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Author Topic: Canada's high income earners are not overtaxed
Michelle
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posted 18 October 2005 08:57 AM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Despite recent reports to the contrary, Canada's high-income earners do not pay a disproportionately large share of personal income tax. A new analysis by Prof. Neil Brooks of Osgoode Hall Law School takes a closer look at the numbers in Statistics Canada's “Tax Incidence in Canada.” The Stats Can report sparked a series of news stories this spring claiming the top 10 per cent of income earners pay 52 per cent of the total tax bill but Brooks finds these figures both misleading and incomplete in assessing the fairness of the tax system.

Canadian Centre for Policy Alternatives


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
Yilmaz
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posted 26 October 2005 11:24 PM      Profile for Yilmaz     Send New Private Message      Edit/Delete Post
Lower and Middle class Canadians are paying too much tax.

How about putting pressure on government to reduce the taxes of Lower and Middle income earners as a way to force the government to tax high income earner more to make up the shortfall?


From: Toronto | Registered: Jun 2005  |  IP: Logged
retread
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posted 27 October 2005 01:13 AM      Profile for retread     Send New Private Message      Edit/Delete Post
Most likely they'd just end up cutting back on services rather than raising high end taxes.
From: flatlands | Registered: Jul 2005  |  IP: Logged
Sven
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posted 27 October 2005 01:56 AM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Yilmaz:
Lower and Middle class Canadians are paying too much tax.

How about putting pressure on government to reduce the taxes of Lower and Middle income earners as a way to force the government to tax high income earner more to make up the shortfall?


What's laughable is that "all those earning more than $64,500 were considered to be in this highest category". $64,500 isn't middle class??? In US$, that's about $50,000 (and higher paid school teachers earn that).


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
the grey
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posted 27 October 2005 09:09 AM      Profile for the grey     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Sven:

What's laughable is that "all those earning more than $64,500 were considered to be in this highest category". $64,500 isn't middle class??? In US$, that's about $50,000 (and higher paid school teachers earn that).


Have you stopped to think about how few people are actually in that category of individual income earners?


From: London, Ontario | Registered: Jan 2003  |  IP: Logged
Lard Tunderin' Jeezus
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posted 27 October 2005 10:14 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by the grey:

Have you stopped to think about how few people are actually in that category of individual income earners?


Particularly today, as the middle class declines. Is that your point, or are you in favour of attacking this endangered species?

From: ... | Registered: Aug 2001  |  IP: Logged
Publius
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posted 27 October 2005 10:44 AM      Profile for Publius     Send New Private Message      Edit/Delete Post
quote:
Originally posted by the grey:

Have you stopped to think about how few people are actually in that category of individual income earners?


Really, it's not very much at all. Someone making $64,000 is hardly living it up, living in a mansion, driving a Rolls Royce and eating caviar all day. Interestingly, in Canada, the highest marginal tax rate kicks in at around $80,000 a year. In the U.S., it doesn't kick in (and it's a much lower percentage) until you're making $250,000 per year.


From: Toronto | Registered: Apr 2005  |  IP: Logged
Mr. Magoo
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posted 27 October 2005 10:51 AM      Profile for Mr. Magoo   Author's Homepage     Send New Private Message      Edit/Delete Post
I live in an old frame house, I walk or take transit, and I might just treat myself to some noodles for lunch.

If I'm the upper class, where are my mad, mad perks?


From: ø¤°`°¤ø,¸_¸,ø¤°`°¤ø,¸_¸,ø¤°°¤ø,¸_¸,ø¤°°¤ø, | Registered: Dec 2002  |  IP: Logged
Crippled_Newsie
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posted 27 October 2005 11:12 AM      Profile for Crippled_Newsie     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Mr. Magoo:
I live in an old frame house, I walk or take transit, and I might just treat myself to some noodles for lunch.

If I'm the upper class, where are my mad, mad perks?


You're obviously not mortgaged to the eyeballs. Shame on you for that. How do you expect to keep up with the Joneses?

[ 27 October 2005: Message edited by: Tape_342 ]


From: It's all about the thumpa thumpa. | Registered: Oct 2004  |  IP: Logged
Sven
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posted 27 October 2005 11:17 AM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by the grey:
Have you stopped to think about how few people are actually in that category of individual income earners?

Is it ten percent of the population?

Seriously, someone making $64,000 probably takes home about $900 per week. A person with that income and a house mortgage, car payments, food and etc., etc. is not “living large”.

When I think of someone who is “rich” or “well off”, I think of someone who doesn’t have to work and yet can live very comfortably (travel, never worry about bills, etc.). If a guy making $64,000 loses his job, he’ll be living in a tent.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
the grey
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posted 27 October 2005 11:24 AM      Profile for the grey     Send New Private Message      Edit/Delete Post
Wealth isn't just about "living it up" - it's also about the whole host of things that you just don't have to worry about.

$64,500 is a lot of money, to a lot of people. My parents, both well educated with graduate degrees, never had a combined income of even half that amount - yet they've managed to buy a house and save enough to retire in their late-50s. Certainly not the lap of luxury by Canadian standards, but well off compared to a heck of a lot of people, especially if you look beyond the highly developed countries of the world.

The highest marginal rate in Canada kicks in just over $100,000 (not $80,000), and there is a big difference between someone earning $64,500 and someone earning $100,000, or $200,000, or $1,000,000.

But that doesn't change the fact that $64,500 is a damn good income, that a large majority of Canadians will never come close to achieving. As the linked article above indicates, it only represents a tenth of tax filers -- and an even smaller proportion of the population if you include those whose incomes are so low that they don't file returns.


From: London, Ontario | Registered: Jan 2003  |  IP: Logged
retread
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posted 27 October 2005 11:25 AM      Profile for retread     Send New Private Message      Edit/Delete Post
Hm, senior teachers make $60,000 in many provinces. Time to tax those fat cats ...

The median income in Canada is about $45,000 if I recall correctly. Of the extra $20,000 to get you to $65,000, about $8,000 will go to taxes. If $12,000 take home pay is now the difference between middle class and rich then we've achieved a level of income parity beyond anything we could have dreamed of in the past


From: flatlands | Registered: Jul 2005  |  IP: Logged
Sven
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posted 27 October 2005 11:43 AM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by the grey:
$64,500 is a lot of money, to a lot of people.

Right. And, $10,000 is a lot of money to most people in the world (e.g., Cuba: $1,200 per year in per cap income).


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
No Yards
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posted 27 October 2005 11:46 AM      Profile for No Yards   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Publius:

Really, it's not very much at all. Someone making $64,000 is hardly living it up, living in a mansion, driving a Rolls Royce and eating caviar all day. Interestingly, in Canada, the highest marginal tax rate kicks in at around $80,000 a year. In the U.S., it doesn't kick in (and it's a much lower percentage) until you're making $250,000 per year.


According to wikipedia that's not really accurate. Canada and the USA have differing graduated tax rates, which are not directly comparable, but if we are just talking about "highest marginal rates", then Canada's is 29% and the USA's is 35%. The USA's kicks in at a higher salary than Canada's but in order to say one is better or worst than the other we need to talk about a lot more than simply "highest marginal rates".


From: Defending traditional marriage since June 28, 2005 | Registered: Jun 2003  |  IP: Logged
Boom Boom
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posted 27 October 2005 11:50 AM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
I think there's a question of perspective that needs to be considered. Yes, to those at a lower income level, $64k is an enormous sum of money, and certainly, to many around the world, is something only to be imagined in their wildest dreams. But if you live in a Canadian or American city and want to negotiate a mortgage on a nice home, it simply isn't sufficient income to allow one's family the payment of daily expenses _and_ the down payment and everything else connected with home ownership. Here on the coast, an income of $64k is sufficent to allow a mortgage on the rather small houses with a distinct lack of community services, but not, I would submit, in Ottawa, Toronto, Montreal, or Vancouver, and probably not in many other Canadian cities.
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
ex-hippy
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posted 27 October 2005 12:00 PM      Profile for ex-hippy        Edit/Delete Post
When comparing marginal tax rates (US vs Canada)it is very important to include provincial and state income taxes. e.g. in Illinois state tax is 3% of income. In Ontario ? cannot remember. But if you compare a Chicagoan to an Ontarian then the marginal rate in Ontario , I beleive, is somewhat higher. Mayhaps someone here knows
From: ontario | Registered: Oct 2005  |  IP: Logged
brebis noire
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posted 27 October 2005 12:05 PM      Profile for brebis noire     Send New Private Message      Edit/Delete Post
IANAE (where's Stephen Gordon when you need him?) but from my enlightening experience with an agricultural accountant, it's pretty easy to come to the conclusion that the very structure of tax laws favour the very rich, and the devil is literally in the details.

Our taxes on revenue are pretty high and they eat away at the middle class - I don't mind paying higher taxes if I know I'm contributing to government and society in a good way. But what about taxes on investments? Since I don't have any to speak of, and since it's the very wealthiest who seem able to live off their investments without even having to worry that much about revenues, I don't understand much about that kind of taxation - but I get the feeling that this is where the very rich are getting a free ride.


From: Quebec | Registered: Oct 2004  |  IP: Logged
neo
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posted 27 October 2005 12:07 PM      Profile for neo        Edit/Delete Post
quote:
Originally posted by ex-hippy:
When comparing marginal tax rates (US vs Canada)it is very important to include provincial and state income taxes. e.g. in Illinois state tax is 3% of income. In Ontario ? cannot remember. But if you compare a Chicagoan to an Ontarian then the marginal rate in Ontario , I beleive, is somewhat higher. Mayhaps someone here knows

In Ontario the highest marginal tax rate is close to 50% and it does kick in at much lower income levels than in the US.

Another big difference is that in Canada, single income families are punished as compared to dual income families. (I.e. cmp single earner making $70k vs dual earners making $35k + $35k.)


From: does it matter | Registered: Oct 2005  |  IP: Logged
Hinterland
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posted 27 October 2005 12:09 PM      Profile for Hinterland        Edit/Delete Post
Source?
From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
Reality. Bites.
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posted 27 October 2005 12:10 PM      Profile for Reality. Bites.        Edit/Delete Post
quote:
Originally posted by Hinterland:
Source?

I'd like to help, but I don't have a link to Neo's ass.


From: Gone for good | Registered: Aug 2004  |  IP: Logged
Hinterland
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posted 27 October 2005 12:12 PM      Profile for Hinterland        Edit/Delete Post
quote:
Right. And, $10,000 is a lot of money to most people in the world (e.g., Cuba: $1,200 per year in per cap income).

Sven, as I noted in another thread, this is not a valid figure of Cuba's per capita income for comparison's sake. You might stop bandying it around as you are, since it's kind of meaningless.

[ 27 October 2005: Message edited by: Hinterland ]


From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
Hinterland
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posted 27 October 2005 12:15 PM      Profile for Hinterland        Edit/Delete Post
quote:
I'd like to help, but I don't have a link to Neo's ass.

You ever notice how right-wingers always start yelling "Source!?" on the most insignificant opinion expressed as being somewhat factually-based, but when they come out with hard data to support what they're saying, they're never so forthcoming?

It's like pulling teeth, sometimes...

[ 27 October 2005: Message edited by: Hinterland ]


From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
scooter
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posted 27 October 2005 12:42 PM      Profile for scooter     Send New Private Message      Edit/Delete Post
quote:
Originally posted by retread:
Hm, senior teachers make $60,000 in many provinces. Time to tax those fat cats ...

Don't forget all those CWA workers building cars.

From: High River | Registered: Apr 2004  |  IP: Logged
No Yards
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posted 27 October 2005 01:04 PM      Profile for No Yards   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by ex-hippy:
When comparing marginal tax rates (US vs Canada)it is very important to include provincial and state income taxes. e.g. in Illinois state tax is 3% of income. In Ontario ? cannot remember. But if you compare a Chicagoan to an Ontarian then the marginal rate in Ontario , I beleive, is somewhat higher. Mayhaps someone here knows

Again, blanket statements mean very little ... comparing tax rates for what level of income? It might be true that at $40K someone in Chicago has a smaller tax rate, but it may not be true for someone making $250K

Then you have to consider what you get for your larger or smaller tax rate. Is it better for you to be paying $X in taxes for public healthcare vs not paying $X in taxes and paying $X * 2 for private heath insurance? Paying tolls vs taxes for your highways?


From: Defending traditional marriage since June 28, 2005 | Registered: Jun 2003  |  IP: Logged
Sven
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posted 27 October 2005 01:13 PM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Hinterland:

You ever notice how right-wingers always start yelling "Source!?" on the most insignificant opinion expressed as being somewhat factually-based, but when they come out with hard data to support what they're saying, they're never so forthcoming?

It's like pulling teeth, sometimes...

[ 27 October 2005: Message edited by: Hinterland ]


…but not always, right? I tried to do my homework on the infant mortality rates in Cuba v. USA by looking at the UN Statistics Department website and providing that link. Fidel (kindly) redirected me to the UNICEF site for more up-to-date stats. I like good data and if I’m unsure about a specific number, I’m not going to assert it as being gospel unless I’ve got back up.

With regard to the $1,200 per capita income figure for Cuba (reported by UNICEF) and the $3,000 per capita income figure for Cuba (reported by the CIA), I guess babblers decide for themselves whether one source is more credible than the other. But, I don’t think that you can definitely and incontrovertibly say, “Sven, as I noted in another thread, this is not a valid figure of Cuba's per capita income for comparison's sake. You might stop bandying it around as you are, since it's kind of meaningless.”


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
ex-hippy
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posted 27 October 2005 01:14 PM      Profile for ex-hippy        Edit/Delete Post
I was not making a blanket ststement. I was wondering about the marginal rates which we could then apply to various income levels. There are probably studies from both ends of the Left-Right spectrum which show one system (take your pick) is superior to the other. For example in the US there are lots of deductions from income which do not exist in Canada. OTOH there is OHIP etc in Ontario. OTOH there is PST GST in Canada and the flip-flop list goes on...
From: ontario | Registered: Oct 2005  |  IP: Logged
Hinterland
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posted 27 October 2005 01:22 PM      Profile for Hinterland        Edit/Delete Post
quote:
…but not always, right? I tried to do my homework on the infant mortality rates in Cuba v. USA by looking at the UN Statistics Department website and providing that link. Fidel (kindly) redirected me to the UNICEF site for more up-to-date stats. I like good data and if I’m unsure about a specific number, I’m not going to assert it as being gospel unless I’ve got back up.

Right. But you seem to be accusing Fidel of some fiddling with numbers, and then turning around and doing the same thing.

quote:
With regard to the $1,200 per capita income figure for Cuba (reported by UNICEF) and the $3,000 per capita income figure for Cuba (reported by the CIA), I guess babblers decide for themselves whether one source is more credible than the other.

I'm pretty sure that the 1,200.00 figure is not PPP and I don't think that figure is useful for making comparisons (and frankly, I don't think GNP per capita, all by itself, is all that useful in talking about standards of living). Since you brought it out (inexplicably) in this thread as well, I thought I 'd make the point again.

quote:
But, I don’t think that you can definitely and incontrovertibly say, “Sven, as I noted in another thread, this is not a valid figure of Cuba's per capita income for comparison's sake. You might stop bandying it around as you are, since it's kind of meaningless.”

The only incontrovertible thing happening here is that I've already said it. You are free to disagree.

[ 27 October 2005: Message edited by: Hinterland ]


From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
Albireo
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posted 27 October 2005 02:15 PM      Profile for Albireo     Send New Private Message      Edit/Delete Post
It's amazing how fast this thread stopped having anything to do with the study that the discussion is supposedly about.

A summary of the paper is linked to at the top of this thread, and the study itself is linked to from the summary. It simply examines the claim that the top 10% of all earners in Canada pay 52% of all taxes, and asks whether that really means that Canada has a steeply progressive tax system. It happens that, in the method used by Statistics Canada, the top 10% of filers are those making more than $64,500 per year. The CCPA study is merely responding to this claim; it is not saying that someone making $64,500 is rich, should be taxed like crazy, or even that the person is high-income. So when Sven says

quote:
What's laughable is that "all those earning more than $64,500 were considered to be in this highest category". $64,500 isn't middle class???
...he completely misunderstands. "This highest category" simply refers to what StatsCan considers to be the top 10% of earners, not what the CCPA author considers to be rich. In fact, it sounds like he agrees that this grouping includes middle-income earners:
quote:
Statistics Canada looked at the tax paid by
the top 10% of tax-filers. This group includes many
individuals most would consider to be middle-income
Canadians, since all those earning more than $64,500
in 2002 were in the top 10%.
The reason the top 10% included many of those with
simply high salaries is that all tax-filers were included
in the sample. In particular, the sample included all
individuals whose income was so low that they owed
no tax but were filing simply to obtain the refundable
child tax benefits or the refundable GST tax credit. In
the study, 50% of tax-filers reported incomes of less
than $23,000 in 2002. Indeed, in 2002 over 7 million
Canadians filed tax returns but had incomes so low
that they owed no tax. Including these individuals in the
analysis clearly lowered the threshold for being in the top
10% and increased the apparent share of taxes paid by
the top 10%.

So the paper doesn't claim that making $64,500 per year makes you rich, or a justified target for highest marginal taxes. It just says that even if the top 10% of tax filers pay 52% of all personal income taxes in Canada, that doesn't mean that our tax system is very progressive, or is punative to the rich. It just means that the top 10% pay a lot more taxes because they make a lot more money. They don't really pay a significantly higher percentage of their income in taxes than do lower-middle income Canadians, so our tax system isn't really very progressive. The paper elaborates on this theme, and provides statistical analysis.

And yet, based on a misunderstanding, Sven launches into ridiculous comparisons between Canada and Cuba, and how disgraceful it is that the study considers somebody making 64K to be rich (which it doesn't), and various people who should know better all pile in as if there was any merit to what Sven said. And none of it has anything to do with the paper in question. It's comical, really.

[ 27 October 2005: Message edited by: Albireo ]


From: --> . <-- | Registered: Sep 2002  |  IP: Logged
DrConway
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posted 27 October 2005 02:26 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Sven:
Is it ten percent of the population?

Seriously, someone making $64,000 probably takes home about $900 per week. A person with that income and a house mortgage, car payments, food and etc., etc. is not “living large”.


No, but they ain't starving. A single adult clearing just $30k a year post-tax can live pretty well even in Vancouver. $30k a year works to $2500 a month. Rent on a one-bedroom is between $500 and $800 a month. Back off food, $400. Back off utilities, $300 (I'm assuming the full smorgasbord of cell phone, digital cable, cable modem, the works).

Even if you take high line estimates of all the basics, said $2500 a month person is spending somewhere around $1700 a month and has another $800 free and clear.

You tellin' me mister $64k can't do better than mister $30k?

[ 27 October 2005: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Hinterland
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posted 27 October 2005 02:34 PM      Profile for Hinterland        Edit/Delete Post
quote:
and various people who should know better all pile in as if there was any merit to what Sven said. And none of it has anything to do with the paper in question. It's comical, really.

...in my defense, I was waiting for you to come around and summarise the whole thing so nicely

I'm exhausted by neo-cons.


From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
Lard Tunderin' Jeezus
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posted 27 October 2005 02:41 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post
Dr. Conway?

You somehow excluded income taxes from your calculation.


From: ... | Registered: Aug 2001  |  IP: Logged
No Yards
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posted 27 October 2005 02:42 PM      Profile for No Yards   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by ex-hippy:
I was not making a blanket ststement. I was wondering about the marginal rates which we could then apply to various income levels. There are probably studies from both ends of the Left-Right spectrum which show one system (take your pick) is superior to the other. For example in the US there are lots of deductions from income which do not exist in Canada. OTOH there is OHIP etc in Ontario. OTOH there is PST GST in Canada and the flip-flop list goes on...

Sorry, I never meant to suggest that you were making some kind of purposely misleading blanket statement. I'm just warning that unless you take two individuals making the same, adjusted for parity, wages, with the same situation and needs, it is hard to say if one is better off living in Chicago or Toronto.

Certainly simply saying that person "A" making $X living in Chicago is better off than person "B" making $X living in Toronto, is not a valid statement on its own.


From: Defending traditional marriage since June 28, 2005 | Registered: Jun 2003  |  IP: Logged
HeywoodFloyd
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posted 27 October 2005 02:53 PM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Lard tunderin' jeesus:
Dr. Conway?

You somehow excluded income taxes from your calculation.


No, it appears that he had the caveat "post tax" on the $30k amount.


From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
Sven
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posted 27 October 2005 03:05 PM      Profile for Sven     Send New Private Message      Edit/Delete Post
Albireo, excellent analysis. I completely agree with your post.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
ex-hippy
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posted 27 October 2005 03:06 PM      Profile for ex-hippy        Edit/Delete Post
Thanks No Yards...
Hey! Shouldn't your handle me No Meters?

[ 27 October 2005: Message edited by: ex-hippy ]


From: ontario | Registered: Oct 2005  |  IP: Logged
Albireo
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posted 27 October 2005 03:11 PM      Profile for Albireo     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Sven:
Albireo, excellent analysis. I completely agree with your post.
Well.. OK, but didn't I say that you completely misunderstood, and referred to your comparison as "ridiculous"?

From: --> . <-- | Registered: Sep 2002  |  IP: Logged
Lard Tunderin' Jeezus
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posted 27 October 2005 03:13 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
No, it appears that he had the caveat "post tax" on the $30k amount.
You're right, I'd missed that. So he's comparing Mr. 45K to Mr. 30K?

I think I made the point in this thread that it's rather futile to make such comparisons, when it's Mr. 350K in dividends that is slipping under the radar....

[ 27 October 2005: Message edited by: Lard tunderin' jeesus ]


From: ... | Registered: Aug 2001  |  IP: Logged
Tory Spelling
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posted 27 October 2005 04:47 PM      Profile for Tory Spelling   Author's Homepage        Edit/Delete Post
quote:
Quoting from the original document Albireo indicated the following:

In particular, the sample included all individuals whose income was so low that they owed
no tax but were filing simply to obtain the refundable child tax benefits or the refundable GST tax credit. In the study, 50% of tax-filers reported incomes of less than $23,000 in 2002. Indeed, in 2002 over 7 million Canadians filed tax returns but had incomes so low that they owed no tax. Including these individuals in the
analysis clearly lowered the threshold for being in the top 10% and increased the apparent share of taxes paid by the top 10%.


They had 'incomes so low they owed no tax'. Did they owe no tax because enough was removed from their paychecks already or because their income was lower than the basic personal exemption? There is a big difference between the two. If it's the former they most certainly did pay tax. In the case of the latter the basic personal exemption in Canada is significantly below 10,000 thousand, it's pretty low.

And by the way, God forbid one would include low incomes in the study of the incomes of Canadians. Oh my God. If you don't earn enough then you don't count. That's absurd.

Why is it that when there is a study of taxes in Canada it always focuses on the income tax, as if it were the only tax burden facing Canadians?


From: Beverly Hills | Registered: Oct 2005  |  IP: Logged
No Yards
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posted 27 October 2005 05:10 PM      Profile for No Yards   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by ex-hippy:
Thanks No Yards...
Hey! Shouldn't your handle me No Meters?

Not until the CFL goes metric.


From: Defending traditional marriage since June 28, 2005 | Registered: Jun 2003  |  IP: Logged
DrConway
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Babbler # 490

posted 27 October 2005 05:18 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
As it is I believe interest and dividend income in Canada do get preferential treatment. May I remind people of my thread on capital gains?

[ 27 October 2005: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Tommy_Paine
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posted 27 October 2005 09:18 PM      Profile for Tommy_Paine     Send New Private Message      Edit/Delete Post
The tax system is really complicated.

Now, I don't think they complicate it to keep rich people from knowing how easy working class people have it, do you?

You can complain about it all you like, or you can just go with the system.

I changed my last name to Bronfman, and opened up an ad agency that makes donations to all the right politicians.

Not only don't I pay tax, but tax dollars now flow into my pockets.


From: The Alley, Behind Montgomery's Tavern | Registered: Apr 2001  |  IP: Logged
Tory Spelling
rabble-rouser
Babbler # 10528

posted 27 October 2005 09:30 PM      Profile for Tory Spelling   Author's Homepage        Edit/Delete Post
You're on to something. The complicated, convuluted nature of our income tax code has allowed wealthy connected people who can afford to hire tax lawyers and accountants to manipulate the system to significantly reduce tax paid. Then on top of that to kick the average gal or guy in the teeth they stand with their hand out for a governement grant or subsidy.

That is one of the strongest reasons to simplify the system. So if I know how much you make I know how much you pay. It's transparent, less costly and more fair. What more can you ask for?


From: Beverly Hills | Registered: Oct 2005  |  IP: Logged
Sven
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Babbler # 9972

posted 28 October 2005 01:37 AM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Albireo:
Well.. OK, but didn't I say that you completely misunderstood, and referred to your comparison as "ridiculous"?

Hey, I'm just admitting I was wrong about the article (which I have to admit, I quickly skimmed). The sentence about "high earners" caught my eye and I went off on a tangent. So, I do agree with what you said.

As far as the "ridiculous comparison" comment goes...again, off on a tangent.

So, yeah, good post.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sven
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posted 28 October 2005 01:43 AM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Tory Spelling:
The complicated, convuluted nature of our income tax code has allowed wealthy connected people who can afford to hire tax lawyers and accountants to manipulate the system to significantly reduce tax paid. Then on top of that to kick the average gal or guy in the teeth they stand with their hand out for a governement grant or subsidy.

That is one of the strongest reasons to simplify the system. So if I know how much you make I know how much you pay. It's transparent, less costly and more fair. What more can you ask for?


I would like few things better than to see about 10,000 tax accountants and attorneys in the USA out of work (along with 99% of the IRS). I have nothing against any of them personally but the tax code is awful.

I'd like to see a flat tax on purchases if there was a way to exempt low income people entirely from taxation.

On that latter point, that is one of the things in Bush's tax law changes that isn't talked about much. Millions of low-income people were taken off of the income tax rolls entirely.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Albireo
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posted 28 October 2005 02:23 AM      Profile for Albireo     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Tory Spelling:
They had 'incomes so low they owed no tax'. Did they owe no tax because enough was removed from their paychecks already or because their income was lower than the basic personal exemption?
I'm certain that they do not mean the former. If plenty of tax is deducted and you get some of it back because you overpaid, then you are certainly a tax filer/payer. They probably mean people whose income is lower than the basic personal exemption plus any other deductions/credits that they are entitled to.

From: --> . <-- | Registered: Sep 2002  |  IP: Logged
Lard Tunderin' Jeezus
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posted 28 October 2005 09:17 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post
I'm happy to see the CCPA taking aim at the propaganda engines of the right:
quote:
The National Post did not pick up the story of Statistics Canada’s analysis until the week after it had been released. So, perhaps to justify publishing a late column about it, they had Statistics Canada do a special run for them of the share of income taxes paid by the top 5% of income earners. They ran the story under the heading “Making $83,000? You’re paying 39% of income tax burden.”

The story provided absolutely no context for these statistics. It did not even mention the share of income received by those earning over $83,000. The reporter, Scott Stinson, quoted two commentators, both of whom lamented the high tax burden on the rich. Craig Alexander, senior economist with TD Bank Financial Group, exclaimed that the fact that the top 10% of earners included everyone who earned more than $64,500 was an “eye-opening observation,” and he wondered “whether or not the tax system is sufficiently discriminating if the top tax bracket is kicking in at such a low level.” Of course, $64,000 is not the top bracket; it is only the cut-off point for the top 10% of earners. Moreover, the threshold for the top 10% is only this low because, as explained above, the study included 7 million tax-filers whose income was so low that they did not need to pay any income tax.

John Williamson, president of the Canadian Taxpayers Federation, is quoted as complaining that the “rise in the tax burden on high-income earners is the result of ‘all the talk in Parliament about only reducing taxes for the low- and middle-income Canadians’.” This peculiar quote that the reporter decided to use shows once again that this deceptively named organization represents the interests of only a small number of wealthy Canadians and cannot get its facts right.


[ 28 October 2005: Message edited by: Lard tunderin' jeesus ]


From: ... | Registered: Aug 2001  |  IP: Logged
Mr. Magoo
guilty-pleasure
Babbler # 3469

posted 28 October 2005 11:45 AM      Profile for Mr. Magoo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Furthermore, Statistics Canada included all tax-filers in their study, half of whom reported incomes of less than $23,000 in 2002. This inclusion lowered the threshold for being in the top 10% -- all those earning more than $64,500 were considered to be in this highest category -- and increased their apparent share of taxes paid.

So?

Why shouldn't these people also be included? Are we not talking about all Canadians? Why would we exclude those who pay less tax, or even those who pay none at all, from the calculations?


From: ø¤°`°¤ø,¸_¸,ø¤°`°¤ø,¸_¸,ø¤°°¤ø,¸_¸,ø¤°°¤ø, | Registered: Dec 2002  |  IP: Logged
Lard Tunderin' Jeezus
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posted 28 October 2005 11:52 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post
Because there was a time when statistics were published on taxpayers rather than taxfilers. Cynics among us believe the change came about to hide ever-increasing class disparity.
From: ... | Registered: Aug 2001  |  IP: Logged
lucas
rabble-rouser
Babbler # 6446

posted 28 October 2005 12:03 PM      Profile for lucas     Send New Private Message      Edit/Delete Post
talk about concentration of wealth... whoa.

CALGARY -- Oil patch insiders are sitting on more than $13-billion in stock market wealth, almost double the Alberta government's projected surplus this year.

The eye-popping number, tallied by brokerage Tristone Capital Inc. and The Globe and Mail, is among the most concrete indicators that the energy windfall in Calgary has reached truly epic proportions.

But wealth on paper can be fleeting, as those enriched by the tech boom in the late 1990s and badly hurt by the 2000-02 bust can attest -- with Nortel Networks Corp. shareholders at the front of the line, to say nothing of those who went through the last oil patch bust.

The calculated wealth in the oil patch is something of a moving target. This one was made by adding up the value of options, shares, trust units and monthly distributions held by the oil and natural gas industry's executive vanguard.

"[Oil and natural gas] is a cyclical industry. This is a snapshot at a given point in time, the fifth year of a bull market," said Chris Theal, co-director of research at Tristone.

That volatility can be severe. As of Oct. 22, Tristone estimated the value of energy stock options to be $6.5-billion, a considerable figure, but it was down more than 15 per cent from an estimate of $7.7-billion less than two weeks earlier on Oct. 13, as the value of energy stocks fell.

Tristone compiled the figures for stock options from publicly available information on about 115 energy companies -- senior and junior producers, integrateds, drillers, pipelines, trusts -- listed on the Toronto Stock Exchange and mostly based in Calgary.

Ownership of actual shares is equally important in compiling an indication of the market wealth in oil and gas.

More so than in other industries, insiders in Calgary often own significant stakes in their companies, a get-rich strategy most successfully employed by Clay Riddell and Murray Edwards.

They are widely emulated. Today, for instance, insiders at a typical upstart junior explorer will own a fifth or a quarter of the company.

A tally of insiders' holdings rings up at $7.3-billion, which added to the options count reaches a total of $13.8-billion.

The $7.3-billion figure is based on insider stakes at the top 20 TSX energy companies ranked by market capitalization, as well as the top eight energy trusts, including distributions from those trusts. The results are based on holdings assembled by The Globe mostly from proxy circulars.

But while such billions are eye-popping numbers, the wealth is limited to a relatively small group of people in Calgary, the industry executives and the geoscientists with the entrepreneurial spirit that make energy profits flow.

So while the government of Alberta is planning to spend $1.4-billion to give 3.5 million or so Albertans a cheque for $400 apiece in January, that's the closest many residents of Canada's richest province will get to oil money.

The wealth tally for some individual Calgarians, compiled by The Globe, is significant but even the richest men in town rank far behind the old-school money in Toronto, with Ken Thomson leading the rich parade at $22-billion and Galen Weston coming in No. 2 at roughly $9-billion, according to Canadian Business magazine.

Still, Calgary's top entrepreneurs are moving up, riding the boom in energy. Clay Riddell, in his late 60s and worth $2.4-billion, now ranks among the 10 richest Canadians after ranking No. 50 several years ago. Mr. Riddell started Paramount Resources Ltd. in 1978 -- during the last massive boom -- and turned it public the same year with a $4.7-million IPO. He still owns 47.5 per cent of Paramount -- a natural gas pioneer -- and has big stakes in two trust spinoffs.

Mr. Riddell makes $148-million a year from trust distributions alone.

Murray Edwards, in his mid-40s, also started humbly. In 1988, he put $100,000 up to help recapitalize Canadian Natural Resources Ltd. with some partners, a company that is now the country's No. 2 oil and gas company. He has pulled off the same trick, though not quite as successfully, with other names such as Ensign and Penn West Energy Trust.

Simply running an oil and gas company is profitable as well.

Gwyn Morgan, CEO of EnCana, made $11.5-million in 2004, with about $5-million from stock options, and Jim Buckee, CEO of Talisman Energy Inc., made $10-million, with $7-million from options.


From: Turner Valley | Registered: Jul 2004  |  IP: Logged
Tory Spelling
rabble-rouser
Babbler # 10528

posted 28 October 2005 01:42 PM      Profile for Tory Spelling   Author's Homepage        Edit/Delete Post
quote:
Mr. Magoo says:
So?

Why shouldn't these people also be included? Are we not talking about all Canadians? Why would we exclude those who pay less tax, or even those who pay none at all, from the calculations?


Totally. I totally agree. That's what I was saying. Of course they should be included.

And there is no way that 7 million tax filers in Canada do not pay income tax. That's a ridiculous assertion.


From: Beverly Hills | Registered: Oct 2005  |  IP: Logged
Hinterland
rabble-rouser
Babbler # 4014

posted 28 October 2005 01:45 PM      Profile for Hinterland        Edit/Delete Post
Have you actually read any of the links associated with this topic, Ms. Spelling, or are you just moving on your CPC propaganda and talking points?

Because...and forgive me....YAWN!


From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
outlandist
rabble-rouser
Babbler # 10253

posted 28 October 2005 02:27 PM      Profile for outlandist        Edit/Delete Post
quote:
Originally posted by neo:

In Ontario the highest marginal tax rate is close to 50% and it does kick in at much lower income levels than in the US.

Another big difference is that in Canada, single income families are punished as compared to dual income families. (I.e. cmp single earner making $70k vs dual earners making $35k + $35k.)


Hinterland: Each tax filer has approx $8,200 personal exemption.One person with a 70k income has a 61.8k exposure but two people have only a 53.6k exposure.


From: ontario | Registered: Aug 2005  |  IP: Logged
Hinterland
rabble-rouser
Babbler # 4014

posted 28 October 2005 02:37 PM      Profile for Hinterland        Edit/Delete Post
The point of this story is that not only are those earning higher incomes not taxed any worse than others, but that the share of wealth for those earning higher incomes in the last years has increased, whereas the share for lower incomes has decreased. This has led to greater income stratification in Canada. A secondary point was that the corporate media was too quick to jump on a story that fed the usual lies about rich people being so hard-done-by.

You righties can quibble all you want about the details, but that's frankly, all I need to know.


From: Québec/Ontario | Registered: Apr 2003  |  IP: Logged
Stephen Gordon
rabble-rouser
Babbler # 4600

posted 28 October 2005 02:51 PM      Profile for Stephen Gordon        Edit/Delete Post
I concur with Hinterland's assessment. Those numbers surprised me, and I made it a point to look up the StatsCan studies. The CCPA interpretation seems like the right one to me.
From: . | Registered: Oct 2003  |  IP: Logged
outlandist
rabble-rouser
Babbler # 10253

posted 28 October 2005 02:51 PM      Profile for outlandist        Edit/Delete Post
Tax breaks for higher incomes may or may not benefit the economy.The tax savings could as easily be spent on a foreign holiday.

The feds are very slowly raising the personal exemption to 10k.Much too slowly.By raising the personal exemption of the working poor,even with a clawback recapture for higher income brackets,the tax savings will immediately be invested in the economy for necessities of life.The working poor do not have discretionary options.

Higher income earners have many more options for tax reduction and especially for tax deferral.Savvy tax planning by a six figure earner can result in less tax payable than a middle income earner who does not have the disposable income to take advantage of deferrals.


From: ontario | Registered: Aug 2005  |  IP: Logged
Sven
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Babbler # 9972

posted 28 October 2005 03:59 PM      Profile for Sven     Send New Private Message      Edit/Delete Post
quote:
Originally posted by outlandist:
The feds are very slowly raising the personal exemption to 10k.Much too slowly.By raising the personal exemption of the working poor,even with a clawback recapture for higher income brackets,the tax savings will immediately be invested in the economy for necessities of life.The working poor do not have discretionary options.

That is where the focus of tax reform should be. If a person doesn't make very much money, they shouldn't pay any income tax. I'd sure as hell make it higher than $10k.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Olly
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posted 28 October 2005 04:22 PM      Profile for Olly     Send New Private Message      Edit/Delete Post
quote:
That is where the focus of tax reform should be. If a person doesn't make very much money, they shouldn't pay any income tax. I'd sure as hell make it higher than $10k.

This is purely from memory and someone can correct me if I'm wrong, but no one really starts paying taxes in Canada until around $13,000 in income because of non-refundable tax credits.


From: Toronto | Registered: Nov 2002  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 28 October 2005 07:25 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
What the h e double-hockey sticks are you smoking, Olly? I paid taxes on about $18k gross the last full year I was in the workforce and you better bet your britches I only got a tax refund because of the disability credit. If it hadn't been for the disability credit I would have been just about on the nose with my tax deductions over the course of the year.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Tory Spelling
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posted 29 October 2005 01:36 AM      Profile for Tory Spelling   Author's Homepage        Edit/Delete Post
quote:
Olly:
This is purely from memory and someone can correct me if I'm wrong, but no one really starts paying taxes in Canada until around $13,000 in income because of non-refundable tax credits.


Canada's basic personal exemption is currently in the vicininty of $8,000.

Yes there are refundable and non-refundable tax credits that reduce the amount of money paid through the income tax system. But they do not necessarily reduce the amount paid in income tax.

A tax credit is money one gets back. Some are non refundable tax credits which simply means that if one does not actually have to pay a dime in income tax then the person does not qualify to receive any money back. Then there is the refundable kind. For example, citizens of the province of Ontario qualify to receive a $100 tax credit. Any tax filer can get this $100 tax credit whether they earned any income or not. Although you may have to be at least 18 to get it if you did not have any income to declare, or maybe the criteria is more that you get it so long as a parent or guardian is not claiming you as a dependent in their filing. Whatever.

However, this $100 does not reduce the income tax burden of Canadians living in Ontario. The purpose of giving this $100 back is to offset the burden of the Ontario provincial sales tax charged on most goods purchased, currently some 8%. In other words the Ontario government uses the federal income tax system as a vehicle to reduce the burden of the PST in Ontario especially important for low income Ontarians. That is why it is paid whether one has earned income or not.

Of course this raises a side issue. Namely that this refundable tax credit has been $100 for about 20 or 30 years. Doesn't anybody in Queens Park realize that if there is going to be a commitment to the idea of giving a sort of rebate on PST to the people of Ontario then the amount paid should not be a set amount it should rather be tied to the cost of living increase and should be going up each and every year there is an increase in the CPI. Otherwise it amounts to a tax increase. That message goes to all three parties who have governed Ontario.

Another example of a refundable tax credit would be the percentage of rent or mortgage paid during the tax year called the property tax credit. You would get back some percentage of 'rent' paid the purpose being to offset the burden of property tax paid. Again this being especially important for low income people.

Does this tax credit reduce your income tax burden? No it absolutely does not. A portion of the money paid in rent goes toward the cost of the property taxes for the particular dwelling in question. Again the income tax system is used as a vehicle to reduce the burden of property taxes especially for low income Canadians.

The basic personal exemption is itself a non refundable tax credit. Meaning that no money is paid to you, but it reduces your income tax burden. It is by far the most significant non refundable tax credit that the vast majority of tax filers is entitled to. There is also a spousal tax credit which of course beside having to have a spouse you only can claim it if your spouse has not filed on their own.

Monies paid in CPC and UI premiums constitute non refundable tax credits. They reduce the amount of income tax paid. But since they are basically taxes unto themselves it is debatable whether they reduce the income tax burden of an individual or not. The money paid in CPC premiums today goes to current retirees. And of course the UI premiums go into general revenues as well. Many would know that the Liberals have effectively used the money from UI premiums to spend on many things having nothing to do with paying benefits to unemployed workers, worker training or retraining or the like. In other words they are effectively a tax for the most part. So to say that they reduce the income tax burden of anyone is faulty logic. The argument would be stronger in the case of CPC if the money collected was being paid to future retirees and not current retirees.

Other non refundable tax credits include: Interest on student loans, tuition fees paid, medical expenses, donations and gifts including a few others. In all cases money is paid out and the income tax system is used as a vehicle to reduce the burden of incurring each of those expenses or contributions.

The basic personal exemption is there to reduce the burden of income taxes paid or to be paid by Canadian income earners. And it is only a paltry $8,000.

Let's say it was $10,000. That would mean someone could pay $400 a month for a place in a rooming house or $4,800 for the year, pay for a telephone at about $40 a month or some $480 for the year. There'd be so much for food, clothing as well as the cost of washing clothes. There'd be money to pay CPC and UI premiums, as well as income tax using the example of a single person. And there'd be money for little else. Not much of a life really. That is why I find it difficult to understand why there is not a full blown push to get the BPE increased to at least $10,000 for an individual. And then to have it indexed to the CPI (consumer price index) each and every year there after. Otherwise as prices increase the benefit of the basic personal exemption is reduced, over longer periods of time it becomes irrelevant.

[ 29 October 2005: Message edited by: Tory Spelling ]


From: Beverly Hills | Registered: Oct 2005  |  IP: Logged
Olly
rabble-rouser
Babbler # 3401

posted 01 November 2005 11:53 AM      Profile for Olly     Send New Private Message      Edit/Delete Post
Thanks, Tory Spelling. I understand the difference between a refundable and non-refundable tax credit. My point remains the same that most people don't start paying taxes immediately once they exceed the base exemption.

I did a bit of digging, and a single person begins to pay tax at $10,400, single parent with kids begins to pay at $28,000, assuming they are receiving the minimum credits a low-income person would be entitled to (ie. no eduction expenses).

One argument against raising the base exemption is that it benefits people all along the income spectrum and not just the bottom. A better approach than raising the base exemption is a refundable tax credit paid to low income Canadians, which is something I've been looking at in my day job recently.


From: Toronto | Registered: Nov 2002  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 01 November 2005 01:05 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
In British Columbia you start paying tax at about $8500. This is for a single adult employable individual with labor income only and no other credits. GST doesn't count because that's paid out quarterly. and income tax and EI/CPP come off the top of every paycheck.

The BC Provincial Tax Credit is $75, which, yeah, ok, makes it like $8600 for your threshold, but the point is, ain't no way it's ten grand.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged

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