Wednesday, August 30, 2006

Reality Cheques : Status of Women Canada (Part 2)

Another assertion, this time from the infamous Monica Lysack of the Childcare Advocacy people. She tells us that the new Universal Childcare Benefit unfairly helps families where one parent stays home, because those families have "little or no childcare expense."

I'm struggling here, so perhaps someone can explain. Let's take a typical couple about to have their first child. Let's suppose both parents are in work, and making $50,000 each. The baby is on the horizon and it's time to decide what to do.

If they both choose to keep working, they might have (say) $12,000 in daycare expenses. These are tax deductible, so the actual cost is closer to $8,000. Net result, a joint income of around $92,000 and a marginal tax rate of around 30-something percent.

If they choose for one of them to stay home, they lose $50,000 in income. Additionally (using my own experience) they have to spend more on heating, cooling and lighting at home, because there is someone at home at all times. Net result, an income of around $49,000 having taken off the extra expenses.

Please help me out, because unlike Monica, I really don't see how $92,000 is worse off than $49,000. But if she really feels that strongly about it, I'm willing to swap salaries.