How much tax is too much? How much is too little? What’s fair?
Rumour has it a certain orange-topped US president will try to win re-election by proposing a big personal tax cut for the middle class. Some of his wild-eyed opponents go the opposite route. The top personal rate, they cry, should be 70%.
Makes you wonder how we compare. Are taxes in Canada just?
Our prime minister caught a lot of grief last week for saying, “Low income Canadians don’t benefit from tax breaks because they don’t pay taxes.” The NDP flipped out. After all, low-income earners are oppressed. The wealth divide in Canada proves it. The lefties among us believe rich people generally evade and escape their fair share of tax because they’re crafty, can afford good accountants, are greedy and take advantage of tax breaks, dodges and shelters, especially if they’re investors or self-employed professionals. That was the justification last year for the T2 assault on small business owners, income-sprinkling and passive investments.
But, wait. What’s the actual story? Do wealthy folks stay that way because they screw the system?
Hmm. Let’s review some stats.
In the States the top 1% of citizens have an average income of $422,000. These people pay 37% of all income tax and have a tax rate seven times that of the bottom 50%. In fact the top half of income-earners pay 97% of the taxes, with the other half of the population funding just 3%. And the top 20% finance 70% of government revenues.
But that States is the land of Buffett, Gates, Bezos, Zuckerberg, Elliston, Trump and Bloomberg. The net worth of the richest 400 Americans is an average of $2.1 billion. That’s probably why the top few carry such a tax burden. They can afford it.
How do we compare?
In Canada you need to make $190,000 to be a 1%er, and the average income in the group is $381,300. Taxes for them jumped substantially under the current Lib regime, with the addition of a new tax bracket clocking in at roughly $220,000. That was a 24% increase, and takes $1.2 billion more from these people yearly. At the same time taxes on $45,000 to $90,000 folks were reduced by 11%. Claiming only the wealthy could benefit from it, the T2 administration also gutted TFSA contributions by almost half.
Concurrent with that, the Libs boosted benefits for the ‘middle class’ (ie – not the 1%ers) by billions with the Canada Child Benefit. This tax-free handout of roughly $6,000 per family costs the nation $22 billion this year, is geared to income and in an astounding number of cases actually wipes out the tax families pay.
So the result is this: Trudeau’s right.
Turns out 40% of Canadian families now pay no net income tax. They don’t therefore directly support the health care system, schools, the military, social services, cops or firefighters. The changes that have taken place mean the top 20% of income-earners now foot 70% of the country’s bills. Yes, just like in the US. Our small number of 1%ers (272,600) pays a hefty 18% of all taxes.
And how about the oppressed middle class?
If you believe the Fraser Institute, most members of this favoured group (making up 40% of the population) get a free ride – benefiting fully from all government services, but paying nothing for them on a net basis. For example a couple with three kids earning $60,000 pays about $7,500 in income tax but receives almost twice that in tax-free benefits. Two parents making eighty grand between them pay only a thousand in tax, after benefits of ten times that amount.
How does the country function when 40% hand over no tax and we pay people to have children?
Writing in the Financial Post, financial dude Ted Rechtshaffen made this observation: “Taxes are meaningfully rising for higher-income Canadians. In Alberta, the top tax bracket was 39 per cent in 2014. Today, it is 48 per cent, a 23 per cent increase. In Ontario, the top tax bracket was 46.4 per cent in 2013. Today, it is 53.5 per cent, an increase of 15 per cent. The prime minister is absolutely right: tax cuts do not help 40 per cent of Canadians because they do not pay any effective income tax. How do you like them apples?”
Of course, there are not enough rich people to milk in cold Canada. So for each year it has been in office, the current government has spent more than it raises in taxes. The total in new debt will be about $100 billion by the next election.
Another fact of life: once the government gives people money, it can never take it back.
Higher taxes. Big deficits. Entitled voters. Oh, boy.
172 comments ↓
Well, if you’re going to cite the Fraser Institute, the right wing’s favourite charity, I will counter with a CCPA link.
https://www.policyalternatives.ca/newsroom/news-releases/canada’s-tax-loopholes-are-expensive-regressive-and-increase-income
The CCPA wants to increase taxes on those who already carry 70% of the freight. That will mean fewer wealthy people when we already have a shortage. – Garth
Seems to me that most good tax breaks are geared to married people.
I usually work 70+ hours per week to take in about 4k gross. Net: about 1800
Last year I paid over 45k in fed income tax!
Really difficult to get ahead these days. Sigh. Back to work now
Turns out 40% of Canadian families now pay no net income tax. They don’t therefore directly support the health care system, schools, the military, social services, cops or firefighters.
I’m sorry Garth, but that’s just nonsense. They do pay other taxes like HST like property taxes. It’s also pretty rich to completely ignore indirect taxes like excise taxes and payroll taxes. They matter. And as you’ve pointed out many times over these past weeks, this group saves nothing. They’re spending all those hand-outs and thereby funnelling their benefits right back to the wealthy. So cry me a river.
I stated clearly – income tax. It is by far the biggest generator of government revenue. The wealthy also pay HST, property taxes plus every other levy, and usually in greater proportion. – Garth
Oh boy is right… it’s a sinking ship. Why bother trying to earn more when taxes even out the playing field? Instead of looking at just income assets should be looked at before benefits are paid. Why should someone with a couple million get all the benefits just because their income is 60k?
We are middle class-seniors so we don’t get any child tax benefit but we still pay our fair share of income tax.
Huawei Case = Liberals declare we are a country that follows the rule of law
SNC Lavalin Case = Liberals are not following the rule of law in this instance?
Yeah, a paradox, it is better to be poor than rich in Canada.
It would be interesting to know how much embedded taxes in everything we consume amount to.
So, this tax avoidance by married people, does it require kids or no? If no, I wonder if there is a market for arranged marriages for professionals for tax reasons…
Rumour has it a certain orange-topped US president will try to win re-election by proposing a big personal tax cut for the middle class. Some of his wild-eyed opponents go the opposite route. The top personal rate, they cry, should be 70%.
**************
Yup ever since you mentioned it about a year ago this has stuck with me. Trump will force the Democrats and others vote against the middle class.
Part of Trump’s strategic tool kit.
See how this unfolds. Advantage Trump?
I take it you don’t care for the CCPA? I thought you might post my comment and link, if only in the interest of balance. Ah well, your blog, your rules.
It was posted. You want a gold star as well? – Garth
Good advice for all.
“Be wary of strong drink. It can make you shoot at tax collectors… and miss.”
Robert A. Heinlein
And then at street level there is household debt at record highs http://www.chpc.biz/household-debt.html
The widening spread between total household debt and household mortgages means we are borrowing even more to maintain lifestyle.
Soon we will have to sell stuff to pay our collective taxes.
When mortgage interest rates hit 18.15% in 1981, the over-leveraged had to sell assets to escape the usurious state sanctioned interest rates.
We now have the cost of citizenship (taxes) and the cost of housing to contend with.
We appear to be tapped out as housing costs drop across Canada http://www.chpc.biz/6-canadian-metros.html
“Another fact of life: once the government gives people money, it can never take it back.”
That is correct. And that is what makes this country such a hopeless case for any ambitious kid hungry for success. There are very few careers worth pursuing here anymore. Manufacturing is dead, oil industry for now kaput, engineering jobs maybe down south… So what is left? Medicine, if one is prepared to stay at school into their early thirties then proceed working hundred hour weeks for the privilege of giving back half of their income. Law enforcement, government jobs, nursing or teaching just for the pension. So how do I advise my kids? I predict major brain drain in the future. Hell, it is already happening. Welcome to socialism.
Unfortunately, this type of discussion hardly ever includes the full story – how much is paid for by income tax vs. all the other taxes we are sprinkled with or what in Ontario we like to call revenue tools. Turns out its fairly easy to find…
https://www.fin.gc.ca/afr-rfa/2018/report-rapport-eng.asp
Revenues: 2017-2018: $313.6B
49%-ish are personal income taxes…
So, 60% of the population is paying 49% before any consumption taxes etc are included, oh and throw another $20B on that debt, that’s only around 2-3%, take if from the House of Commons HELOC…
Anti-feline racism run amok today. :(
How many times have you heard the mantra of taxing the hell out of those that plan ahead so that the reckless can continue being reckless?
People who love taxing others remind me of the accountants we had at a company I worked for. They were up giving a big presentation about how much money they saved shutting down plants and they were just getting started.
One of our sales guys stood up and said why don’t we just shut all the plants down and revel in all the money we are going to save. The whole place went quiet.
The next day they walked out half the high priced accounting staff and decided on a new strategy.
The idea that we can tax the “rich” to death to get prosperity is for fools. Canadian fools.
As we can see the extra tax we are extorting still is not enough and our government needs more.
Time to tax away your OAS benefit. The rich (those that get $40,000 a year in RRSP income because they were prudent) don’t need it anyway.
The country has become a farce.
#5 nlabixa on 02.10.19 at 2:04 pm
We are middle class-seniors so we don’t get any child tax benefit but we still pay our fair share of income tax.
—————————————————–
Any pension income you’re splitting thereby reducing taxes maybe?
Division politics doesn’t really help any of us…
The problem is that conservatives & boomers think money grows on trees. They are a tax cut (for the rich) and spend ideology. How many times have you heard boomers say “What do I care, I’m not going to be around to deal with it?” That’s their mantra about everything. The deficit, the debt, climate change, income & wealth inequality, etc. They don’t care what they leave behind, even to their own children and grandchildren. And you certainly can’t trust conservatives with money when they think that tax cuts for the rich pay for themselves with trickle down magic.
Trump has already jacked up the deficit to over $1 trillion per year and conservatives worship him.
Trudeau has kept the deficit steady at btwn $10-$15 billion and conservatives loathe him.
Really makes me think.
Trump trillion-dollar-plus deficits are putting America on a path to fiscal ruin
https://www.usatoday.com/story/opinion/2018/08/20/donald-trump-trillion-dollar-plus-deficits-fiscal-ruin-column/986236002/
Canada posts budget surplus in first six months of 2018/19
https://ca.reuters.com/article/topNews/idCAKCN1NQ2LI-OCATP
A very insidious process Garth. Take capital from the higher earners, and feed it to the masses to consume.
This is better referred to as capital destruction when we are literally eating/destroying our nation’s wealth.
This leaves individuals handicapped in their efforts to accumulate capital to invest or build companies. And when we cant grow capital to invest in productive activities, we become inefficient and unproductive. This is why we are so uncompetitive on the world stage.
The result is a positive feedback loop of growing demands for free stuff sustained by capital consumption, while taking the capital from the ever dwindling sources of handicapped wealth creation, causing further dwindling, resulting in higher tax rates to sustain the tax revenues.
This process wont end until we are either successful in electing a party willing to attempt to address this burden, or we simply destroy enough capital that the economy ceases to function even for those at the receiving end of benefits. Venezuela is a recent example if one needs a reference.
I made the mistake of opening today’s Toronto Star first few pages today. As I say it’s not news anymore only UN programming.
The thesis I’ve heard, North America is to be brought to its knees as a welfare state. Prove it wrong.
The Toronto paper lead story was of forced UN migrants in Calgary of all places. Apparently the women never worked back home and have no skill set – nor in English. No prob the man can work…but no longer may a man work and afford a family.
Egro state assistance. I’d be all for it if it were say universal child care.
Down south Occasional Cortex (they say women are being used as the Trojan Horse in this agenda) is looking to ban “carbon”. As in feudal ages we will find ourselves huddling around our megre carbon rations trying to keep warm. Burning for survival will of course be banned. Drones and satellites and home “speakers” and Nest camers will monitor all.
Sounds cra-cray right. Now the flood of food stampers and Section 8ers will begin in USA.
The Star also told us how front/stuntman Mad Max is Alt. Whatever that means. Split the mind then split the vote. Freedland ,says the Star is our hero.
Welp I support our elected UN reps. Recall in the last news cycle she even posed with a blue hat wearer. At the airport.
Anyone buying a house into this mess wil face carbon taxes which are but a demoralization tool on tax payers.
Other ones like the promise of new affordable housing units in Toronto. All will go toward mandatory UN re-settled peoples.
Good on you tax payers.
Big picture folks big picture.
Don’t believe me – just watch.
#7 Millennial on 02.10.19 at 2:11 pm
Yeah, a paradox, it is better to be poor than rich in Canada.
—————————————————–
Nope, false paradox, its better to have money then not have money – anyone who is or was poor – really poor, like make an utility payment or buy food poor, will not tell you otherwise…
Rest in peace, my dear sweet beagleface. Gone almost 6 years now, but never forgotten. xo Thanks for your excellent blogs, Garth, and for all the great dog pics.
Rumor says that most people rather be high tax paying high income earners than no tax paying low income earners.
the middle class and poor are suckers, milk them dry and laugh in a sunny tax haven. they don’t even understand the difference between nominal and real. hahaha
https://www.cbc.ca/news/business/paradise-papers-leak-1.4387338
https://globalnews.ca/news/3846891/paradise-papers-justin-trudeau/
https://www.scmp.com/business/companies/article/2185432/chinese-developers-new-years-resolution-diversify-robotics-green
Chinese developers’ New Year’s resolution – diversify into robotics, green cars and Beijing’s other pet projects
20 out of 24 developers tracked by JPMorgan Chase missed their 2018 sales targets, underscoring why they are looking ahead
There is going to be a public inquiry soon that could be multi-provincial showing 100 billion dollars in laundered money.
Stats from the government are completely irrelevant and useless.
@#6 Fren Allen
“Huawei Case = Liberals declare we are a country that follows the rule of law
SNC Lavalin Case = Liberals are not following the rule of law in this instance?”
++++++
Nah,
SNC Lavain Case = Liberals want to defer the conviction to save those lucrative, $$$$billion dollar federal contracts for their election contributors.
Trudeau wants his Lobbyist election cake and to eat it too.
Voters? Pfffft
Taxation over 10% GDP is theft.
Felix on 02.10.19 at 2:37 pm
Anti-feline racism run amok today. :(
===============================
Feel better?:
https://media1.picsearch.com/is?grueo4HPpFO1AkhmfDGC7VAqHpLyZyYdTziHfsI26HA&height=214
Young Canadian cat:
https://media2.picsearch.com/is?lsyaiShP644Cer4nrCskrD9kbpQq_F11vxcSo1AiGGI&height=224
“Another fact of life: once the government gives people money, it can never take it back.”
What about the common refrain here that Canadians should be expecting higher taxes in the future to, you know, pay for this government-given money?
And, DUH, of course rich people pay most of the taxes. Who else is going to? Poor people don’t have any money, remember? Blood from a stone etc.
And if you don’t like the CCB (or equivalent), just remember, disincentiving Canadians from having kids means the only way to maintain (let alone grow) the economy is through immigration. And we all know how the deplorable xenophobes around here feel about that.
Rumour has it a certain orange-topped US president will try to win re-election by proposing a big personal tax cut for the middle class.
Yes, Trump will attempt to engage the middle class with a large tax cut in 2020. Of course, Trump already screwed over the middle class with his 2018 personal tax changes which is resulting in lower refunds.
https://www.usatoday.com/story/money/2019/02/08/taxes-2019-why-my-refund-lower-2019/2816418002/
Not that you should receive a large tax refund. Why let the government use your money in advance.
“Another fact of life: once the government gives people money, it can never take it back.”
What about the common refrain here that Canadians should be expecting higher taxes in the future to, you know, pay for this government-given money?
And, DUH, of course rich people pay most of the taxes. Who else is going to? Poor people don’t have any money, remember? Blood from a stone etc.
Hey Thor Turner,how you going, I have an update for you.
Back in late August 2018 you featured this place in a post.
2573 w 3rd ave, Vancouver.
https://www.greaterfool.ca/2018/08/22/then-there-was-one/
Back then they wanted close to 4 million and expected it to sell within weeks.
Fast forward.
Now it is on for 3.31, which is the assessment number.
https://www.zolo.ca/vancouver-real-estate/2573-west-3rd-avenue
Whoever owns it paid 3m in June 2017 and is still trying to get out whole, but the only hole might end up being in their foot.
This has been Greaterfool Vancouver Real Estate entertainment correspondent, Mr Flop…
M44BC
Getting back to real estate for a minute…..
These comparisons on income tax alone are not valid, need to look at total tax burden, which must include EI & CPP (both sides), Workers Comp., and taxes and fees that are increasingly a big part of a house purchase, all of those taxes and fees which are often financed and part of the mortgage burden.
That evens things up a lot, even though income tax is a big part of federal revenue, it isn’t for the cities and less so for the provinces, all of whom are milking the same taxpayer.
Also the US numbers don’t include Social Security and medicare of 15.3% flat of the first US$120k, which brings in more than income tax.
At the end of the day, all governments are past the Laffer curve maximums on income tax, which is why it will need to be wealth taxes on real estate and “registered” accounts. It it’s registered, they can tax it!
Not happening. – Garth
That proposed US 70% tax rate came from the Left’s current darling….ex Bar Tender….Alexandria ’Occasional Cortex’……
And she probably meant a flat 70%, I doubt she understands tax brackets.
She also last week published (and then quickly pulled), her multi Trillion $ green manifesto which was literally ban all forms of fossil fuel transportation, farting cows, and give a wage to people ‘unwilling to work’…I kid you not….
If these rabid socialists ever gain power we will all be Venezuela.
Well, growing up on a farm we had very little money. Not poor, but definitely lower middle class – never purchased any vehicle new, almost no vacations, very little eating out, presents were practical things mostly, yada yada. But lots of hard work, out doors, and large family. I look back quite fondly on it, and of course the farm has been in our family for generations. Wouldn’t trade that experience for one with more money, ever.
But full time farming was getting harder to make a living at (unless going really large), and was basically non stop work, so I went the route of university & engineering, and into the tech sector. Paid my way through school by taking co-op, which is a year longer but you are mostly self sustaining (graduated with a little student debt).
Over the years, putting in lots of overtime (not paid of course – your salary is your salary, regardless of hours worked), work travel, more responsibility, stress – make it to the point of doing quite well. Not 1% now, but the next group down I would say. Pay a sh*t load of income tax. No real deductions except RRSP for the salaried.
All of course to be told here broadly in the steerage section (and really any Internet comment forum) how lucky people like me are: born at the right time, need to pay more of my fair share, taxed more on what I make, taxed more on what I have accumulated (assets), etc.
Yep – you got it leftist, millennial, socialists. Nothing I have is a result of hard work, school, saving, planning, or caring for my family. Simply handed it all on a silver platter, and should feel guilty for every dime I have earned.
I have no doubt that the tax rules & regs will change over the next decades to take even more from those who even partially succeed. It is the end result of democracy in countries with weak culture and work ethic.
But that is OK. I can roll with the times. My plan is to head into early semi-retirement and draw down my savings in the most tax efficient manner. Within 5 years, the amount of tax I pay will be decreasing substantially.
Someone else can pay for the coming socialist paradise. I will be tinkering on the farm with my side business (good deductions there), with my paid off house and well padded RRSP/TFSAs, getting into the income threshold (on paper) where the gov’t goodies can be had.
So long, and thanks for all the fish.
When you truly understand what’s it like to not even have bus money, to struggle to keep a roof over your head, have no support etc., then we can talk about why people with more pay more. It took a long time, and now that I am high salary earner, I gladly pay more taxes, because I can still save way more money, than I could before. We do not all come from the same starting place. We do not all have the same opportunities, access to resources, skills, etc. If we continue to think that those of us who make more shouldn’t pay more, then who will? I am okay with it, but I can see the big picture from both sides.
“How does the country function when 40% hand over no tax and we pay people to have children?”
I think it’s fantastic that this was brought up on your post today Garth! Why?……..I mean Why???? does our government “Pay people to have children????” seriously??? WHAT’S UP WITH THAT!!! This needs to stop yesterday, immediately! If you want children you should make sure you can bear the expense for raising them on your own like my wife and have done.
Whoops — sorry about the duplicate post.
Sure but where do our taxes go? Justin has this country on a downhill slide into poverty. His policies will keep many young Canadians paying and paying long after he is gone.
Justin does not have the capacity to solve the real problems of this Country. We are selling our oil at a 20 to 25% perpetual discount. Why because weather we ship it on tanker trucks, rail, or carry it in pails we have to get it to market.
All Canadian communities are losing hundreds of millions every year in lost royalties. Money that would help pay for education, health and other programs.
Having inadequate pipeline infrastructure is no way to run a Country such as ours. We are a resource based economy with the second largest oil reserves in the world.
The lost opportunity costs are not reflected. Add that to the existing debt plus the lost taxes of many unemployed trade workers.
Justin should stick to sock puppets and colouring books. His identity politics will only carry this country further into poverty.
#2 Doomsday prepper on 02.10.19 at 1:39 pm
Seems to me that most good tax breaks are geared to married people.
I usually work 70+ hours per week to take in about 4k gross. Net: about 1800
Last year I paid over 45k in fed income tax!
Really difficult to get ahead these days. Sigh. Back to work now
======================
What? 4k gross and net is only 1800? How can it be possible? Even if you work 70 hours every week for the whole year, the gross will only be $200k, and the tax rate is only 35% for a single guy.
Also, you claim that you work 70 hours a week. That is 14 hours a day considering you only work 5 days. Even if you work 6 days, it has to be almost 12 hours a day. What this means, you have to leave home at 7:00am, start working at 7:30am, taking 30 minute lunch at noon (that is 4.5 hours in the morning), work until 6:00pm without break (that is another 5.5 hours), then take a quick snack break and work until 10:15pm and come home at 10:45pm (that is another 4 hours). This scenario will make up 14 hours a day. I don’t think you work this many hours.
Many stupid folks like you assume they work 70~80 hours a week, but it is not that many when you count the number of hours. I didn’t count any restroom break.
Man its getting dark in here. I may need a Scotch for medicinal puposes. Maybe wee Trudeau fiddling/dancing and providing bread and circuses to all while Rome burns is what the majority wants but its a tad short sighted. Fortunately Trump knows his way around bankruptcy law so the coming collapse if we don’t start to wake up may be less severe for Americans.
That is the potential dark eventual outcome for Canadiens as well of course but we’ll call it something else — a socialist paradise perhaps, where we’re finally equally miserable. Unless the reality that you need more givers than takers, that people are not equal; even if the UN declares it so, and that our leaders are not always honourable even if parliament calls them so, sinks in, and we decide to make Canada great again by making ourselves great again.
Whining is so useless. Lets make this blog great again. Personal responsibility is the key.Take charge of your own life. Life is not fair now; it never was. Challenges can be met –we can all do better. Light a candle. Plant a garden. Send a socialist to Venezuala for a vacation. Ask them to find a dog or a cat and take a picture for the blog. It may be the last one.
Good article Garth….
IMHO..the basic synopsis is the UPPER middle class will get squeezed ala “heads on platters” for optics
….the ULTRA Rich have a plethora of means to avoid…err “significantly reduce” their tax burden…
…and we simply BORROW BORROW BORROW to make up the 99% of the difference..its worked well in the past ….correct ?
Garth, you obviously know how this all works, how about a blog on the use, of legal offshoring of the 1%’s income / wealth, held in trusts and other mechanisms designed to avoid sovereign taxation?
Current tax rates are not the problem, legal loopholes letting the mega wealthy, not pay the same % that the average small business (150K or less?) owner does, is the real issue that A.O.C., Elizabeth W. and Bernie S. are conveniently ignoring.
Carlin was right: “It’s a big club and you ain’t in it”
https://www.youtube.com/watch?v=i5dBZDSSky0
A brief history of how successive governments of all stripes have shifted the tax burden from corporations to individuals.
https://www.thestar.com/news/canada/2017/12/14/100-years-of-canadian-income-taxes.html
You think you pay your fair share? when you are also paying the taxes for the 40% of families who pay zilch? Can you do math? And what about how when you had your kids you did not get that free ride? and you really think you are paying your fair share?
#5 nlabixa on 02.10.19 at 2:04 pm
We are middle class-seniors so we don’t get any child tax benefit but we still pay our fair share of income tax.
I find it hard to understand how many people don’t understand what a divisive government we have and where it is leading us. We need to understand the 8 Alinsky’s rules on how to go from a democracy to a socialist society. We are almost there. With more and more people wanting handouts from government The writing is on the wall as to where we will end up.
Canada and US are not apples to apples comparison. Our taxes go towards healthcare and many other things. We have a small population so benefit more from services paid for by taxes.
Its the new normal for walking the dog, when the weather becomes appropriate. Why not prepare a political sign for your doggy to wear? An example might be: Our Canine Union Will Not Be Voting Red in 2019.
@#19 Screwed Delusional Millenial
“The deficit, the debt, climate change, income & wealth inequality, etc. They don’t care what they leave behind, even to their own children and grandchildren.”
+++++
Please remember these words as your children and grandchildren will be saying the exact same thing about you in 30 years….
Elect Trudeau (SNC Lavalin will thank you) increase the Debt by another $100 billion in 4 more years…
Tax and spend, tax and spend is the Trudeau way.
But in the Boomer vein of thinking……
I think I’ll ask the cashier to “doubleplasticbag” my sixpack of beer….the land fill and oceans dont have quite enough plastic and I want to keep those Ontario plastic factories humming.
“How much tax is too much? How much is too little? What’s fair?”
asks our Intrepid Blogger (a former Minister of National Revenue…nudge, nudge, wink, wink).
Nothing like taking a look at Memory Lane.
MTR’s in Canada for a taxable income of $400,001 or more (Year MTR):
1949 84%
1971 80%
1972 59.93%
1986 53.38%
1987 51.08%
1994 46.4%
Anybody still want to bitch about taxes nowadays (including you Garth)?
More like: Thank your lucky stars as I do.
SOURCE: Table 3 shows all the Taxable Income brackets from $1 to $400,001 for the above select years:
https://www.fcf-ctf.ca/ctfweb/Documents/PDF/1995ctj/1995CTJ5_02_Smith.pdf
Canada once had great potential. T2 will make it into a socialist backwater.
Talked to both my kids last night, just a few years from finishing university. Both mentioned the high cost of housing in Canada as compared to the US . Not to mention asking why Canada was such a great place to live given it is -30 in parts of the country.
I would not dissuade them from taking their advanced degrees and finding employment in another country. I might even follow them.
I have little confidence in the country that I was born in and was once proud of.
A loose amalgamation of provinces that no longer work in the nation’s best interest.
A federal political and transfer system designed to transfer dollars from the west to buy votes in the east.
No longer governed by the people through democracy , but rather by the courts, who see fit to kowtow to every little grievance by the never ending oppressed classes, or to those who know how to manipulate the system.
And a tax system that discourages ingenuity and initiative.
And an electorate that is content to be bought with its own money.
A country that is massively rich in natural resources such as foresty, minerals and energy, and with brilliant people who are able to exploit it in a sustainable manner, and yet we are governed by a group of fucking morons who care more about gender equity and apologizing form the past, than they do about creating quality jobs for the next generations.
All to live in a country where, despite high wages, the majority of people cannot afford to buy a home without going into massive debt and where for 1/2 the year we freeze our collective asses off.
Canada once had great promise, but the politicians have massively screwed it up.
There are so many other places in the world that are so much better to live than in Canada now.
What a shame. What a wasted opportunity.
Hi Garth. First time commenting, love the blog. The Ontario government is updating the Real Estate and Business Brokers Act and is looking for suggestions regarding the rules & ethics Real Estate agents act by. I’m sure your readers will have many, many opinions
Here is an article explaining it in the Star:
https://www.thestar.com/news/gta/2019/01/31/ontario-looks-at-revamping-real-estate-rules-around-brokers.html
Here’s the link to the survey:
https://www.ontario.ca/page/consultation-modernizing-rules-ontario-real-estate-professionals
This SNC-Lavalin scandal may have traction.
It could be one of the nails in the Liberal coffin come October.
Many sense deception from Trudeau.
For example, Rex Murphy (at his usual wordy, sardonic best with a sharp eye in this case):
https://nationalpost.com/author/rmurphynp
My favorite was the take by the BODY LANGUAGE people (yes, even the American’s found Trudeau and his new Minister worthy of deception and lying body language):
https://www.youtube.com/watch?v=RjU9N1kqElQ&t=13s
Well, Trudeau got away with “not” pushing a woman MP, “not” fondling a woman Reporter and “not” pressuring a woman Justice Minister (former). How he can convince people he is a “Feminist” is beyond me with a track record like that. P.T. Barnum was correct.
See if Trudeau gets away with this scandal as well. Hopefully the bought and sold Cdn. MSM will actually do their job on this story of corporate influence and graft.
A government can take it back if they want to or tax it. I am retired and there isn’t a dime of my income that isn’t taxed and that includes OAS. And I am no where near being a 1%er. I am sick and tired of a select group getting tax-free money and that rest of us have to pay for it.
#52 Dolce Vita on 02.10.19 at 4:59 pm
“How much tax is too much? How much is too little? What’s fair?”
asks our Intrepid Blogger (a former Minister of National Revenue…nudge, nudge, wink, wink).
Nothing like taking a look at Memory Lane.
MTR’s in Canada for a taxable income of $400,001 or more (Year MTR):
1949 84%
1971 80%
1972 59.93%
1986 53.38%
1987 51.08%
1994 46.4%
Anybody still want to bitch about taxes nowadays (including you Garth)?
More like: Thank your lucky stars as I do.
SOURCE: Table 3 shows all the Taxable Income brackets from $1 to $400,001 for the above select years:
https://www.fcf-ctf.ca/ctfweb/Documents/PDF/1995ctj/1995CTJ5_02_Smith.pdf
+++++++++++++++++++++++++++++++++++
Did you read the whole document, or only focus on that one table?
Did you consider that as those very high tax rates came down, the government started taxing capital gains, which previously it had not done? That direct taxes in other areas were also going up?
The picture isn’t as simple as that graph shows.
An added note to my previous comment: Here’s a thought. I think we shouldn’t be paying income tax anyway – just consumption tax. That would eliminate money laundering, the costs to investigate it and the CRA.
Forgot to mention that SNC-Lavalin’s President and CEO Neil Bruce has been lobbying the Fed’s to exhaustion about avoiding prosecution.
From the horses mouth:
“Office of the Commissioner of Lobbying of Canada”,
click on the Monthly Communication Reports tab:
https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmry?clientOrgCorpNumber=4995&sMdKy=1549838409368
Take a look at the dates and the “who’s, who” being lobbied. On 2018-09-18 he got a face to face with none other than Bill “I forgot about that French Villa” Morneau.
Persistent an understatement.
Why it’s hard to believe Trudeau that he did not pressure Jody Wilson-Raybould.
Good she stood her ground and did the right thing, but it cost her. Live to fight another day is how I hope she sees it (and does).
#11 Sold Out on 02.10.19 at 2:24 pm
I take it you don’t care for the CCPA? I thought you might post my comment and link, if only in the interest of balance. Ah well, your blog, your rules.
It was posted. You want a gold star as well? – Garth
————————————————————————————————
If he gets a gold star,I want one as well.
I didn’t work for it but if he gets one, I want a bigger one.
Felix # 16
..or a case of “Felinophobie”!
#52 Dolce Vita
Hey, if we are cherry picking statistics let’s go back to 1917 when income tax was 4% to finance a World War or every year before that when it was ZERO.
Does that qualify for Memory Lane?
Guess what? The people who actually pay taxes for the services YOU use are likely not keen to pay more.
Jay
Recent sale report.
Been showing a lot of detached loses lately so let’s see what happened to these guys that tried to flip a Burnaby townhouse.
The details…
5911 Mayview st, Burnaby.
Paid 775k July 2017
Sold 740k
Originally asking 828k
Assessment 760k
So a lady asked me to look at Townhomes in Surrey yesterday and I saw a few in her target area that sold for just a little bit more than purchasing price, basically Pink Draws, the numbers tick upwards but no money is made after expenses suggesting some sort of levelling.
New stuff is still coveted, although perhaps not as enthusiastically as before.
These guys were trying to flog something that is 40 years old.
That market has most likely peaked for now.
Someone recently bought a block of land in East Van for 10k more than these guys.
At least you own the dirt.
Look at what is happening out at U.B.C Endowment Lands where they have leasehold.
Having trouble drumming up business for 800k houses in one of the more ritzy parts of town.
Seen a few go after giving crazy discounts.
No one wants to pay 20k lease and no have any chance of appreciation.
No one wants to put anything down on the endowment…
M44BC
2018-09-07 : $828,000
2018-10-17 : $799,000
2018-10-31 : $760,000
https://www.zolo.ca/burnaby-real-estate/5911-mayview-circle
https://www.rew.ca/insights/272829/5911-mayview-circle-burnaby-bc
International Milk the Rich Day today
https://www.zerohedge.com/news/2019-02-10/progressive-battle-cry-tax-rich-tax-rich-hows-it-working-out
There a lot of Canadians who work for cash only. Handymen, construction workers, cleaning ladies, babysitters, people with businesses who sell cash only on the side. I wonder what percentage they are.
As well, there are people flipping houses, make a profit, do not declare income.
I wish there was a way to clean this up and get them to pay their fair share, rather than taxing further the honest (or the ones that cannot hide their income)
For example, the govt once had rebates for home renovations. That forced people to get a receipt to claim and it forces workers to declaim their income. However, this program ended and people became dishonest again.
#57 PastThePeak
Read it many times in its entirety (so should you) and have posted about it here before at least 1 other time, last year.
The paper indeed talks about Capital Gains having been an offset to lowering of MTR’s (+/- a wash in essence) but read in what year that started.
Also, read the Conclusion, last sentence.
He debunks the theory of income redistribution via personal income tax – which is why the Trudeau Liberals got elected and in part, the NDP in BC. He devotes an entire section as to why that is wrong minded (and not for the scarcity of rich people paying more as Garth postulates).
One of those facts not lost on Quebec’s Premier as of late (intentionally or not, smart guy):
https://www.theglobeandmail.com/politics/article-quebec-to-receive-14-billion-equalization-boost-while-oil-producing/
#21 TurnerNation on 02.10.19 at 2:47 pm
I made the mistake of opening today’s Toronto Star first few pages today. As I say it’s not news anymore only UN programming.
Freedland ,says the Star is our hero.
—
This Freedland?
How Chrystia Freeland Organized Donald Trump’s Coup In Venezuela
Her active effort to replace Venezuela’s Government began with her formation of the Lima Group, nearly two years ago.
Canada’s Ottawa Citizen headlined on 19 August 2017, “Choosing Danger”, and their reporter Peter Hum interviewed Canada’s Ambassador to Venezuela, Ben Rowswell, who was then retiring from the post. Rowswell said that Venezuelans who wanted an overthrow of their Government would continue to have the full support of Canada’s Government:
“‘I think that some of them were sort of anxious that it (the embassy’s support for human rights and democracy in Venezuela) might not continue after I left,’ Rowswell said. ‘I don’t think they have anything to worry about because Minister (of Foreign Affairs Chrystia) Freeland has Venezuela way at the top of her priority list.’”
https://www.zerohedge.com/news/2019-02-07/how-chrystia-freeland-organized-donald-trumps-coup-venezuela
Instead of increasing taxes, gov’t first must bring cost efficiency to their services and making sense which services must be provided.
http://reports.weforum.org/pdf/gci-2017-2018-scorecard/WEF_GCI_2017_2018_Scorecard_EOSQ043.pdf
https://www.statista.com/chart/12407/wage-growth-around-the-world-in-2018/
Who pays the tax bill :
https://www.taxpayer.com/news-releases/ctf-study–who-pays-canada-s-income-tax-bill-
Economic Consequences of Increasing Taxes on Top Earners :
https://www.fraserinstitute.org/sites/default/files/measuring-the-distribution-of-taxes-in-canada.pdf
Canada takes $44 of every $100 earned. (my estimation is way higher though..)
https://www.youtube.com/watch?v=cC-HUZAZIXM&feature=youtu.be
Here is the FP on 40% don’t pay any tax in Canada.
https://business.financialpost.com/personal-finance/taxes/trudeau-is-right-40-of-canadians-dont-pay-income-taxes-which-means-someone-else-is-picking-up-the-bill
Heather Hallam on 02.10.19 at 5:44 pm
A government can take it back if they want to or tax it. I am retired and there isn’t a dime of my income that isn’t taxed and that includes OAS. And I am no where near being a 1%er. I am sick and tired of a select group getting tax-free money and that rest of us have to pay for it.
————
I agree with you. But..There is nothing we can do. T2 will be re-elected because most Canadians get their news from Facebook and social media and will vote for the “ Pretty boy.” I hope I am wrong….
Are consumption taxes really progressive, given that the mega wealthy don’t spend all their income on consumption? A lot of their income is saved and invested.
#19 Screwed Canadian Millenial
isn’t you family prepared for ‘the event’? no? sorry to hear that. most of the people on this blog are prepared, i’m certain. personal responsibility is too difficult for some though.
https://medium.com/s/futurehuman/survival-of-the-richest-9ef6cddd0cc1
Here’s an interesting dichotomy for you. The bottom 20%ers make up 80-90% of the country’s smokers, upon whose tobacco taxes the government is addicted.
Duhhhhhhhh
Some of THE MAIN platforms for COMMUNISM are:
(i) CENTRAL BANK
(ii) ABOLITION OF PRIVATE PROPERTY
Are we there yet ????
(hint…its never overtly obvious…..but use “reducto ad absurdum” aka “boiling the frog” for dummies)
I stated clearly – income tax. It is by far the biggest generator of government revenue. The wealthy also pay HST, property taxes plus every other levy, and usually in greater proportion. – Garth.
And you should…your home, vacation properties, businesses are worth more!
Are taxes in Canada just?
Could be about honesty. Perhaps even fairness – but justness is a different issue.
re#65 Vision – Amen! and I’m an atheist.
This is exactly why I have such issue with our tax system – people are blatantly cheating in broad daylight and I get the rubber glove if I miss one dividend payment on my tax return. I’m a 1% -ter in income and I can tell you I’m not ballin at all. I pay more than my fair share and have always done so with honesty.
I’ve said it here multiple times – take a few government employees to Waterloo or Oshawa – hire a team of 21 year old computer science majors and build an algo that tracks postal codes will multiple tax filers – the renter filing in the basement under the same postal code and the landlord who does not declare. Take them to the cleaners, let the MSM carve a nice story out of it and force people into honesty. Cross reference homes that have changed owners in less than 18-24 months, check who declared the principal residence exemption – then did into it a little – you will find a treasure trove of flippers and speakers who don’t declare shit.
This is not me wining – I’m saying the Govt is barking up the wrong tree.
Math
Tax the rich is music to the ears of many naive voters but common sense tells you it is not a solution.
If they increased income tax on all the 1% by $20,000 per year (which is a lot of an additional tax on a $190K per year income where the 1% starts) that works out to $16 per month split between the other 99%. Factor in a bunch of those 1% would leave or divert income away for taxation and it would be much less. Often these tax increases net less tax revenue.
Taxing the rich does not work because there is not enough of them to tax. Simple math. On the other hand since there are so few rich it works great for political spin. They are only pissing off 1% of the voters by making the tax the rich statements. Too bad there are so many naive voters that lap this stuff up as if it is a solution.
The only way to bring wealth the the masses is to expand the economy. For that you need the rich and less taxation. Proven time and time again.
The big problem in Canada is that most of Canada’s 1% are paid by and/or their businesses or professions are heavily subsidized by the government.
That includes nearly all doctors. Many/most lawyers. Quite a chunk of engineers. Most bankers, etc.
Get rid of the implied subsidies or outright payments from government, allow an actual free market, and there’d be a lot more respect for those who legitimately earned their way into the 1%, rather than just people who were lucky enough to hitch their wagon to something that’s heavily supported by or subsidized by government.
Also high tax rates encourage the wealthy to borrow to invest more. As the cost of borrowing is deductible against income, while capital gains just accrue at far lower rates. Since the TSX has basically spent the past 20 years stagnant with minimal returns, there’s a pretty good argument that government policy should encourage the rich to step up their investment in such. Similar applies at the corporate level.
What is ‘fair’?
Is a TFSA limit of 6k/yr fair? Why not 20k or 50k?
Is it ‘fair’ to have a progressive tax regime? Why not just employ a flat tax?
Is societal help for the less well off ‘fair’. Why not just let them fend for themselves, or give them just enough to maintain a heart beat?
Is it ‘fair’ that the wealth of a country is concentrated in the hands of so few? Why not reduce current tax rates for the wealthy to encourage trickle down benefits?
Garth, in presenting the data the way he did and as a conservative, seems to think current income tax rates or an increase to higher tax rates is ‘unfair’.
In my view, voters decide what is ‘fair’ based on the varied policies of political parties. I can live with that, even though current policies are definitely not in my favour financially.
#57 PastThePeak
Never mind explaining it to this person.
It would be nice of this person to post a direct link on what we now pay for all services just to live. Yep, that means gas,oil,water,hydro,garbage,phone, groceries, property taxes, maintenance, and if one can afford it nowadays, cable, internet, user fees, for any type of license one needs to breath, inspectors,etc, I can go on for ever but Garth would kick my butt, you get the picture, life was much simpler back then, Dolce Vita, do some home work. There is no comparison to then and now!
My boomer parents did very well on one wage, me, a so called gen-x got my ass kicked due to recessions and high interest rates, today’s kids unless they rebel, I fear for them. T2 supporters, it is your right but please see what it actually going on, there is a wealth of info including this blog that will educate. Unfortunately this I-Phone society is going to get a very rude awakening once they turn 36 to 40, maybe a whole heck sooner.
Stay warm and safe fellow Canadians.
Sorry, Garth, not buying this typical Boomer distraction you are positing here today.
The next big tax grab will be BY and FOR the Boomers, as usual, to support their exploding health care costs. Most prime Boomers are now fast approaching or past the age of 70, and naturally their health issues are becoming more prevalent as they move into their eight decades. They always did know how to whine and complain to get their way, and this will be their main subject for the next decade or more.
Full credit to them, they have voted more regularly than millennials, but that will soon change.
But Boomer health care costs is what is going to cause the next increase in taxation, and it will be seen as a valid reason. Tax fairness for millennials? Don’t kid yourself.
Thankfully, Boomer demographic and political influence is about to start dropping soon. I can’t wait, frankly.
#16 Felix
Sometimes I do feel for you (barely) but not today, that pic is priceless! :)
Rutger Bregman’s viral tax speech did not go down well in Davos
https://www.youtube.com/watch?v=T3gFNd54reg
hahaha
what an idiot, loser.
Greaterfool encourages us all to use the TFSA.
I once got into an argument at work with a colleague on the subject of taxes and children. I asked him why I, who has no offspring, should be burdened with paying for his kids, either directly or through tax breaks for his family. Your choice to have kids, you foot the bill. Anyone not think that is fair? Sophie, what do you think?
Garth, you wrote: “If you believe the Fraser Institute” … and then failed to balance that with anything at all.
Fact is NO, I DO NOT “believe” that incredibly biased far-right, foreign-funded, Conservative disinformation outlet on any subject whatever and I am offended that you quoted them as you did because it degrades your stellar reputation for accurate analysis.
All the best. M
Millennial:Better to be poor than rich in Canada: a paradox?
Its not a paradox. Its easier for a rich man to hide among the poor, than for a poor man to hide among the rich.
#7 – Obviously, you’ve never been poor or known poor people.
Some other thoughts…
– Income tax should never exceed 50%
– Consumption taxes are the fairest of all
– I’d prefer to have 0 differences among types of income, no taxes under $30k and a flat 25% on all income above that minimum. it would be so easy to manage and file.
The Hon. Michael Wilson, finance minister in the government of the Rt. Hon. Brian Mulroney, has died.
Refresh my memory, did Muldoon run surpluses, or deficits?
A principled man. Our collective loss. – Garth
==============================
I don’t doubt that majority of politicians do “mean well”…but then they are in they enter the demarcation zone of “awareness”…oops and ouch !!!
Next poli- quantum leap is :
(i) stay true to one’s principals
VERSUS
(ii) hold nose..risk oxygen depletion to brain cells…mortgage one’s soul et al….
I retired very early to give Gen X’ers and Millennials a chance to carry the insane tax load that I was carrying when I worked. No need to thank me. Thank You. Work harder, I’m depending on you.
Hey Garth,
When are you going to turn on “allow threaded replies” so some meaningful conversations can take place on your sorry blog? We peons don’t have the ability to editorialize like you do when you see silly comments. Or just make me an admin – – that works too!
It’s really the Tax The Rich Day…
“It’s common to wonder whether business owners grew the pie, or simply extracted more money from workers,” said Zidar. “It looks like both are important, but growing the pie may be more significant.”
In order to determine whether top owners were simply collecting checks or actually contributing to their businesses, the researchers analyzed what happened to businesses after an owner died or retired. In both cases, profits plummeted by over 80% and did not recover.
https://www.zerohedge.com/news/2019-02-10/its-not-idle-rich-study-reveals-working-rich-driving-top-us-incomes
It look like Obama was wrong: they DID do it…
The wealthy in Canada do not pay most of the income tax, high income earners do. The wealthy in Canada get their money from businesses they own, dividends and capital gains at very advantageous real tax rates.
FYI:
HASTE MAKES waste….. IN A HOT RE market
https://www.news.com.au/finance/business/manufacturing/taped-support-pillars-concrete-cracks-filled-shocking-opal-tower-revealed-by-whistleblower/news-story/58881e051481c68a16d7efa23e7d8a00
#70 Basil Fawlty on 02.10.19 at 6:47 pm
Are consumption taxes really progressive, given that the mega wealthy don’t spend all their income on consumption? A lot of their income is saved and invested.
—-
Return on investment – except TFSA ‘G_d bless Garth’ – is also taxed.
Liberals are trying trickle up economics, and good for them. Trickle down economics is a waste of time and money. Also, big points. For trying to get people having children again. Prediction: China has shot themselves in the foot. Spend some time studying demographics.
While we are on the subject of taxes, I am okay paying my marginal rate of over 50% if I felt that it was going to programs designed to our social programs, keeping universities affordable for our kids, etc… There is of course an upper limit on the marginal rate that is palatable though (even to me.. I paid 58K in income tax last year).
However, i am super-pissed with the Gov’t not going after all the big-time cheaters who get a free ride.
They include corporations setting up offshore to evade Canadian taxes…. the panana paper type citizens. Another larger group of people who do not pay their share are the new “permanent residents” who settle in our big cities claiming 20K in Canadian income while living in Shaunessy, Dunbar etc…(and geting all sorts of gov’t services, language classes, health care etc for their family), all the while the main breadwinner is overseas making big $$$ (largely untaxed by the home country) that is hidden to the CRA…. World-wide income should be taxable for these people by Canada, but the CRA has no resources and no ability to get the required information….. Perhaps closing these loopholes for evasion would allow for a lower overall marginal tax rate for us all…..
Interesting post!
This narrative correlates with a recent article that exposed the fact that 50%-70% of students at Ontario’s community colleges were benefiting from from free tuition!
https://www.cbc.ca/news/canada/toronto/ontario-schools-tuition-data-1.5003005
40% of students in all post-secondary institutions were enjoying free tuition! Exactly the same number of households that pay little or no income tax!
No fan of Doug Ford, but at least his administration took action reversing free tuition.
Everyone needs some skin in the game! Life is not fair.
Great post today Garth. All the stats support your argument.
@#54 Dolce Vita
“Why it’s hard to believe Trudeau that he did not pressure Jody Wilson-Raybould.
Good she stood her ground and did the right thing, but it cost her. Live to fight another day is how I hope she sees it (and does).”
+++++
If this scandal grows legs…….
AND the voter attention span lasts longer than its usual 3 days……
We MAY see Wilson-Raybould re-elected while Trudeau goes down in flames.
A one term wonder.
Thank God.
Garth.
Whats your opinion on a Flat Tax for both business and indivduals?
Say 15% across the board?
No deductions, no flim flam.
Everyone pays 15%.
There are definately groups of Canadians that get tax preference. Not sure lower income is, I mean how do you take more from someone making little to nothing. I feel for people that are truly stuck and am happy to help fund a social democracy.
I think the group that has the most favourable tax environment is corps. I mean how does a realtor running a personal real estate corporation, making 400k, pay less as a percentange the an employee photo copiers making 120k.
Heres the thing – we all have opportunities to be realtors, teachers, gov workers or any other class that pisses us off. So rather then moan about the ridiculous rates I pay I am going to find a way to incorporate. I don’t want to beat them, would rather join them. Don’t like your situation, change it.
I know most Canadians hate paying high taxes.You can work less,quit paying the sin taxes,buy a electric car,take a bus,ride a bike.I buy most of my clothes at thrift stores.Oh yeah eat less,don’t eat out,make your own coffee or tea.Always ask yourself do I need this, can I buy this used and avoid the tax.Every purchase should be thought out process,do I want to pay tax to a corrupt welfare/war run goverment?
Travel to Mexico or Asia in the winter to avoid the Siberian like winters.These places are so affordable, even with a horrible dollar exchange.Laugh at all those Canadians working back home like slaves while your enjoying the beach and having a cold beer.Thats what I’ll be doing today in Thailand.Life is all about choices ,make good ones that will benifit you and your loved ones.If you don’t like something in your life,work like a dog and change it.Remember life is about love,peace and happiness!Always eat healthy and exercise.God bless.
Should those who earn more money pay more taxes than those who earn less? Of course, this only makes sense. If there was a flat tax at say 20%, then of course the higher earners would pay proportionally more tax. And no one would complain.
But that is not what we (or most countries) have. It is a tax system when you make more, the % that you pay increases as well. So you don’t just pay MORE tax, you start to pay A LOT MORE.
Is it fair that the wealthy pay more. Absolutely.
Is it fair that the wealthy pay more than 50% on marginal income? I would say no. Any value above 50% is pure confiscation (and the disincentive to increased work or investment is a no brainer).
And of course during all of this acrimonious back & forth, the real question being lost is “why is gov’t so bad at managing spending, and requiring ever more taxes”? Wasn’t the Liberal modest deficits (which will be over 3x more debt over their 4 years) supposed to drive a better economy and growth? Invest in infrastructure? Yeah, none of that happened. Just higher spending.
High Taxes. Responsible for the French Revolution, think guillotines. Also WWII, think barrels of money to buy a loaf of bread (think hyper-inflation).
#94 – if you want to misrepresent Obama’s point, then yes. if you want to accept his point that infrastructure costs are paid for by everyone, then no.
Wow, lots of angry people today. Taxes are way more interesting than RE.
57 Heather – if you are retired collecting OAP then you should have a portion of your income tax free. Maybe one of the other blog dogs can tell you the amount.
A classic
https://www.youtube.com/watch?v=ZI7hJHLyBZo
#109 yorkville renter on 02.10.19 at 9:39 pm
#94 – if you want to misrepresent Obama’s point, then yes. if you want to accept his point that infrastructure costs are paid for by everyone, then no.
—
“researchers analyzed what happened to businesses after an owner died or retired. In both cases, profits plummeted by over 80% and did not recover.”
No obvious change in the circumstance of infrastructure.
What is misrepresented?
morality is not a numbers game.
it isn’t a matter of “benefits received”; taxation is wholly an ethical consideration.
if taxation is immoral at any level, then it is always wrong.
50% tax is good; but 51% tax is suddenly bad?
this is nothing but the emotional rhetoric of a weak and/or devious mind.
I like the idea of a flat tax rate.
Pick a percentage, say 10%.
The guy who makes $300,000/year still pays ten times more tax than the person making $30,000/year.
Everyone has skin in the game— there are no free-riders under this system. Unlike our “progressive tax system”, people don’t face disincentives for working hard.
Too bad it has no chance of being implemented.
For anyone interested in an hour of enjoying some good old upbeat blues with Albert King and Stevie Ray Vaughan recorded in Hamilton Canada back in 1983 then watch this, trust me, this is just a classic. We need a break! :) Ok, Felix you can watch as well if you want! :)
https://www.youtube.com/watch?v=i1LzW-XijXE
“Hey Garth,
When are you going to turn on “allow threaded replies” so some meaningful conversations can take place on your sorry blog? We peons don’t have the ability to editorialize like you do when you see silly comments. Or just make me an admin – – that works too!”
Yes Garth, I agree. This would be a nice edition to your blog and it would make reading comments a lot more enjoyable. I know it’s ur blogs and ur rules, but maybe u can think about this one.
#53 AB Boxster on 02.10.19 at 5:17 pm
Canada once had great potential. T2 will make it into a socialist backwater.
Talked to both my kids last night, just a few years from finishing university. Both mentioned the high cost of housing in Canada as compared to the US . Not to mention asking why Canada was such a great place to live given it is -30 in parts of the country.
I would not dissuade them from taking their advanced degrees and finding employment in another country. I might even follow them.
I have little confidence in the country that I was born in and was once proud of.
A loose amalgamation of provinces that no longer work in the nation’s best interest.
A federal political and transfer system designed to transfer dollars from the west to buy votes in the east.
No longer governed by the people through democracy , but rather by the courts, who see fit to kowtow to every little grievance by the never ending oppressed classes, or to those who know how to manipulate the system.
And a tax system that discourages ingenuity and initiative.
And an electorate that is content to be bought with its own money.
A country that is massively rich in natural resources such as foresty, minerals and energy, and with brilliant people who are able to exploit it in a sustainable manner, and yet we are governed by a group of fucking morons who care more about gender equity and apologizing form the past, than they do about creating quality jobs for the next generations.
All to live in a country where, despite high wages, the majority of people cannot afford to buy a home without going into massive debt and where for 1/2 the year we freeze our collective asses off.
Canada once had great promise, but the politicians have massively screwed it up.
There are so many other places in the world that are so much better to live than in Canada now.
What a shame. What a wasted opportunity.
Well said indeed sir…a crying shame.
#2 Doomsday prepper on 02.10.19 at 1:39 pm
I usually work 70+ hours per week to take in about 4k gross
That’s pathetic
Find a new gig
I’m (just barely) a 1%-er. I have a generalist university degree but I’ve never “used” it in that it’s not a professional degree, and I’m in an unrelated field. I’ve made my money the hard way- first with my back and my brawn, with long hours of physically demanding, dirty, often dangerous work. Moved up to supervisor, same long hours and a mix of both physical and management duties. Ground it out. 20 years in, I get paid now to shoulder a different type of burden: OpEx and CapEx and ROI, Sales and revenue, safety and HR, engineering and quality, growth and acquisitions, permits and expansion, demanding clients and struggling vendors, fixed costs and variable. Administration and IT, Subcontractors and employees, industry advocacy and fierce competition, declining margins and rising costs, big strategy and small details, headcount andbsalraies, R&M, leases, depreciation and raw materials inputs, inbound and outbound logistics, regulations and compliace. And the days are longer than ever, but my job now is to make sure the business runs and is positioned for today and tomorrow, and to worry about all of it, every minute, whether I’m at the office or in an airplane or at a rare dinner with my wife and kids. Oh, and I own a small business of my own that I run with my “free time”.
And I don’t regret a minute of it, because it’s made me a good living, provided for my family, and perhaps most of all I’ve learned so many things, gained great wisdom about life and people and the way the world works, and met some truly amazing people along the way. My job has given me experiences that not many people get to have in life. But I’ve made tremendous sacrifices in my personal life, none more so than just the pure stress of managing a great deal of responsibility- it’s taken it’s toll mentally and physically, and aged me far beyond my 37 years. I am proud to be able to pay taxes- my children and my community need services, hospitals, schools, and recreation facilities. I’m happy to help provide them. But I do wonder sometimes if I’m doing it wrong. I don’t need to earn what I earn. I do it for the experience and the money comes with the role. I often wonder if I shouldn’t make a change, move into half the house I currently have, take more time off, be home for dinner every night, and be “present” when I am home, instead of physically there but mentally worrying about whether I can deliver the monthly OI expectations. At some point, very soon, it’s NOT going to be worth it. With enough net worth already socked away, it’s awful tempting to downsize, make $70k, and pay little to no tax, reduce risk and exposure, stop fighting like hell for every edge. I’d still enjoy the same health care, kids would go to the same school, I’d still drive the same vehicles because I live modestly (giant ass house the exception) and probably take even more time off for camping and skiing and fishing. I’m not sure what my point here is Gartho other than maybe catharsis, but I do know that if there is less incentive for people to work hard, they will not. Period. Full stop. If I give half of every incremental dollar to the government, where’s the incentive to push for those dollars? Wouldn’t it be better to work on being happy? They can’t tax a smile, or time with my family. And if I feel like this, others do, too, and where does that leave us? A nation full of people who won’t bother to push ahead, because there’s no reward in doing so. But that’s unsustainable in the long term. We need to incentivize people to work hard, and the tax system is the key.
End of whineing. I’ve got a Q1 update to prepare.
Will millenials stay poor or stay stupid?
It’s a close race!
Re-check your numbers Garth – USA is on pace for its largest deficit since 2011 , while Canada’s is shrinking (had a surplus last 6 months )
Facts
#83 Millennial Realist on 02.10.19 at 7:51 pm
“…They (boomers) always did know how to whine and complain to get their way, and this will be their main subject for the next decade or more.”
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Abject nonsense.
Boomers NEVER asked/demanded anything of the government, we developed our skills, worked, saved and contributed to our communities by being decent and law-abiding citizens.
I’ve never so much as had a speeding ticket in 50 years.
Allow me to guess:
You don’t coach soccer or basketball for youngsters in your area.
#93 Lepidoptera
huh, then do not read the comments, just read Garth’s Blog. Us posters will certainly not cater to you; only to the author! Start your own blog!
The analysis isn’t quite correct. The rich are the point of collection for most taxes, but where do they get their money? If you said selling their goods and services to the masses you’d be right. That’s the only place they can get money. So if you raise taxes on the rich, you raise prices for the poor. It’s just easier to collect the money if you only have to audit 272,600 people. But everybody pays, one way or another.
People like Bill Gates got really rich through building successful business. Their wealth is in equity. Taxing the rich’s equity though something like a wealth tax could be very negative for the formation of new innovative companies. How is the next Bill Gates going to build the next Microsoft if he has to sell 2% of his company every year to pay taxes? To whom will he sell? Will he still have to pay capital gains taxes on the shares he sells to pay the wealth tax? Well then he’s selling 3% per year to pay the 2% wealth tax. And let’s not forget the government gets him in the end with the capital gains tax already. They just have to wait for him to die.
But anyway back to taxing the rich and taxation in general. Taxes distort prices. They are, for any business man or woman, part of the calculation they do when setting prices. Even a simple real estate holding company puts taxes in their spreadsheet when determining what the rent will be and what the price of the building should be. So the taxes get passed along to the tenants or the building does not get built. If it is a residential building those people paying the higher rates are the tenants. If it is a commercial building the taxes go into the price of whatever they are selling. There is no other way for it to work because the rich don’t have any money. They sell stuff to you and me.
All taxes work this way. They distort prices higher for everyone, and thus in the end of the day we all pay very close to the same effective tax rate once you follow the money.
Sure, an economist will point out that the rich cannot raise their prices indefinitely because demand will drop, and that is true. So it isn’t 1 for 1. So raising the tax a doctor pays from 50% to 70% isn’t necessarily going to cause fees to rise 15% (or whatever the number is). But it will cause fees to rise until supply and demand are back in balance. This will be at a lower level of supply and a higher price. So whenever the government raise taxes, wherever they do it in the economy, everyone pays more and gets less stuff. Well, that isn’t exactly true, you get more government and less stuff.
Wrapping the tax issue up in some sort of social justice context does a good job of selling the policy to the 50% of the population with below average IQ, and probably a good portion of the population above that who just haven’t taken an economics course, bu the fact remains higher taxes, wherever they are applied, means we all pay more for less.
That’s why governments use progressive income taxes instead of say a flat sales tax. If they used a flat sales tax, the poor would be able to see on their receipts exactly how badly they are getting stiffed. But the charge is still there, it’s just hidden in the price. But now “greedy corporations” get the blame.
So remember folks, any taxes applied to the rich in order to make them pay their “fair share” ends up almost entirely in the price you pay for things (if demand is taken as a constant, which it’s not, so you get less stuff too).
Imagine if we had a flat tax. What if that flat tax was reasonable so those who are not too well off would feel pride for contributing while retaining some monetary freedom. What if this same flat tax encouraged better participation from those that have more means as it would be seen as fair. All would have a level playing field for potential albeit proportional success.
D#54 AB Boxster on 02.10.19 at 5:17 pm
Canada once had great potential. T2 will make it into a socialist backwater.
Talked to both my kids last night, just a few years from finishing university. Both mentioned the high cost of housing in Canada as compared to the US . Not to mention asking why Canada was such a great place to live given it is -30 in parts of the country.
I would not dissuade them from taking their advanced degrees and finding employment in another country. I might even follow them.
I have little confidence in the country that I was born in and was once proud of.
A loose amalgamation of provinces that no longer work in the nation’s best interest.
A federal political and transfer system designed to transfer dollars from the west to buy votes in the east.
No longer governed by the people through democracy , but rather by the courts, who see fit to kowtow to every little grievance by the never ending oppressed classes, or to those who know how to manipulate the system.
And a tax system that discourages ingenuity and initiative.
————–
You wasted money on your children’s education.
You should have made them play hockey.
After all, they are Canadians.
Hockey rules here.
They could be playing in the NHL now.
I think The Smoker will agree.
According to Ted of FP post, the reason the bottom 40% dont pay “effective income tax” is because Ted defines ” effective income tax” as ACTUAL INCOME TAX minus CCB minus a few other much smaller benefits. Makes for a cute trolling article title that the folks with a blue mindset will lap up, as evident here. If you lower their ACTUAL INCOME TAX they will have more money obviously. However, since on average they only pay 4.6% , an income tax cut would help, but not too much. This is what Mr Socks meant, this however doesn’t make such a good title though, nor does it allow all the other parties to feign outrage as effectively.
I also enjoyed the examples were the examplary couple earns income in the most unrealistic but most tax effective manner, exactly 50% each, below or slightly above yearly minimum wage (so they get working tax benefit), and has twice the average number of kids (birth rate per woman is 1.6 as 2016, source world bank) , live in North Ontario (to qualify for another tax benefit) Tada! They have a HUGE negative “effective income tax”! . That’s sloppy work by Ted when purposefully trying to skew the numbers. Kudos for choosing northern Ontario though. However I couldve skewed the numbers even further, add more kids under 6, with disabilities, long term disability benefits for both parents (why not), capital gain / dividend income from an inheritance.
Stop reading the FP. It’s just click bait , not serious news. Dont feed the beast. Where to get the money? They can start with 3 billion per year offshore for individuals and many, many more B for the corps . I have a feeling Bahama/Chateau Bill won’t do much…. It’s an enigma why he won’t..
The problem in this country is not taxes but the wasteful spending of our government especially with the outrageously overpaid and bloated civil servants. On average they receive approx. 30% more than equivalent private sector employees on top of unbelievable benefits and pensions. Successive governments have pandered to this group of voters and have created a giant expensive mess. Civil servants are the new elites and in reality are some of the top earners in Canada. I have to save well over a $1,000,000 to not even come close to their pensions. The need for increased taxes is because of insane spending. Why don’t we instead talk about why we need all those taxes??? As a businessman I can’t just go to my customers and demand more and more price increases because I am foolish with my out of control spending. I have to live within my means.
The amounts that I could pay in taxes ($2000 to $3000 per month) would boggle the minds of many of those 40% that pay minimal income taxes. With deductions, I can get that down to about $1750 per month.
My question then to the 40% who pay minimal taxes: Is my contribution ($21 000 per year) enough?
Of course, a lot of those 40% of Canadians who pay minimal net income tax today are retirees that paid taxes throughout their working lives.
I file tax returns for my parents, now in their 80s, so I know that they haven’t paid income taxes in years – because they haven’t had sufficient income.
How you can write this entire thing without mentioning income inequality is beyond me. It’s insane to think you can have a conversation about income tax differences without talking about income.
Wait no I get it. You don’t actually care about informing anyone, you’re just towing an ideological lines.
This dude covered it for years.
Then he capitulated.
You are not alone people. Me and my 3 amigos got your back. Q is us.
https://youtu.be/6Je3vlCAltI
#107 PastThePeak
What you are saying is that high productivity people shouldn’t work so hard. And that is exactly what milking the rich sends as a message. But the question is, if high productivity people stand down and don’t work so hard because there is nothing in it for them, where does the advancement come from. If we tax the innovators to the point where they would be as well off as a barista, what happens when they decide it’s easier to be a barista? Even socialist USSR knew this, and their scientists at least got cars.
Taxing the rich is the same as disincentivizing the productive. That’s why in the jungle the hunters always ate their fill before bringing the remains back to camp.
Heather Hallam on 02.10.19 at 5:44 pm
A government can take it back if they want to or tax it. I am retired and there isn’t a dime of my income that isn’t taxed and that includes OAS. And I am no where near being a 1%er. I am sick and tired of a select group getting tax-free money and that rest of us have to pay for it.
Heather, OAS comes from general revenue -i.e. other peoples taxes – you’re welcome.
As a 1%er I’m getting tired of paying more than my fair share so it’s time to retire. What’s the point in working hard if the government, at all levels, just keeps wanting more. This once great country was built on the backs of hardworking Canadians. Now if you work hard and are successful you re the bad guy.
Canada has become the land of the entitled, the less you earn, the higher your expectations. No wonder dimwits like Trudeau and Horgan are elected. They make promises they can’t keep because they know someone else is paying.
Send help.
I have an idea put the government through a stress test…pfft
Being in the top tax bracket is tough in Canada – it really doesn’t feel right to have marginal rates over 50% which to me should just be a pyschological cap when more of your dollar earned is going to tax than it is to you.
In the UK the top brackets are sub-50% which I am happy with. Globally you can see a push to lower corporate income tax and replace that with indirect taxes like VAT (which hits consumers) and personal tax (ditto). I guess if you make it business friendly then you can let the rest sort itself out. Hard to tax anyone if there are no jobs or profits.
#57 Heather Hallam. ” I’m a senior and every cent I make is taxed (or words to that effect)”
How wrong you are, sister. Seniors get the biggest free ride in Canadian society. Your personal exemption rose from just under 12 grand to 19 grand the day you retired. How about your medical benefits? Isn’t there also a working tax credit for seniors as well? Indexing on your pensions far exceeds what those who are still working receive on their salaries.
Your lower taxable income likely qualifies you for more government handouts like carbon tax and GST/HST credits. Most provinces also have subsidized housing and many establishments offer “senior’s” discounts (reduced consumption taxes) You can also defer your property taxes if you wish to.
I find seniors to be the whiniest and greediest segment of North American society which is why it’s so easy to bilk them out of their life savings. We all grow up hearing that “if something seems too good to be true, it is”. Yet, oddly, this message seems be be lost once people find themselves close to or in retirement. A certain segment goes for the financial “hail Mary pass” and the vultures swoop in and grab their nest egg. Then we endure the whinging of these sad sacs on the evening news human interest stories and in McLean’s magazine.
I’m a little more than a decade out from those golden years and I pray that amnesia doesn’t set in, causing me to forget how little I pay when compared to the young people who don’t have the benefit of high wages and cheap housing that our generations enjoyed.
#106 Figure it Out – I have 3 kids, and so do 9 other families on my little crescent. Don’t get a direct dime from Truddie.
Also, the blogger that couldn’t believe people work 72-84hrs a week? Must be a govt employee. Before kids, I did that more than I didn’t. Yeah genius, it’s 7-12s.
haha great post and some hard truth.. May as well spend your $$$ and have some fun.
People are talking lots about section 8 housing food stamps (usa) Here in Canada we have generations on social assistance. Doesn’t pay to work, when you can get just as much for free.
“Only fools and mules work everyday” an old american saying.
#2 Doomsday prepper on 02.10.19 at 1:39 pm
Seems to me that most good tax breaks are geared to married people.
I usually work 70+ hours per week to take in about 4k gross. Net: about 1800
Last year I paid over 45k in fed income tax!
Really difficult to get ahead these days. Sigh. Back to work now
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What a lie. On 4k per week, after CPP, EI and taxes you’d get 2500 per week. If you worked all 52 weeks.
Very much considering a move to Calgary. Difference in the top tax rate would save me at least 25k per year, lower sales tax and home prices are about half. Plus mountains a couple of hours away.
If it wasn’t Canada’s Alabama, I’d be there already.
#121 Barb
#83 Millennial Realist on 02.10.19 at 7:51 pm
“…They (boomers) always did know how to whine and complain to get their way, and this will be their main subject for the next decade or more.”
————————————————————–
Abject nonsense.
Boomers NEVER asked/demanded anything of the government, we developed our skills, worked, saved and contributed to our communities by being decent and law-abiding citizens.
————————————————————-
Translation:
Boomers were born on third base, and have convinced themselves they hit a triple.
Boomers entered the workforce in the 1960s and 1970s, as the Greatest Generation was retiring with an expanding economy, thanks to their heroic efforts during and since WWII.
For a Boomer in the 1970s, if you had a pulse, you were “management material”. Just knocking on a few doors would land you a job good enough to pay for an average house. The ladder of upward mobility was tilted down to catch your self-indulgent stumbles, in an economy desperate for bodies.
As for millennials not coaching kids in sports, if true that would be because they are having fewer and fewer
kids, can’t afford to have more and starting families much later due to lack of stable employment. The Boomers also created TFW programs to drive down wages. Then they ramped up immigration to fill crappy low wage jobs they bragged they have created, marginalizing millennials further.
(Ironically, it is now mostly a section of racist older Boomers who support Trump and Bernier on their anti-immigration stance, the very programs you Boomers supported to cement your own wealth.)
There are many decent Boomers, in my own family as well. Most I know do understand the incredible advantages they have inherited, but not passed down the line. They realize they are leaving behind a nation in tatters, with income gap extremes like never before.
(I’d love to formally study this stuff more, but alas, the MBA that cost a Boomer under $2000 in 1975 would cost me $80,000 today, so that’s out of reach. Thanks to Boomers cutting support for and partially privatizing our education systems so they could get more tax cuts)
Oh, and you said Boomers were all …”decent and law abiding citizens”…?
Check crime demographics. The Boomer crime and murder rates were the worst in recorded history. Facts first.
But, a change is coming. By the early 2020s, Millennials will be fully in charge. You Boomers, through your lack of unselfish foresight, have left us no choice but to prepare to massively tax private wealth and inheritances, to save our planet and to save our society.
Be part of the change, Boomers.
Or be run over by it.
The bottom 40% don’t pay income tax… Well then here is some current events. The last three years I have made less than $26,000 year… how much of that went to rent… $15,000… did I pay tax… yes I paid tax on that… a little trillium came back a few hundred… Did I pay tax at the pump… on threads and everything else… Our Prime Minister says then I don’t pay take?
#37 PastThePeak
My plan is to head into early semi-retirement and draw down my savings in the most tax efficient manner. Within 5 years, the amount of tax I pay will be decreasing substantially.
——————————————————————–
Well said, brother.
Time to check out of the futile rat race and start having some ME TIME.
The longer you stay in the game, the sooner your hard earned wealth will be confiscated by the evil regime.
Like Garth says: “Higher taxes. Big deficits. Entitled voters. Oh, boy.”
Seriously, Ain’t Nobody Got Time for That!
https://www.youtube.com/watch?v=bFEoMO0pc7k
Tax. Is. Theft.
Only tangentially related to the post but below is a little snippet I saved for some reason. A bit dated but you can trust me on this, it still holds true.
The OECD analyzes the tax burdens of 35 countries, including the United States and Canada. According to its data, in terms of total tax revenue as a percentage of GDP, in 2010, the U.S. collected a slightly lower than average amount of taxes from its citizens ($11,365 USD per capita). Canada collected a slightly higher than average amount ($14,693 USD).
…
At times, for example, in 2000 and again in 2014, Canada and the U.S. swapped places. The U.S. paid a slightly higher than average amount and Canada paid a slightly lower than average amount. For the most part, however, both countries hover around the OECD average.
I’m not sure why all the brouhaha in the comments about a taxation level most of you will never pay. Snort.
@118 T-Rev
Hope you get time to read this.
It sounds like you have done enough heavy lifting.
When I was your age, my family circumstances changed, and I took the advice given to me by a mentor 20 years earlier “buy the smallest house on the best street”.
Run with your personal business. Work for yourself, not for others.
Anyway, that’s what I did. I simplified life. My partner and I are semi-retired, and enjoy life. Every day is a gift.
With my newish personal business, I can work when I want to work, and the pay would more than pay the bills, as our expenses are low. (actually, my income is immaterial… it all gets banked) So, this is the voice of experience – maybe you can think of me as “you” in 22 years from now.
Will you have enough to live off of? That was a worry of ours, so for the last few years, we kept in great detail our income, and expenses. Dollar wise, we have way more than enough, it turns out. A big house and continuous world-travel doth not make for long-lasting happiness.
You might be in the same $$ boat, just a decade or two younger than I was. Enjoy life. Get a family dog, if you are so inclined. There are only so many sunrises, and the best ones are in your backyard at home surrounded by the love and happiness of those close to you.
Here is the chance for all to speak up and maybe change something about the housing craziness:
https://www.theglobeandmail.com/real-estate/the-market/article-ontario-looks-to-level-the-playing-field-between-home-buyers-and/
#53 AB Boxster on 02.10.19 at 5:17 pm
Canada once had great potential.
++++++++++++++++++++++++++++++++
Yep.
“How does the country function when 40% hand over no tax and we pay people to have children?”
It functions on borrowed time until the collapse.
Consumption taxes are progressive taxes. And, yes, wealthy people spend more. Good for the economy. – Garth
————————-
Sorry Garth, you have this one completely backwards. Consumption taxes are regressive, because poor people spend a larger portion of their income than rich people. People living paycheque to paycheque pretty much spend 100% of their earnings on the necessities, while people making 6 figures are able to actually SAVE money, since they have so much left over after paying the bills.
Furthermore, the wealthy only spend more because they HAVE more, the actual percentage of their income that they spend, is, as I said, much lower.
Who will spend more? 1 person with a billion dollars, or 20,000 people with $50,000? The answer is obvious.
The GST credit compensates. Over time taxing consumption rather than income is progressive move, as capital is freed to create more economic activity. – Garth
Trump puts China in a headlock. Refuses to meet Xie. USA USA USA !!! UK shows how real allies work. Trudeau is sleeping in a wet diaper.
https://www.cnbc.com/2019/02/11/uk-to-send-new-aircraft-carrier-loaded-with-f35-jets-into-south-china-sea.html
“How much tax is too much? How much is too little? What’s fair?”
10% and hang all governments that borrow or debase the currency.
I am one of those one per centers. I have 3 kids and a stay at home wife and get punished richly for it by Justin and Morneau. No child credit or benefits for me.
During the Harper years I wasn’t exactly pleased to pay as much tax as I was, but I could live with it.
Fortunately, I am a self-employed professional. Last year my partners and I finally got tired of paying the 53% marginal tax. We incorporated ourselves and created a new corporate structure with family investment companies. The net result will be a significant drop in the income tax I will be paying. This is all legal.
Had my taxes not shot up, I wouldn’t have bothered with the hassle of setting up the new corporate structure to save on tax. Now that it’s up and running, I won’t be going back.
So that’s the lesson to the Liberals: overtax the 1%’ers and most will find ways to restructure their businesses to save on tax. The net result will be less tax revenue.
I doubt very much anyone in Justin’s inner cabinet or team studied economics, but they should google the Laffer Curve.
The Boomer vs Millennial discussion is so lame. Sure my Dad, a boomer had an easy time getting a decent job. But he never had the opps I have had – the upside today is significantly better. Work remote, affordable travel, flex hours, productivity through technology – i can work a full day on a fishing boat.
So ya if you have small dreams then the 50s were the time for sure. Job with the gov or at the plant, a 1200 sqft bungalow, little mobility lots of security. Doesn’t sound that great to me.
Say no to threads. Each day is already a thread. No need to further subdivide. Threads will have unintended consequences such as longer mediation time. Meye2cents.
#127 Ron on 02.11.19 at 1:26 am
I agree. Right on!
That is the main difference between Canada and US.
In Canada the elite works for the government. In US the elite works for the private sector.
So in reality the Canadian 1%’rs are inbred.
Anything to comment on that Garth?
No. Too stupid. – Garth
#148 Incubus on 02.11.19 at 9:27 am
“How does the country function when 40% hand over no tax and we pay people to have children?”
It functions on borrowed time until the collapse.
——————————————————-
Read a bit more – income tax is not the only tax…
Government revenues: income tax, 50%; corporate tax, 15%; GST, 12%. – Garth
#151 Overtaxed on 02.11.19 at 10:01 am
I am one of those one per centers. I have 3 kids and a stay at home wife and get punished richly for it by Justin and Morneau. No child credit or benefits for me.
During the Harper years I wasn’t exactly pleased to pay as much tax as I was, but I could live with it.
Fortunately, I am a self-employed professional. Last year my partners and I finally got tired of paying the 53% marginal tax. We incorporated ourselves and created a new corporate structure with family investment companies. The net result will be a significant drop in the income tax I will be paying. This is all legal.
Had my taxes not shot up, I wouldn’t have bothered with the hassle of setting up the new corporate structure to save on tax. Now that it’s up and running, I won’t be going back.
So that’s the lesson to the Liberals: overtax the 1%’ers and most will find ways to restructure their businesses to save on tax. The net result will be less tax revenue.
I doubt very much anyone in Justin’s inner cabinet or team studied economics, but they should google the Laffer Curve.
____
T2 and Co. probably think the Laffer curve theory is one of those Conservative think tank myths.
I watch it happen every day – and in fact, I MAKE it happen every day.
I don’t make anywhere near as much as you, but I still want to reduce my tax remittances. Not so much because I think I am taxed to death – but because I feel the modest taxes I do give are squandered on absolutely cement headed garbage at all levels of government.
I feel this will be a permanent change for me. Canadian governments won’t smarten up until Canadians insist on it – that could be a very, very long time.
Have you ever visited Calgary? Alabama’s a little harsh.
——————————————————
#140 Tater on 02.11.19 at 7:52 am
If it wasn’t Canada’s Alabama, I’d be there already.
#131 Nonplused on 02.11.19 at 3:16 am
#107 PastThePeak
What you are saying is that high productivity people shouldn’t work so hard. And that is exactly what milking the rich sends as a message. But the question is, if high productivity people stand down and don’t work so hard because there is nothing in it for them, where does the advancement come from.
___
It’ll come from other countries. Those countries being the ones where the rich folks fled.
Just ask France, they pounded the top end of income earners so badly that hoards of them decided to just leave. France lost more millionaires that year than any other country on the planet. Before long they had to repeal the higher tax as it was actually reducing revenues at the end of the day.
One more time for government: “Don’t bite the hand that feeds…”
#152 Overtaxed on 02.11.19 at 10:01 am
…
Had my taxes not shot up, I wouldn’t have bothered with the hassle of setting up the new corporate structure to save on tax. Now that it’s up and running, I won’t be going back.
So that’s the lesson to the Liberals: overtax the 1%’ers and most will find ways to restructure their businesses to save on tax. The net result will be less tax revenue.
++++++++++++++++++++++++++++++++++
Yep, pretty much the same. Part was the increase in taxes, and partly timing. I started up a small farm business on the side, as this is what I will transition into in semi-retirement (it is a real business meant to make money though). Allows me to invest in this business and grow it now, where the expenses are offset against my income.
The overall tax and spend nature of this gov’t is what prompted me to do this. So as you note, the result is less tax from me right now, and a lot less tax from me in a few years.
#153 Mattl on 02.11.19 at 10:03 am
The Boomer vs Millennial discussion is so lame. Sure my Dad, a boomer had an easy time getting a decent job. But he never had the opps I have had – the upside today is significantly better. Work remote, affordable travel, flex hours, productivity through technology – i can work a full day on a fishing boat.
+++++++++++++++++++++++++++++++++
This is a key point overlooked by the younger crowd when complaining about the boomers (or us Gen X). While some aspects of life are harder for those in 20s/early 30s (housing in BC and GTA – other markets are not an issue), other parts are much better.
In work, as Mattl points out, there is more flexibility, work-life balance, more job types, self-employment options, etc.
On the personal side, there has never been more options for entertainment, travel is cheaper, Uber reducing need to own a car, much cheaper electronics, Internet making many things almost free. Health care is much better than 30 years ago.
Much of the worlds knowledge is only a few key strokes away (although, sadly, few utilize this option).
Life in many ways is so much better, but all we hear on this blog is the envy, driven by a victim mentality. It is really this latter part that is the root of the West’s malaise.
And on a lighter note –
Hey Boomers!
The Rolling Stones are coming to Ontario this summer!
Woohoo!!!
This year is special – the combined ages of the Stones in 2019 will pass 300 YEARS!
It’s a Paleo Party!!!!
Bring your doobies and diapers and rock on!!
https://www.ctvnews.ca/entertainment/the-rolling-stones-to-play-only-canadian-tour-stop-on-canada-day-weekend-1.4291408
Obviously, the CCB increases under T2 is primarily to benefit single mothers. The side affect is some two income married couples cash in huge when they absolutely don’t need it.
Ms. IH and I net a little over 100K after taxes, and we get a little over 300.00/mo CCB. It’s “beer and popcorn” money, but I’ll gladly take it.
T2 can’t really come out say he wants to give all single Canadian moms thousands worth of taxpayer dollars per month, as the young hardworking domestic and immigrant family units would balk big time and not vote Lib.
So titanic CCB payments for “low income” parents will remain.
I’ll miss all the free beer when it starts to go away over the next couple years…
#160 IHCTD9 on 02.11.19 at 11:11 am
It’ll come from other countries. Those countries being the ones where the rich folks fled.
Just ask France, they pounded the top end of income earners so badly that hoards of them decided to just leave. France lost more millionaires that year than any other country on the planet. Before long they had to repeal the higher tax as it was actually reducing revenues at the end of the day.
One more time for government: “Don’t bite the hand that feeds…”
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I should also add – once those rich folks are gone, they’re gone for good.
You think they’re planning on moving back after all that trouble just because they removed the tax?
Not a chance in hell that is going to happen. That would be like moving back in with your adulterous ex-wife right after you finalized your divorce proceedings.
Do not forget your property taxes too, and for you that didn’t sell those tax free dollars count your losses by not renting. Today was fire monitoring time, and my property manager entered to allow the men entrance, and said what the hell its cold in here – no heat? No heat all winter, but will survive with my Honeywell and a jacket. The problem was fixed immediately because a heat motor had to be replaced, and should have called. I hate to complain, but they will do anything for a tenant, and renting in a good building can indeed be a good option.
We are not recruiting. It is ‘Alabama’ and you would hate it, so please stay far, far, far away.
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#140 Tater on 02.11.19 at 7:52 am
If it wasn’t Canada’s Alabama, I’d be there already.
The GST credit compensates. Over time taxing consumption rather than income is progressive move, as capital is freed to create more economic activity. – Garth
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I’d be ok with a increased sales tax if it could be guaranteed the poor would be compensated out of it. The GST credit doesn’t do squat for the middle class though. As it stands, anyone who purchases over $475 of taxable goods per month loses out, and that’s assuming the MAXIMUM benefit.
Politicians and their think tanks have no idea of what “middle class” even is, mostly because very few of them were ever part of it. Like that Fraser Institute study, for instance. $60,000 family income per year isn’t middle class, that’s 2 minimum wage workers in Markham. And couples rarely qualify for the tax credit anyway because their incomes are combined.
“More capital being freed to create more economic activity” is a pretty fancy statement, but the proper question here is WHOSE capital? The capital that I want freed is the capital of poor and middle class Canadians who are going to spend it. And to do that, they need MORE capital, and tax cuts aren’t enough.
Even if the poor and middle class paid ZERO taxes (and still collected the same credits/services), it still wouldn’t come close to offsetting the systematic erosion of the compensation of labor in the last few decades by the rich and the private sector. The government is nobly, but naively trying to rebalance the scales by bridging the Pay-Productivity Gap with public money.
Giving rich people and corporations more money has never, ever worked. Ever. Ever. Ever. Trickle down economics is a farce. We all know it, and we’re not falling for it again.
Welcome to HiRise condo living.
https://www.cbc.ca/news/canada/toronto/condo-toronto-cigarette-butts-balconies-roof-1.5007221
https://www.cbc.ca/news/canada/toronto/video-chair-thrown-1.5014019
The GST credit compensates. Over time taxing consumption rather than income is progressive move, as capital is freed to create more economic activity. – Garth
……….
Oh no, not the ever popular “trickle down effect” argument that has shown to be highly questionable:
https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572
“Trickle-down economics says that the Reagan and Bush tax cuts should have helped people at all income levels. Instead, the opposite occurred. Income inequality worsened. Between 1979 and 2005, after-tax household income rose 6 percent for the bottom fifth. That sounds great until you see what happened for the top fifth. Their income increased by 80 percent. The top 1 percent saw their income triple. Instead of trickling down, it appears that prosperity trickled up. ”
And, since then, taxes have risen and governments have been far more involved in income redistribution. As a result, the wealth divide has grown to historic proportions. – Garth
Garth et al:
Communism
….isn’t that where if you have something, they take what you got and give it to someone who doesn’t have what you got….and you are supposed to smile and say isn’t this great…I just lost all my stuff. And then the guy who has nothing just laughs and says, wow, I just got all that guys stuff and didn’t have to do anything.
They will take everything you own.
Yep. That is what is coming. You will not be able to own anything, because you will be always rich compared to the guy who has nothing. Then they (the communist government) will take everything you have….and you will be made to like or sent to prison or work camp or whatever they will call it.
Communism takes everything you have ever worked for and gives it to people who have nothing….and you are screwed for property, money, everything.
Keep electing these communists, because that it what it is. The definition of “rich”…is a guy with something compared to a guy with nothing. They will redefine the term rich until Communism is fully in place and you have nothing, like everyone else. Talk to anyone who escaped Communism….it totally sucks, because there is no freedom.
Freedom will be gone soon….totally gone.
These loosers who propose these methods, find it easier to propose a new tax, instead of diving deep into the government and cutting the useless programs that suck money from the country.
Go after government and remove bodies there. Shrink it back to the size they had back in the 1950’s or 1960’s. Look at departments added since them….see what is necessary and eliminate all the crap. I bet they could remove 15% of the government people and still do the job.
Do you read about government trying to streamline. Hold country wide meeting to find ways to cut government waste. Have they asked Canadians where they could cut….nope. Do you know why….that is real work. And you have to be intelligent to do this type of work.
More taxes is not the answer…..Cut the government waste. Period. End of story.
p.s. Start with cutting the Senator’s…they don’t do anything.
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#136: 1st – I don’t know about any working tax credit for seniors. 2nd – And what about medical benefits? 3rd – I don’t get any indexing on my pension from work. 4th – I don’t get any subsidized housing. 5th – I don’t get any discounts on consumption taxes. 6th – And you can’t defer your property taxes just because you feel like it. I can’t defer mine. 7th – I find gen x’s and millennials whiny, greedy and think the world revolves around them. 8th – Not all baby boomers had high wages. And they paid high income taxes in the late 70’s and early 80’s. You need to get your facts straight.
Thats right. Next stop is central bank digital currency. Say bye bye to the last shred of privacy rich people. Say bye bye to fractional reserve banking private banks. Say hello to unprecedented national security national welfare funding. Say hello to unprecedented wealth and income equality. Whatever the 1% pay it’s not enough. Our tax net will have 100% coverage with a CBDC.
I know a family who has three young children; both parents stay at home; they do some stuff for cash here and there. Obviously they pay no taxes but benefit heavily from all the tax breaks and allowances they get. They are a BIG supporter of Trudeau’s giving-away-billions-to-everyone. Had a big argument with them regarding Canada bringing in all these refugees here and the Canadian taxpayers footing all those bills; obviously they care about Canada helping the world; it’s not their money; they don’t work; they wouldn’t understand. Funny enough, they are both heavily educated.
#103 crowdedelevatorfartz on 02.10.19 at 9:03 pm
Garth.
Whats your opinion on a Flat Tax for both business and indivduals?
Say 15% across the board?
No deductions, no flim flam.
Everyone pays 15%.
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And make lazy people finally pay taxes and contribute to the services they are draining?
APPROVED!