1700 ideas posted
Income taxes are too high on small income earners. When the poor can Afford decent housing, transportation and food All Those things make for a stronger economy.
Submitted by Gilles 1 year ago
Yes good wealth distribution makes stronger economy. I agree
Ontarians earning more than $509,000 in 2013 face a combined federal/provincial marginal tax rate of 49.5% while Quebecers who earn more than $100,000 and Nova Scotians who earn more than $150,000 currently pay tax at combined marginal tax rates of 50%
With tax rates at 50% for those who are in the top 1%, I think they are paying more then their fair share. They pay so much in fact that it is almost a punishment to be successful.
The top 10%, whose income was at least $81,200 in 2010, accounted for 55% of the total personal tax collected in 2010. That is data without Provincial taxes on top.
In summation, we need to cut taxes to everyone. This will promote people with money, who make jobs to stay in Ontario and Canada. Cut down on the paper pushers in government. Start rewarding government departments who are frugal with their budgets, instead of instead of fiscal end budget blowout so they don't receive cut backs. Liberals idea of creating jobs is adding more to their own government which comes with the benefits and salaries the tax payers cannot afford to pay.
This needs to happen immediately. Many low income earners are in a crisis situation today.
So are many who aren't so what's your point?
Removing the Provincial portion of Income tax on low wage earners would have the same impact on workers that raising the minimum wage would, but it would place the burden of paying for it on society as a whole, not on individual business owners.
Interesting idea. It would also almost certainly spur the economy as low income earners are the most likely to spend what they save in taxes.
... and compensate for this by increasing the income tax on high-income earners
It could be paid for in a number of ways, higher income tax on high-income earners being one of them. Changing the structure of Capital Gains tax would work even better. As of right now only 50% of Capital Gains is taxable, bumping it to 55% on everything over $500,000 would likely come close to offsetting the cost of eliminating income tax on low income earners.
@JustinErb, having studied tax, capital gains calculations are *way too complicated* enough without needing to have marginal capital gains rates. Your basic idea, raising the inclusion rate, I agree with. Adding another bracket would add another page to Schedule 1 and ON 428, which (if you haven't read them) are intricate enough as it is.
Removing income tax on low income earners makes even more sense. It has the same effect as raising the minimum wage, but puts the burden on society, not business owners.
Excellent, intelligent comment
Yes. There should be no taxes levied below a liveable income or at least 30,000 dollars. This would give people an incentive to work.
I think "not starving/freezing to death" and "improving my standard of living" are generally sufficient motivators. If that dosen't get them wanting to work, giving them an extra couple hundred in tax breaks probably won't do it, either.
Do not tax those low income individuals and families as defined:" In 2010, the LIM-AT threshold for a single person was $19,460. For any other household size, the threshold is equal to the single-person threshold multiplied by square root of the household size. For example, the LIM-AT threshold for a household with two members is $27,521 and for four members is $38,920." - statistics canada.
if the low income families are given tax break they will spend it in Canada to stimulate the economy. When you give tax break to high income group they spend it abroad, which does not help the ecomomy
The primary problem with variable income taxes depending on one's income is that income and the cost of living varies depending on where one resides, while the cost to provide services decreases as population density increases, and representation generally decreases per capita as population density increases (due to northern Ontario being overrepresented).
A great point. This is why province wide laws such as income tax rates and minimum wage laws don't work. You can buy a 3 bedroom house in Chatham (Ontario) for under $27,000. Look it up if you don't believe me.
A guy making minimum wage and paying tax on it is doing great if he lives in Chatham. Same guy in the GTA is out of luck.
Income taxes are an unfair method of taxation just as minimum wages are unfair to workers and employers.
Better than increasing the minimum wage and crippling some startups
I would think that most start-ups are staffed by owner-managers, their friends and their families. I have absolutely no data to back this up, of course, but I haven't heard of start-ups that, right after getting their business cards back from the printers, immediately hire full-timers to staff the tills.
No one should pay tax on income required to make it out of poverty.
Raise the minimum income threshold (personal exemption) before people start paying income tax. That will give a boost to the economy when people actually have money to spend on more than the strict necessities. Balance this by closing loopholes in corporate taxes so corporations pay the actual tax rates they are supposed to.
Immediately raising the personal exemption to the amount allowed federally and then continuing to direct any additional tax relief only to individuals in this manner and not corporations would go a long way to stimulating economic activity and well-being.
Aside from the generic 'tax cuts create jobs' and 'people spend money they get' neo-conservative talking points, does anyone have any consumer or economic research (that is, peer-reviewed) which shows how people divide their extra money between savings and expenditures?
Based on my own spending patterns, I find that any windfalls I get (whether from tax refunds or investment income or birthday gifts) tends to end up going into paying down debt or straight into my savings. Neither of these, it seems, really stimulates the economy.
(I readily admit, though, that economic multipliers were never my strength)
A generalized approach of penalizing success is not the way to go. i.e. increasing taxes on higher income earners across the board. You don't have to be making huge dollars to see the gov take almost half of your earnings. Focus first on closing loopholes for tax payers earning over 250k and corporations. (somehow I doubt many corps pay the full 15%) Also look for cost savings via the shutdown of inefficient / ineffective gov programs to fill gaps.
There needs to be a balanced approach ...last thing we need is to move towards ideological extremes like the U.S.
1) Read my comments below on these mythical 'tax loopholes': They don't exist. If you can cite one, please tell me which sections of the ITA apply to them. I think CRA would like to know, too.
2) Actually, I'm guessing that most corps pay more than 15% tax. I only know the federal system and I'm not sure how different the Ontario system is, so if you know about the Ontario system, please let me know. The federal income tax rate for business is actually 38%, less 10% for all income earned in a province (to offset provincial tax). That gives you 28%. Then, there are special deductions/abatements applied depending on what kind of income it is). Corporate income derrived from an active business can deduct an additional 13% from *that income only*. Qualified private small business income (up to $500,000) can deduct 17% *of that income only* from their taxes payable, and there is a similar deduction for qualifying manufacturing expenses. Most investment income actually pays a surtax to discourage businesses from sitting on money and a special tax on dividend income they receive (which is otherwise not taxable).
Again, these are the federal numbers. If the Ontario system differs, please let me know!
anyone who works a full week should should be able to support their family without living in poverty or having to work 2 jobs. To do so, hourly wages need to be set to a minimun of $15/hr.
I society that knowingly supports a poverty living working class will always have social problems that cost far more to patch with no fix possible until they acknowledge the real problem. Most people want to be appreciated for their efforts, less tha $15/hr is poor management
No, minimum skill = minimum pay. You shouldn't be having kids you cannot afford.
I want free stuff and everyone else to pay for it.
And Brendan Cowie, this is exactly why nobody's paying to read your opinion :-P
Lower it? Abolish it for incomes below $25K.
Give me something for free. Make somebody else pay for it.
I take it that you aren't a parent, or ever gave someone a Christmas gift, or donated to a charity or done any number of other compassionate acts which causes someone to get something without paying for it. Yes, people who show those acts of kindness and humanity are truly the worst kinds of people. Shoot them all, I say.
There seems to be a desire to have the "rich" pay even more....but there is also a misunderstanding that underestimates the huge percent of the overall tax burden that the rich already pay. And if you are lower income, please do not overlook the marginal tax rate that applies (the lowest); as well as various and sundry tax credits (GST credit; Ontario Trillium benefit; etc). I'm all for lowering taxes on lower income people. But we would be better served to look at reducing wasteful Government spending that simply drives up costs for everyone....including the poor.
Just did a calculation on how much Ontario tax is owing (including health premium) on $25,000. There would be $1087 in taxes paid to Ontario... or 4.348%. Monthly payments from the Ontario Government for the Trillium benefit bring the net amount paid by someone making $25,000 well under $1000. The personal exemption is basically $9500 (so no tax to Ontario under this amount) and anything between that up to about $40,000 is taxed at 5.05%. This is a small amount to pay to the province that provides so many services, benefits, etc. Throw in a dependent/children and the tax burden decreases even further.
Almost. You forgot the Ontario Tax Reduction (line 54 to 61 on ON428), which actually brings the tax payable down to $654. The effective Ontario tax rate, therefore, is 2.6%
The caution I would have about 'throwing in dependents' (or medical expenses, for that matter) is that those tax credits are supposed to offset the increased costs of caring for children and the infirm.
It's kinda like when you're injured in a car accident and get a $20,000 settlement: you haven't exactly 'made' $20,000. You've gotten $20,000 to offset the rehabilitation costs that you wouldn't have if you hadn't been in that car accident.
Good wealth distribution makes a stronger Economy? You are so wrong Gill. I pay way too much tax! I have had it. I offer you this Story (My story). I am an oilfield worker outside of Canada. I work in crappy dangerous places because the Canadian Government allows Foreign workers in doing my exact job but won't fight for me? I spend minimum 6 months away from my family and friends. No labor laws in many of these places I work. Yet I am taxed to death? So people who do nothing can sit at home and smoke weed and play X-Box? Or that fat Chief up in Abiwapiskat or however you spell it driving her Escalade. Can I have some of the money I risked my life for please? Or is it all yours to distribute it as you like? My children are being taxed because there Father has to leave them and earn more money because too many lazy people believe they can vote away my wealth. I am close to selling up everything and leaving this country. I am of immigrant decent. My ancestors came here for a better future for there children I believe the future is in jeopardy for my children. If my taxes increase .5% I am gone
Buddy, we are all in this together.
There are a few issues I have with your story:
1) It's fairly tricky to get a 'foreign worker to do a Canadian job.' Having had spoken to foreign nationals living in Canada and with some experience in trying to hire a foreigner, an employer can't just fly someone over and give them work (if you know someone who has, call the CBSA immediately). To bring a person into Canada to work, the employer basically has to demonstrate that no other Canadian could do the job. As I'm not an immigration lawyer, I don't know the mechanics of the system. I'm just saying that it isn't quite consistent with my experience and knowledge.
2) I'm guessing that the people who 'do nothing, sit at home, smoke week and play X-Box' is a reference to people on welfare or employment insurance. Again, not exactly correct. EI is a restricted programme which one qualifies for by actively seeking work when one is terminated from a job. Likewise, I don't know the mechanics of welfare, but there has to be a demonstration of need beyond 'I'd rather stay at home and play video games and smoke weed'
3) If you're out of the country for at least 6 months of the year, then you should speak to a tax lawyer or an accountant who deals with non-residents. Generally, the people who need to file tax returns and pay tax in Canada are people who live in Canada for at least 182 days of the year. Granted, if your family, assets and social base is all in Canada, you'd probably not be deemed a 'non-resident', but something tells me that you're not taking advantage of the provisions of our tax system.
Guaranteed Annual Income for everyone.
Two points: "Penalizing success". Success is never measured by how wealthy you are. Many have acquired wealth to the detriment of society. Success is measured only by how much one has fought and succeeded in reaching his or her maximum potential, all the while respecting others.
Large corporation (and you hear that all the time) pay as little taxes as they can by utilizing tax loopholes. Some do not even pay any tax at all.
@BGW: Not that I disagree with you in principle, but can you identify a section of the Income Tax Act that would qualify as a 'loophole'? I'll save you some time: there aren't really any. It is true that there are ways that people and companies can organise their affairs and that there are alternative treatments that would yield differing taxes payable (automobile expenses is a popular one). These are deliberately designed as options to accommodate differing tax circumstances.
However, there are two main reasons why there are so few tax loopholes left in our system:
1) They've already been closed. CRA, Parliament and the Federal Tax Court are pretty efficient at plugging any gaps in the law. You may remember the infamous Halloween announcement of 2006 which made income trusts taxable entities and thereby closed off the ability for corporations to reorganise themselves to avoid paying tax. Additionally, decisions in tax court tend to be reflected in the subsequent revision of the ITA (such as the deductibility of gluten-free foods as medical expense);
2) S. 245 of the ITA gives the General Anti-Avoidance Rule (GAAR). The ITA added the GAAR as a catch-all measure to prevent tax-avoidance manouevers that weren't already plugged in the law. Basically, it says that any transaction which lacks economic substance but seems purely intended to avoid paying tax can, for tax purposes, be reversed or ignored.
Again, the system's not perfect, but it's much better than people think. General ignorance of our tax system (not to be critical, I probably know less about whatever fields of specialisation you are in) is a huge problem, and a cause of useless, expensive and wheel-spinning measures like the Alternative Minimum Tax, which exist only for the optics rather than to 'level the playing field'.
Further, to the people who say that the rich wouldn't benefit from lowering the tax on the lowest income bracket or increasing the base exemption: you're also wrong.
Income tax brackets apply to all people equally (one of the provisions of the Charter of Rights and Freedoms ensures that). Therefore, eliminating the amount of tax that someone pays on $25,000 of their income will also eliminate the tax on the first $25,000 the Thompson heirs (wealthiest Canadian family, FYI) pay on their income. Tax brackets work equally for all people, and I encourage you all to consult the CRA website if you've never seen how they're calculated:
Sorry, *Thomson* family. Didn't proofread closely enough :-(
More money in the pockets of low income people benefits the economy. Those people are the ones who spend proportionally more than the wealthy who are pocket conscious.
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