a good estimate of the marginal tax rate. However, marginal is the rate paid on each additional dollar. For the person at that same level of income, his or her average tax would be much lower because the marginal rate on the first $30,000 was only 26%.
I raise this issue because the member said that the comparative in the U.S. was 26% for the same income range. He has fundamentally missed a large portion of the U.S. burden in two instances. The first is that he did not take into account that there is also a separate state tax return required to to be filed by people in the United States.
In Canada, except for in the province of Quebec, federal and provincial taxes are collected by the federal government. The hon. member's numbers for Canada reflect both the federal and provincial components. The hon. member's number for the U.S., the 26% figure, represents only the federal tax component. He has left out state taxes and he is in error. I wanted to be sure the hon. member knew that and that Canadians knew that the member was fundamentally wrong in his facts.
Second, the hon. member did not take into account that Canadians pay for their health care system through their taxes. In the United States that is not the case. In fact, the last time I visited the United States and talked to legislators there, the average cost for a family of four for health care was about $7,000 a year. This is an important reconciling item between the tax burdens in Canada and the U.S.
Finally, to wrap up, the hon. member talked about the Canada child tax benefit. He concluded that was not any increase in net take home pay. He is absolutely right because the Canada child tax benefit is not a taxable item. When it used to be the family allowance, it was included in the taxes. Exemptions were given for children and a bit of tax was paid on that benefit. When the whole system was taken outside the Income Tax Act, 80% of Canadian children received the Canada child tax benefit. It is not taxable and it does improve the amount of money in the pockets of Canadians.
I raise these three issues to demonstrate that the arguments the hon. member posed to the House and to all Canadians is underpinned by facts which are ultimately wrong.