Personal Finance

Income Over $150k To Be Heavily Taxed

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  • Sep 15th, 2014 8:25 pm
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Sr. Member
Jan 30, 2006
857 posts
286 upvotes
bubak wrote: There are lots of places in the world where being a doctor is just a normal job with a pretty average salary. But in those places, medical education is also free, and medical students get paid an average salary when they are training to become doctors. Here in Canada, due to mobility with the US, we're pretty much forced to follow the American model of doctors first being required to pay tons of money over many years while training, and then having to be paid tons of money later to make up for it.
it's super easy to resolve the problem
create temporary doctor program or
have contracts with them - if they are allowed visa they have to works let's say 10 years in Ontario etc
and in a year you can have army of doctors who ready to work for 60k

suddenly balanced budget and taxes could be 10% lower for everyone
Member
Nov 25, 2011
422 posts
61 upvotes
201-8 Sampson Mews, …
bubak wrote: If you split the $400k between 10 people, then who's going to pay the $200k tax that the $400k person would have paid?

If the $400k person is being overpaid for the value that they're bringing, then where are the long lineups of people offering to bring the same value for $390k?
Well your economic output would increase 10x bringing in more tax revenue, whilst at the same time your costs are reduced (assuming that these 10 unemployed people require some cost). Not to mention that $400k across 10 people is going to be spent more further increasing your economic output and tax revenue. Win-win-win.

The reason why our society has perceived their value at $400k and there are no $390k guys lined up is that at the top end of the skilled market in many industries we've completely lost touch with what value this person can add. See, for example, the countless examples of people being paid 7 figure salaries and bonuses whilst running a company into the ground.
Member
Nov 25, 2011
422 posts
61 upvotes
201-8 Sampson Mews, …
flafson wrote: Just because Walmart heavily relies on minimum wage employees, doesn't mean that everyone or most other companies do the same. It highly dependent on their niche.
When you're the employer there are 2 things that you look at, making money and good employees. You wouldn't pay someone more than the value they bring in but at the same time you will try to pay them more because they will be happier, they will stay for longer and it will ensure you have high quality employees.
I agree with you. I'm not saying all companies have the business model of Walmart. What I am saying is that attributing the success of companies to those at the top who are paid very well and saying that lower income workers dont contribute anywhere near as much to it's sucess (as one poster was arguing) is laughabe. And in fact in many companies it's almost the exact opposite to this (like Walmart).
Sr. Member
Jan 30, 2013
741 posts
111 upvotes
RICHMOND HILL
bubak wrote: There are lots of places in the world where being a doctor is just a normal job with a pretty average salary. But in those places, medical education is also free, and medical students get paid an average salary when they are training to become doctors. Here in Canada, due to mobility with the US, we're pretty much forced to follow the American model of doctors first being required to pay tons of money over many years while training, and then having to be paid tons of money later to make up for it.
Pray tell where are these countries?
Are they on par with Canada for life expectancy? mortality from botched operations?
Sr. Member
Jan 30, 2006
857 posts
286 upvotes
goldenball wrote: Pray tell where are these countries?
Are they on par with Canada for life expectancy? mortality from botched operations?
take any European country, Israel
I can whisper even one country you won't believe Cuba
I believe in Cuba they get $20 a month
Strange $250 or 400 000 per year get the same result
Sr. Member
Jan 30, 2013
741 posts
111 upvotes
RICHMOND HILL
sorry those countries do not have the life expectancy at birth rates comparable or better than Canada.

1 Japan 86.5 85.3 - 89 -
2 Italy 84.6 82 - 87.3 -
3 Andorra 84.2 80.8 - 87.6 -
4 Singapore 84 82 - 87 -
5 Hong Kong 83.8 82 - 85.6 -
6 San Marino 83.5 82 - 85 -
7 Iceland 83.3 81.4 - 85.2 -
8 Monaco 83.1 80.4 - 85.8 -
9 Australia 83 80.5 - 85.5 -
10 Sweden 83 81.4 - 84.6 -
11 Switzerland 82.8 80.4 - 85.4 -
12 Spain 82.5 79.5 - 85 -
13 Canada 82.5 80.4 - 84.6 -
Deal Addict
Nov 24, 2004
3943 posts
570 upvotes
Toronto
The claim that RRSPs have nothing to do with "tax avoidance" seems specious to me. Isn't the whole idea that you contribute to your RRSP, avoid paying tax on some of your income at the time of contribution, then withdraw from those savings when you are retired and in a lower tax bracket? The point is to defer paying taxes on part of that income until a time when you are paying a lower tax rate. It's a method of reducing tax paid over one's lifetime, not just deferring payment of taxes.

If I am mistaken here someone please correct me.
Deal Addict
User avatar
Feb 19, 2014
2751 posts
1612 upvotes
Langley
JHW wrote: The claim that RRSPs have nothing to do with "tax avoidance" seems specious to me. Isn't the whole idea that you contribute to your RRSP, avoid paying tax on some of your income at the time of contribution, then withdraw from those savings when you are retired and in a lower tax bracket? The point is to defer paying taxes on part of that income until a time when you are paying a lower tax rate. It's a method of reducing tax paid over one's lifetime, not just deferring payment of taxes.

If I am mistaken here someone please correct me.

If you're making $150k a year and max out your RRSPs, while having a good investment portfolio, RRSPs can get over utilized after 20 years. My uncle makes about $200k a year, is 52 years old, has a good investment portfolio, and has supplemental income with investment properties/renting. He told me he doesn't contribute to RRSPs anymore because he has too much money in them.

He has supplemental income, so if he were to withdraw from his RRSP's his tax bracket would still be high he said, even when he retires.

For the average person that will likely not have supplemental income, RRSP's are great. But, for people who are making over $150k, I can see how RRSP's don't always work.
Deal Addict
Oct 29, 2010
4287 posts
634 upvotes
kashirin wrote: take any European country, Israel
I can whisper even one country you won't believe Cuba
I believe in Cuba they get $20 a month
Strange $250 or 400 000 per year get the same result
Israel is very different though.
First, it's half public half private. The public option pays very little, until they get some real experience, they make a lot less than I.T. I've heard numbers around $2,000 per month which is around or slightly below the average salary in Israel.
Second, getting accepted to med school in Israel is just as hard if not harder than it is in Canada. They have a special exam you take after high school and army to which only the highest 1% of the grades in that year get accepted. Then, it's also 7 years of university and costs about 4-5k per year. Quite a few people who want to go to med school end up going to Eastern Europe to study because it's nearly impossible to get in.
What most doctors end up doing there is divide their week such that they work 3 days public and 3 days private where public pays almost nothing and private pays about 6k+ per month.
In terms of service, it is better because there is less stress on the system, if you have something urgent you can just pay for it and get it done but overall less stress on the system means you don't wait more than a few months for a specialist.
Deal Fanatic
Mar 24, 2008
5928 posts
2124 upvotes
Toronto
flafson wrote: Israel is very different though.
First, it's half public half private. The public option pays very little, until they get some real experience, they make a lot less than I.T. I've heard numbers around $2,000 per month which is around or slightly below the average salary in Israel.
Second, getting accepted to med school in Israel is just as hard if not harder than it is in Canada. They have a special exam you take after high school and army to which only the highest 1% of the grades in that year get accepted. Then, it's also 7 years of university and costs about 4-5k per year. Quite a few people who want to go to med school end up going to Eastern Europe to study because it's nearly impossible to get in.
What most doctors end up doing there is divide their week such that they work 3 days public and 3 days private where public pays almost nothing and private pays about 6k+ per month.
In terms of service, it is better because there is less stress on the system, if you have something urgent you can just pay for it and get it done but overall less stress on the system means you don't wait more than a few months for a specialist.
How about the UK? GPs make around 70k (pounds). Speaking of wait times, there are long queues for various procedures in Canada and doctors are highly paid. How do you explain that? You pay the same as US but receive shi**y service.
Deal Addict
Nov 24, 2004
3943 posts
570 upvotes
Toronto
jellytime wrote: For the average person that will likely not have supplemental income, RRSP's are great. But, for people who are making over $150k, I can see how RRSP's don't always work.
Yes, I don't disagree with this or with the rest of your post. For many high-income people RRSPs can indeed be problematic. For someone who expects to be in a lower tax bracket at retirement than he or she is beforehand, they can be very valuable. My comment was directed at those who feel RRSPs are a mechanism of tax deferral and not of tax avoidance. For those in the latter case (lower tax bracket after retirement) there certainly is an element of tax avoidance as well as deferral.
Deal Addict
Oct 29, 2010
4287 posts
634 upvotes
ksgill wrote: How about the UK? GPs make around 70k (pounds). Speaking of wait times, there are long queues for various procedures in Canada and doctors are highly paid. How do you explain that? You pay the same as US but receive shi**y service.
Remove the ban on private option and see what happens. People who want service now will pay some money for it and remove stress from the system. I see no reason why it will hurt the system like some think.
Newbie
Jan 26, 2014
45 posts
12 upvotes
kashirin wrote: yes, I expected this sort of reply
so tell me why in Europe they work for 100k but here they must get 400k?
in some countries the same qualifications doctors work for 10k
hell even in Toronto, thousands of foreign trained doctors work as taxi drivers and janitors because they don't have a way to confirm their credentials
but somehow we don't have enough doctors and I have to pay 40% tax to support obscene salaries to those 25 000 god chosen doctors

Why? Because the 100k you mention is in GBP, comes with a DB pension plan, 6 weeks of vacation, extended health benefits, no overhead and a defined 40 hour work week. Net take home - pretty much the same. This is from a specific example comparing my take home pay with my colleagues performing the same specialty work in Cambridge UK.

I'm not sure where you cite the 10k "in some countries". I've worked in Ethiopia and I can tell you the salary for part-time work in government hospitals is much above 10k.

Canada has a world-class system for training physicians - this is not true of most of the nations that have trained your taxi drivers and janitors. It's unfortunate they are not utilizing their expensive skills taking care of the patients in their home nations because the vast majority do not have the skills or experience to provide the standard of care expected in Canada.

Not only is this thread off track it's filled with bologna.
Deal Fanatic
Mar 24, 2008
5928 posts
2124 upvotes
Toronto
flafson wrote: Remove the ban on private option and see what happens. People who want service now will pay some money for it and remove stress from the system. I see no reason why it will hurt the system like some think.
I agree, it is just that some here think that Canadian healthcare system is perfect the way it is.
Deal Fanatic
Mar 24, 2008
5928 posts
2124 upvotes
Toronto
Oslerscodes wrote: Why? Because the 100k you mention is in GBP, comes with a DB pension plan, 6 weeks of vacation, extended health benefits, no overhead and a defined 40 hour work week. Net take home - pretty much the same. This is from a specific example comparing my take home pay with my colleagues performing the same specialty work in Cambridge UK.
...
I can assure you that physicians here (Canada) make 2-3x the amount you quote above, have a DB pension plan and receive 5-6 weeks of vacation + extended health benefits. What are you talking about? Stop whining!

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