Personal Finance

Income Over $150k To Be Heavily Taxed

  • Last Updated:
  • Sep 15th, 2014 8:25 pm
Tags:
None
Sr. Member
Jan 30, 2006
853 posts
286 upvotes
divx wrote:
May 5th, 2014 11:44 am
^basically they move to the states for a pay raise and we need to import more doctors from other countries to make up for the loss
I don't know if that stats is true but the facts are

my family doctor moved_from_states
my children pediatrician moved_from_states

and they specifically mentioned they moved because money here in Toronto are better

and If you don't know there are several loopholes in tax code which are created specifically for doctors so you can be sure doctors are extremely overpaid here
this is probably the biggest problem with our budget and unless the government doesn't curb their payments taxes will continue to grow for the rest of us
Sr. Member
Jan 30, 2006
853 posts
286 upvotes
EugW wrote:
May 5th, 2014 3:45 pm


They actually did that a while back and it was a disaster. It turns out an awful lot of them were subpar, so they had to go through the full training or near full training anyway. They got rid of that program completely, relatively quickly.

Part of the problem was due to allowing the wrong people into the program, but I guess it's hard to get the right people when they're just looking at resumes, and what not.
The truth is that pool of money which is available for doctors doesn't change with a number of doctors but just depends on what Ontario Medical Association negotiates. And that amount usually increases 5-7% per year
they basically are the union for doctors. So of, course they try to prevent entering excessive number of new doctors into the system as that dilute their salaries
so if number of doctors increase their pay will automatically decrease per head
And Ontario Medical Association will do anything to prevent that

So of course, they will make any program look bad that will significantly increase number of doctors in province
so doctors come from countries where healthcare result are on par with Canada but somehow they sub par to practice in Canada
Deal Fanatic
User avatar
Sep 13, 2003
9837 posts
1600 upvotes
kashirin wrote:
May 6th, 2014 12:11 am
The truth is that pool of money which is available for doctors doesn't change with a number of doctors but just depends on what Ontario Medical Association negotiates. And that amount usually increases 5-7% per year
they basically are the union for doctors. So of, course they try to prevent entering excessive number of new doctors into the system as that dilute their salaries
so if number of doctors increase their pay will automatically decrease per head
And Ontario Medical Association will do anything to prevent that

So of course, they will make any program look bad that will significantly increase number of doctors in province
so doctors come from countries where healthcare result are on par with Canada but somehow they sub par to practice in Canada
OHIP pays for doctors in Ontario. There's not a set amount of money per say, they bill for whatever test the patient requires.
One blind human - a tragedy
Ten blind humans - a disaster
One million blind humans - a statistic
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
Oslerscodes wrote:
May 5th, 2014 10:50 am
I'd love for you to assure me all of those things (pension, overhead, paid vacations, defined work week) because they have been missing form my compensation package. It may exist for the few hospital employed physicians (medical microbiologists, pathologists, etc.) but certainly not the majority.

My point: there is a major difference between a salary that provides a host of benefits and OHIP/MSP money transferred in a fee for service environment. As the previous post asked why physicians in Europe make 100k and those in Canada make 400k I was pointing out that the net benefit per physician is virtually the same (and presumably the money paid by the state would be the same as well) despite the 4:1 difference alluded to.

I'm not sure the whining you're referring to - just pointing out the truths and trying to provide some insider's context for the numbers thrown around by ignorant commenters.
I'm with you 100% (and not in the medical profession myself). Even if Doctor's earned an equivalent $400k salary, good for them! You go to post secondary for 10 years, work as residents and interns, have massive student loans, spent big dollars setting up a practice while employing highly paid professionals on your staff. You deserve to get paid and have a good lifestyle.

Lawyers and other professions have some similarities, and a few jealous people on here have the gall to think that we would be better off if everyone made the same amount of money, or that high achievers should be taxed until we have a more equal society. To hell with financial equality! You need to have people make the financial and personal sacrifices that top professions require, therefore the people who reach for the brass ring deserve the ring when they put in the work and the risk to reach it!
Deal Expert
Mar 23, 2009
16567 posts
3600 upvotes
Toronto
kashirin wrote:
May 6th, 2014 12:11 am
The truth is that pool of money which is available for doctors doesn't change with a number of doctors but just depends on what Ontario Medical Association negotiates. And that amount usually increases 5-7% per year
they basically are the union for doctors. So of, course they try to prevent entering excessive number of new doctors into the system as that dilute their salaries
so if number of doctors increase their pay will automatically decrease per head
And Ontario Medical Association will do anything to prevent that

So of course, they will make any program look bad that will significantly increase number of doctors in province
so doctors come from countries where healthcare result are on par with Canada but somehow they sub par to practice in Canada
I can safely say you have no idea what you are talking about here.
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
Tig wrote:
May 5th, 2014 1:26 pm
(
fyi CRA is clamping down on single employee corporations (i.e. contractors) paying themselves out with dividends. I don't have the source for this at the moment, but I do recall reading an article about it in 2013.

Anyway, it's kind of moot. If you're earning anywhere near 150K you should be smart enough to mitigate your exposure and if you're not, then you deserve to be taxed in that bracket
Almost every Western country is going in the same direction on this. The UK did this a long time ago. As I have mentioned before, every country with a decent standard of living has a progressive tax system at it's centre. People love to moan about taxes. But the vast majority of them that I have encountered - wealthy or not - understand that this is what makes Canada such a great place to live. Most people moan and put up for it for this reason.
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
michty6 wrote:
May 6th, 2014 9:56 am
Almost every Western country is going in the same direction on this. The UK did this a long time ago. As I have mentioned before, every country with a decent standard of living has a progressive tax system at it's centre. People love to moan about taxes. But the vast majority of them that I have encountered - wealthy or not - understand that this is what makes Canada such a great place to live. Most people moan and put up for it for this reason.
I don't think anyone here was moaning about our progressive tax policy - the problem was a new policy aimed only at upper middle class salary earners. It seems to me that lower income earners think the rich should be taxed more, but the result of any new policy is inevitably that the middle class take the hit, and those in business substantially avoid the hit. Therefore, the populist vote causes the destruction of the middle class that they aspire to join.

What is fair? If the cost of services the average citizen consumes in all government provided forms is say $20k per year (medical, educational, infrastructure, police, social programs - every conceivable service), then what may be fair is that every citizen pays the first $20k of their income to taxes and gets to keep the rest. Everyone pays the same, how fair is that?!

No? Not good enough? OK, so then we pay by percent of income. 25% we will say. So if you earn 20k, you pay 5k, if you earn 40k, you pay 10k, if you earn 100k, you pay 25k, if you earn 400k you pay 100k. What a great deal for the low income person who gets the same amount of service for much much less!

No? Not good enough? So here's where we are, a progressive tax system, where the amount of tax goes up as your income goes up. The idea is that money over the poverty limit is discretionary spending and you can afford to pay a higher amount of tax on that. So if you earn 20k, you pay zero, if you earn 40k you pay 6k...and so on until at 400k you pay 150k. What a fair and egalitarian society we live in! But you know what? At some point you have to acknowledge that the economy is the engine that pays for services we all enjoy. And if you squeeze all of the incentive out of the economy, your most productive people might as well take the day off. Most people will stay, but some will go to where the pastures are less brown. People that are considering moving in will chose a less oppressive tax regime. I could have moved to Quebec, but I couldn't stand the extra taxes or the entitlement mentality that goes with it. Alberta's cold, but those mountains are certainly beautiful!
Deal Addict
User avatar
May 24, 2008
3210 posts
1092 upvotes
Toronto
florch wrote:
May 6th, 2014 10:30 am
I don't think anyone here was moaning about our progressive tax policy - the problem was a new policy aimed only at upper middle class salary earners. It seems to me that lower income earners think the rich should be taxed more, but the result of any new policy is inevitably that the middle class take the hit, and those in business substantially avoid the hit. Therefore, the populist vote causes the destruction of the middle class that they aspire to join.

What is fair? If the cost of services the average citizen consumes in all government provided forms is say $20k per year (medical, educational, infrastructure, police, social programs - every conceivable service), then what may be fair is that every citizen pays the first $20k of their income to taxes and gets to keep the rest. Everyone pays the same, how fair is that?!

No? Not good enough? OK, so then we pay by percent of income. 25% we will say. So if you earn 20k, you pay 5k, if you earn 40k, you pay 10k, if you earn 100k, you pay 25k, if you earn 400k you pay 100k. What a great deal for the low income person who gets the same amount of service for much much less!

No? Not good enough? So here's where we are, a progressive tax system, where the amount of tax goes up as your income goes up. The idea is that money over the poverty limit is discretionary spending and you can afford to pay a higher amount of tax on that. So if you earn 20k, you pay zero, if you earn 40k you pay 6k...and so on until at 400k you pay 150k. What a fair and egalitarian society we live in! But you know what? At some point you have to acknowledge that the economy is the engine that pays for services we all enjoy. And if you squeeze all of the incentive out of the economy, your most productive people might as well take the day off. Most people will stay, but some will go to where the pastures are less brown. People that are considering moving in will chose a less oppressive tax regime. I could have moved to Quebec, but I couldn't stand the extra taxes or the entitlement mentality that goes with it. Alberta's cold, but those mountains are certainly beautiful!
Could you substantiate this some more? Do you have some stats to back this up? I see this argument thrown around all the time in these types of discussions, but there's never a single shred of evidence to back it up. It's the same type of argument that lies behind Hudak's million jobs plan. Just lower corporate taxes and somehow businesses will flood the province with new jobs.

If you take a look at some of Richard Florida's work, you will quickly realize that it doesn't work that way. There are a ton of decisions that go into deciding where to live or set up a business and taxes is just one factor. There are a lot of other quality of living issues that become part of the equation - quality of schools, family/friends nearby, cultural vibrancy just to name a few. For businesses, the general talent pool of workers means a lot in addition to the overall financial picture. Especially for the types of jobs that we do want like professional/creative high-paying jobs. If you just want a million McJobs, then by all means - go down Hudak's path.
Deal Expert
User avatar
Oct 26, 2003
30269 posts
2474 upvotes
Winnipeg
kashirin wrote:
May 5th, 2014 10:51 pm
I don't know if that stats is true but the facts are

my family doctor moved_from_states
my children pediatrician moved_from_states

and they specifically mentioned they moved because money here in Toronto are better

and If you don't know there are several loopholes in tax code which are created specifically for doctors so you can be sure doctors are extremely overpaid here
this is probably the biggest problem with our budget and unless the government doesn't curb their payments taxes will continue to grow for the rest of us
so when the loopholes are closed and dampen their net compensation, they maybe prompted to relocate again, this is what i love about capitalism, talents goes to whoever willing to pay for
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
florch wrote:
May 6th, 2014 10:30 am
I don't think anyone here was moaning about our progressive tax policy - the problem was a new policy aimed only at upper middle class salary earners. It seems to me that lower income earners think the rich should be taxed more, but the result of any new policy is inevitably that the middle class take the hit, and those in business substantially avoid the hit. Therefore, the populist vote causes the destruction of the middle class that they aspire to join.

What is fair? If the cost of services the average citizen consumes in all government provided forms is say $20k per year (medical, educational, infrastructure, police, social programs - every conceivable service), then what may be fair is that every citizen pays the first $20k of their income to taxes and gets to keep the rest. Everyone pays the same, how fair is that?!

No? Not good enough? OK, so then we pay by percent of income. 25% we will say. So if you earn 20k, you pay 5k, if you earn 40k, you pay 10k, if you earn 100k, you pay 25k, if you earn 400k you pay 100k. What a great deal for the low income person who gets the same amount of service for much much less!

No? Not good enough? So here's where we are, a progressive tax system, where the amount of tax goes up as your income goes up. The idea is that money over the poverty limit is discretionary spending and you can afford to pay a higher amount of tax on that. So if you earn 20k, you pay zero, if you earn 40k you pay 6k...and so on until at 400k you pay 150k. What a fair and egalitarian society we live in! But you know what? At some point you have to acknowledge that the economy is the engine that pays for services we all enjoy. And if you squeeze all of the incentive out of the economy, your most productive people might as well take the day off. Most people will stay, but some will go to where the pastures are less brown. People that are considering moving in will chose a less oppressive tax regime. I could have moved to Quebec, but I couldn't stand the extra taxes or the entitlement mentality that goes with it. Alberta's cold, but those mountains are certainly beautiful!
Yeh most of your flawed logic here is why people think the system is not 'fair'. Progressive tax is based on the principle that the people who gain the most from society (take the most out of it - which we measure in $) pay more of it back in. If everybody earned the same (took the same benefits from society) then everybody paying equally (either direct $ or % as in your examples) would be fair. Of course, this is not the case. The lower earners (in your example) are not getting a good deal because the amount of value they are extracting from society is considerably less (even post tax).

If the amount you earned directly correlated to how hard you worked and how much you contributed to society then your system would be 'fair'. Of course, this is also not the case. Some people take out way more than they contribute to society - without progressive tax we would not be recovering this money and our entire society would be worse off. This is because there is a conflict of interest between capitalism and society - often what is best for capitalism (makes a lot of $$$) is not best for society. Progressive taxation (as well as Government regulation) is how we offset this conflict of interest.

Furthermore, quite often people can't contribute on an equal pegging just down to sheer bad luck, the roll of the dice in the game of life. As a progressive, western society we have decided that we still value these people and that people who didn't have such bad luck/started on a higher footing and reap a greater share of the benefits of society should contribute more to society for their rolling a 6 in the game of life.

Finally, as I mentioned, I've got bad news for you. There are very few places in the world (pretty much none) that have the standard of living that we do in Canada that don't have a progressive tax system. This is because of everything I just mentioned. Progressive taxation creates better societies for EVERYONE. Wealthy and non-wealthy. And yes, even in the golden land of Alberta you will be paying progressive tax on your income. Maybe not as much as Ontario due to the resource rich area (for the time being) but you will still be paying progressive income tax.
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
Yeh the argument that talents go to the least oppressive taxation regime is laughable and generally based on one or two personal anecdotes. Often these anecdotes are also flawed and forget that the place these people are moving to also has a progressive tax regime.

Talented people care about standards of living as much as the next person. A great example would be California, which attracts the most talented IT/software professionals in the world. The tax regime there is very aggressive. But the standard of living is also very good by American standards (shock horror - who'd have thought that a progressive tax regime leads to a higher standard of living!). So talented people remain attracted to living and working there.
Deal Expert
Mar 23, 2009
16567 posts
3600 upvotes
Toronto
florch wrote:
May 6th, 2014 10:30 am
I don't think anyone here was moaning about our progressive tax policy - the problem was a new policy aimed only at upper middle class salary earners. It seems to me that lower income earners think the rich should be taxed more, but the result of any new policy is inevitably that the middle class take the hit, and those in business substantially avoid the hit. Therefore, the populist vote causes the destruction of the middle class that they aspire to join.

What is fair? If the cost of services the average citizen consumes in all government provided forms is say $20k per year (medical, educational, infrastructure, police, social programs - every conceivable service), then what may be fair is that every citizen pays the first $20k of their income to taxes and gets to keep the rest. Everyone pays the same, how fair is that?!

No? Not good enough? OK, so then we pay by percent of income. 25% we will say. So if you earn 20k, you pay 5k, if you earn 40k, you pay 10k, if you earn 100k, you pay 25k, if you earn 400k you pay 100k. What a great deal for the low income person who gets the same amount of service for much much less!

No? Not good enough? So here's where we are, a progressive tax system, where the amount of tax goes up as your income goes up. The idea is that money over the poverty limit is discretionary spending and you can afford to pay a higher amount of tax on that. So if you earn 20k, you pay zero, if you earn 40k you pay 6k...and so on until at 400k you pay 150k. What a fair and egalitarian society we live in! But you know what? At some point you have to acknowledge that the economy is the engine that pays for services we all enjoy. And if you squeeze all of the incentive out of the economy, your most productive people might as well take the day off. Most people will stay, but some will go to where the pastures are less brown. People that are considering moving in will chose a less oppressive tax regime. I could have moved to Quebec, but I couldn't stand the extra taxes or the entitlement mentality that goes with it. Alberta's cold, but those mountains are certainly beautiful!
I disagree with the concept of a flat tax myself, and support progressive taxation for income tax. However, proposals like Wynne's tax-the-rich scheme are pretty short-sighted, and frankly just punitive to those high wage earners who dutifully pay their high share of taxes.

You mention $150000 of taxes for someone making $400000. I think that should be re-emphasized. That $150000 number is actually in the right ballpark, even after RRSPs are deducted. The max one could contribute for an RRSP in 2013 was $23820, which meant that with a $400000 income, the net income would be $376180. With those numbers, the income tax is $153722. That represents an overall 38% tax rate.

Now, let's take someone who makes $40000 per year, and maxes out their RRSP contribution room, which is $7200. That makes their net income $32800. The overall Ontario tax on that amount is $4437, or 11% of their overall income.

To put it another way, the person that makes 10X as much pays 35X as much income tax.

BTW, my sister left Quebec for two main reasons:

1. Francophones treating her like crap because she had an anglo accent when she spoke French.
2. High taxes.
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
Little Tim wrote:
May 6th, 2014 10:46 am
Could you substantiate this some more? Do you have some stats to back this up? I see this argument thrown around all the time in these types of discussions, but there's never a single shred of evidence to back it up. It's the same type of argument that lies behind Hudak's million jobs plan. Just lower corporate taxes and somehow businesses will flood the province with new jobs.

If you take a look at some of Richard Florida's work, you will quickly realize that it doesn't work that way. There are a ton of decisions that go into deciding where to live or set up a business and taxes is just one factor. There are a lot of other quality of living issues that become part of the equation - quality of schools, family/friends nearby, cultural vibrancy just to name a few. For businesses, the general talent pool of workers means a lot in addition to the overall financial picture. Especially for the types of jobs that we do want like professional/creative high-paying jobs. If you just want a million McJobs, then by all means - go down Hudak's path.
Consider all of the socialist countries in the world. What is their productivity per person? Compare this to all of capitalist countries. Share your results.

We are a compassionate and fair country. We all enjoy the same government services. How do we generate the revenue to pay for these? Does the money come out of thin air?

If you were an individual or corporation and were required to make a move, would tax rate not factor into the decision? What other wonderful but unique opportunities does Ontario offer compared to other provinces? Do you feel that Ontario does not have to concern itself with being competitive because it's just so darn awesome?

Do you have a problem with people earning a high salary? If the vulnerable of your society share the same security do you still feel that it is necessary to prevent the middle class from thriving?
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
EugW wrote:
May 6th, 2014 11:00 am
I disagree with the concept of a flat tax myself, and support progressive taxation for income tax. However, proposals like Wynne's tax-the-rich scheme are pretty short-sighted, and frankly just punitive to those high wage earners who dutifully pay their high share of taxes.

You mention $150000 of taxes for someone making $400000. I think that should be re-emphasized. That $150000 number is actually in the right ballpark, even after RRSPs are deducted. The max one could contribute for an RRSP in 2013 was $23820, which meant that with a $400000 income, the net income would be $376180. With those numbers, the income tax is $153722. That represents an overall 38% tax rate.

Now, let's take someone who makes $40000 per year, and maxes out their RRSP contribution room, which is $7200. That makes their net income $32800. The overall Ontario tax on that amount is $4437, or 11% of their overall income.

To put it another way, the person that makes 10X as much pays 35X as much income tax.

BTW, my sister left Quebec for two main reasons:

1. Francophones treating her like crap because she had an anglo accent when she spoke French.
2. High taxes.
Thank you. You understand, and I agree myself with progressive tax. But you can go too far.
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
EugW wrote:
May 6th, 2014 11:00 am
I disagree with the concept of a flat tax myself, and support progressive taxation for income tax. However, proposals like Wynne's tax-the-rich scheme are pretty short-sighted, and frankly just punitive to those high wage earners who dutifully pay their high share of taxes.

You mention $150000 of taxes for someone making $400000. I think that should be re-emphasized. That $150000 number is actually in the right ballpark, even after RRSPs are deducted. The max one could contribute for an RRSP in 2013 was $23820, which meant that with a $400000 income, the net income would be $376180. With those numbers, the income tax is $153722. That represents an overall 38% tax rate.

Now, let's take someone who makes $40000 per year, and maxes out their RRSP contribution room, which is $7200. That makes their net income $32800. The overall Ontario tax on that amount is $4437, or 11% of their income.

To put it another way, the person that makes 10X as much pays 35X as much income tax.

BTW, my sister left Quebec for two main reasons:

1. Francophones treating her like crap because she had an anglo accent when she spoke French.
2. High taxes.
I agree with much of what you're saying. Debating the details of a progressive tax system (how much to charge as a %) is completely different to debating whether or not a progressive tax system is 'fair' and should exist. The latter is already pretty much a solved debate, even if people do like to moan about paying taxes...
florch wrote:
May 6th, 2014 11:03 am
Consider all of the socialist countries in the world. What is their productivity per person? Compare this to all of capitalist countries. Share your results.

We are a compassionate and fair country. We all enjoy the same government services. How do we generate the revenue to pay for these? Does the money come out of thin air?

If you were an individual or corporation and were required to make a move, would tax rate not factor into the decision? What other wonderful but unique opportunities does Ontario offer compared to other provinces? Do you feel that Ontario does not have to concern itself with being competitive because it's just so darn awesome?

Do you have a problem with people earning a high salary? If the vulnerable of your society share the same security do you still feel that it is necessary to prevent the middle class from thriving?
1. Depending on your definition of 'socialist' I would say that the more socialist a country the higher it's standard of living. I could easily show you some data to support this. Would love to see some productivity data.
2. As I mentioned in my previous post, you'd be surprised how little tax rate factors into someone's decision as to where to live. Or business decisions. It's usually right there at the bottom, if at all.

Top