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
Apr 6, 2007
506 posts
58 upvotes
michty6 wrote:
May 6th, 2014 10:54 am
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.
High income earners don't take more from society, they give more to society. They earn more because they produce more. They sacrificed and risked more, and if they're successful they earn more. But they take only the same as everyone else. I just stated, I agree with progressive tax, but you have to leave some incentive on the table.

I know dozens of people who have left to the UAE. Anecdotal yes, but they didn't go there for the sun and sand. They are going where they can earn the same amount of money and pay little to no tax. These are some of your most productive people. Of course we can't compete with those resources, put this is the example in the extreme.

I'm arguing a point that doesn't even affect me today. But I aspire to be upper middle class, so I'd like to have my efforts rewarded.
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
michty6 wrote:
May 6th, 2014 11:10 am
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...



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.
United States.
Czech Republic - middle class earnings and lifestyle there probably doesn't approach lower class in the US.

Go to town.

Government shouldn't burden itself too much with dividing the pie. That seems to take care of itself. A rising tied raises all boats, so what we should be doing is trying to bake a bigger pie, if you follow my mixed metaphors. That helps the working lower class the most.
Deal Expert
Mar 23, 2009
16556 posts
3585 upvotes
Toronto
BTW, for someone making $40000 to hit that 38.4% income tax rate that a $400000 earner pays, would mean that they'd have to be paying over $15360 in taxes, or almost $11000 more than that $4437 number I listed.

It'd be pretty remarkable to be able to pay $11000 per year in sales and property taxes in that income range. However, even then the $40000 earner would not be at the same overall taxation percentage as the high income earner, because that high income earner would be paying sales and property tax too.
Sr. Member
Jan 30, 2013
701 posts
100 upvotes
RICHMOND HILL
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
Were they on J1 visa unable to remain in the USA.Are there law suits pending? I would check these things out if i were u
Just an anecdote,my friend ophth advertized for assistant ophth. the applicant sounded good on paper till his malpractice suits shows up on a background check. I know of a US citizen cardio who came to the Great White North cos of marriage to a Canuck.
A lot of divorcee also comes the Canadian way to avoid law suits,garnishees or to other countries
also draft dodgers as you well know though rare nowadays
Deal Expert
Mar 23, 2009
16556 posts
3585 upvotes
Toronto
michty6 wrote:
May 6th, 2014 11:10 am
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...
It seems the vast majority in this thread who oppose Wynne's tax grab do support progressive taxation. So what are you arguing against then?

The bottom line is you seem think it's a good tax. That's fine, but don't paint the people who oppose it as flat-tax advocates or anti-progressive taxation. That's simply not true.

Like I said before, I support progressive taxation, but I oppose excessive taxation. Wynne's budget is excessive.
Deal Expert
User avatar
Oct 26, 2003
30238 posts
2467 upvotes
Winnipeg
michty6 wrote:
May 6th, 2014 10:59 am
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.
ah california, with its nice beach and all year around weather, it certainly adds to the package, what does toronto have? if you can't leverage on the environment or something else, then all that's left to attract talents is money.
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
florch wrote:
May 6th, 2014 11:15 am
High income earners don't take more from society, they give more to society. They earn more because they produce more. They sacrificed and risked more, and if they're successful they earn more. But they take only the same as everyone else. I just stated, I agree with progressive tax, but you have to leave some incentive on the table.

I know dozens of people who have left to the UAE. Anecdotal yes, but they didn't go there for the sun and sand. They are going where they can earn the same amount of money and pay little to no tax. These are some of your most productive people. Of course we can't compete with those resources, put this is the example in the extreme.

I'm arguing a point that doesn't even affect me today. But I aspire to be upper middle class, so I'd like to have my efforts rewarded.
Yeh this is some of the same flawed logic that I talked about before: the idea that there is a perfect correlation between production and earnings or risk and earnings. Capitalism is a great system. But if you think it only rewards those who positively contribute to society then you are thinking wrong.

Furthermore, part of the reason someone is willing to take risks in certain capitalist societies over others is because of the benefits in that society which progressive tax created, not in spite of it (better infrastructure, Government regulation, Government grants and support, higher standard of living etc). Consider whether or not you'd take the risks necessary to start a business in Nigeria or Canada. What is it about one country that would lead you to take a risk over the other?

On the anecdote train, I also had friends who moved to and worked in the UAE (usually people who work in the energy sector). Not one is still there. Most lasted a year or two and have now returned to Canada or the UK. Tax savings weren't enough to make up for the loss of the standard of living and other societal benefits available in Canada/the UK.
florch wrote:
May 6th, 2014 11:17 am
United States.
Czech Republic - middle class earnings and lifestyle there probably doesn't approach lower class in the US.

Go to town.

Government shouldn't burden itself too much with dividing the pie. That seems to take care of itself. A rising tied raises all boats, so what we should be doing is trying to bake a bigger pie, if you follow my mixed metaphors. That helps the working lower class the most.
Not sure what analysis you want me to make here on these 2 countries? Standard of living? Productivity? Or the nature of their progressive tax systems? :)
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
divx wrote:
May 6th, 2014 11:40 am
ah california, with its nice beach and all year around weather, it certainly adds to the package, what does toronto have? if you can't leverage on the environment or something else, then all that's left to attract talents is money.
As someone who is an immigrant and moved to Toronto I can vouch that money is absolutely not why I moved here. Nor was it even a consideration. Neither was my move anything related to taxes. As I've mentioned, way, way, way more factors go into the decision of where someone will live than money or taxes. I get that on a money-saving forum this concept might be hard to grasp though ;)
Deal Fanatic
Mar 24, 2008
5617 posts
1714 upvotes
Toronto
michty6 wrote:
May 6th, 2014 11:43 am
As someone who is an immigrant and moved to Toronto I can vouch that money is absolutely not why I moved here. Nor was it even a consideration. Neither was my move anything related to taxes. As I've mentioned, way, way, way more factors go into the decision of where someone will live than money or taxes. I get that on a money-saving forum this concept might be hard to grasp though ;)
Did you have a choice between California (say San Francisco) and Toronto? If you did and you chose Toronto, then you may have a point. Given the choice, most people would go for San Francisco.
Deal Expert
User avatar
Oct 26, 2003
30238 posts
2467 upvotes
Winnipeg
michty6 wrote:
May 6th, 2014 11:43 am
As someone who is an immigrant and moved to Toronto I can vouch that money is absolutely not why I moved here. Nor was it even a consideration. Neither was my move anything related to taxes. As I've mentioned, way, way, way more factors go into the decision of where someone will live than money or taxes. I get that on a money-saving forum this concept might be hard to grasp though ;)
actually i understand your view perfectly, it is matter of standard of living, but its major contributing factor is money & environment, and by money I mean net income, so tax can be high as long as the pay rate is also high, and by environment I don't just mean the weather, it also accounts for local social structure, support system, etc.
Deal Expert
User avatar
Oct 26, 2003
30238 posts
2467 upvotes
Winnipeg
ksgill wrote:
May 6th, 2014 11:46 am
Did you have a choice between California (say San Francisco) and Toronto? If you did and you chose Toronto, then you may have a point. Given the choice, most people would go for San Francisco.
of course, if all else is equal any sane person would see San Fran as a nicer place to live.
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
michty6 wrote:
May 6th, 2014 11:40 am
Yeh this is some of the same flawed logic that I talked about before: the idea that there is a perfect correlation between production and earnings or risk and earnings. Capitalism is a great system. But if you think it only rewards those who positively contribute to society then you are thinking wrong.

Furthermore, part of the reason someone is willing to take risks in certain capitalist societies over others is because of the benefits in that society which progressive tax created, not in spite of it (better infrastructure, Government regulation, Government grants and support, higher standard of living etc). Consider whether or not you'd take the risks necessary to start a business in Nigeria or Canada. What is it about one country that would lead you to take a risk over the other?

On the anecdote train, I also had friends who moved to and worked in the UAE (usually people who work in the energy sector). Not one is still there. Most lasted a year or two and have now returned to Canada or the UK. Tax savings weren't enough to make up for the loss of the standard of living and other societal benefits available in Canada/the UK.



Not sure what analysis you want me to make here on these 2 countries? Standard of living? Productivity? Or the nature of their progressive tax systems? :)
I'd invest in Canada, because it less corrupt, despite the attempts of the Ontario liberals of this decade and the Federal Liberals of the last. I love our social benefits, and I love that it is available for everyone. Where it goes too far is when there is more incentive to stay home than to work, or when you don't get outstanding rewards for outstanding efforts. Of course their are flaws to capitalism, just like there is to any system, but as a whole, a hybrid system that leaves incentives for work and creativity is the best option.

Now, who made who? Did the social benefits create the economic benefits, or did the economic benefits pay for the social benefits that attracted more people and business. I don't want a bigger piece of the pie, I want us all to have more pie.

As for the analysis on those 2 countries, all of the above please. I'd like to have as comprehensive an analysis as possible. Please report back in 2 weeks when you've finished it! :)
Deal Expert
Mar 23, 2009
16556 posts
3585 upvotes
Toronto
michty6 wrote:
May 6th, 2014 11:43 am
As someone who is an immigrant and moved to Toronto I can vouch that money is absolutely not why I moved here. Nor was it even a consideration. Neither was my move anything related to taxes. As I've mentioned, way, way, way more factors go into the decision of where someone will live than money or taxes. I get that on a money-saving forum this concept might be hard to grasp though ;)
Well, my siblings and I grew up in Canada. Yes, taxation rates are definitely a consideration on where to move, but of course it's not the only reason. When income tax rates are average (pre-Wynne Ontario), it's not as big of a deal, but when income tax rates are high (eg. Quebec), then it becomes more of a consideration.

Yes, a lot of immigrants move to Toronto, because it is a very metropolitan city and a lot of immigrant groups are well-represented in Toronto. However, when you grow up in Canada, that may be less important. Heck, the mayor of Calgary is a visible minority born in Toronto who loves it there in Calgary.
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
EugW wrote:
May 6th, 2014 11:32 am
It seems the vast majority in this thread who oppose Wynne's tax grab do support progressive taxation. So what are you arguing against then?

The bottom line is you seem think it's a good tax. That's fine, but don't paint the people who oppose it as flat-tax advocates or anti-progressive taxation. That's simply not true.

Like I said before, I support progressive taxation, but I oppose excessive taxation. Wynne's budget is excessive.
Well actually this is precisely what people have been arguing: that progressive tax will lead to disaster for the society. It won't. Or that people will move for the flat-tax shores of Alberta. They won't. As far as I can see there have been plenty of people making the well used argument that progressive tax isn't 'fair' on the wealthier in society...

With regards to the actual proposal, I think given the amount of infrastructure investment needed in Ontario (Toronto in particular) and that this is what it is being spent on it's not too excessive. I might not have started it at $150k, maybe $250k. Furthermore, I think the return on investment in infrastructure investing will make everyone considerably better off in the long run (wealthy will get wealthier). Finally, for decades now tax rates have done nothing but come down. At the same time, infrastructure became worn and dated with very little improvements. So I'm not totally against a shift upwards in tax rates. What people totally forget is that we're not even close to the rates of years gone by. We're only partially restoring tax cuts that people were given before. However, a tax increase is never framed in this light!

Also I think what people are most upset at is that this particular provincial Government who proposed this wasted a tonne of money and that they perhaps do not trust them to actually spend the money on infrastructure...
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
ksgill wrote:
May 6th, 2014 11:46 am
Did you have a choice between California (say San Francisco) and Toronto? If you did and you chose Toronto, then you may have a point. Given the choice, most people would go for San Francisco.
divx wrote:
May 6th, 2014 11:47 am
actually i understand your view perfectly, it is matter of standard of living, but its major contributing factor is money & environment, and by money I mean net income, so tax can be high as long as the pay rate is also high, and by environment I don't just mean the weather, it also accounts for local social structure, support system, etc.
divx wrote:
May 6th, 2014 11:48 am
of course, if all else is equal any sane person would see San Fran as a nicer place to live.
Haha well I've been to San Fran and I love it. It would definitely be up there in American cities I'd choose to live in. But I love Toronto too and I'm pretty happy with my choice. If California broke away from the rest of the States then I would consider it more! FWIW Toronto is the 7th city I've lived in across 4 different countries...
florch wrote:
May 6th, 2014 11:50 am
I'd invest in Canada, because it less corrupt, despite the attempts of the Ontario liberals of this decade and the Federal Liberals of the last. I love our social benefits, and I love that it is available for everyone. Where it goes too far is when there is more incentive to stay home than to work, or when you don't get outstanding rewards for outstanding efforts. Of course their are flaws to capitalism, just like there is to any system, but as a whole, a hybrid system that leaves incentives for work and creativity is the best option.

Now, who made who? Did the social benefits create the economic benefits, or did the economic benefits pay for the social benefits that attracted more people and business. I don't want a bigger piece of the pie, I want us all to have more pie.

As for the analysis on those 2 countries, all of the above please. I'd like to have as comprehensive an analysis as possible. Please report back in 2 weeks when you've finished it! :)
Yeh I agree with everything you are saying here, definitely valid points.

And I've got lots of other analysis that I'm being paid to do unfortunately ;) !
EugW wrote:
May 6th, 2014 11:52 am
Well, my siblings and I grew up in Canada. Yes, taxation rates are definitely a consideration on where to move, but of course it's not the only reason. When income tax rates are average (pre-Wynne Ontario), it's not as big of a deal, but when income tax rates are high (eg. Quebec), then it becomes more of a consideration.

Yes, a lot of immigrants move to Toronto, because it is a very metropolitan city and a lot of immigrant groups are well-represented in Toronto. However, when you grow up in Canada, that may be less important. Heck, the mayor of Calgary is a visible minority born in Toronto who loves it there in Calgary.
I'm pretty sure tax rates just now are no where near all time highs, like not in the same ballpark (Federal and Provincial). Look back a few decades...

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