Personal Finance

Income Over $150k To Be Heavily Taxed

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  • Sep 15th, 2014 8:25 pm
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Deal Expert
Mar 23, 2009
17326 posts
4073 upvotes
Toronto
Effectively they've introduced a new marginal tax class. It should be noted that those making over $136000 per year are already in the 46% tax bracket. Ouch. With the new $150000 tax, I wonder how high they'll push it. If significant, it could make Ontario a province with one of the highest income tax rates in Canada.

In contrast, someone who gets paid $75000 per year pays 33% in taxes, and somebody who gets paid $40000 per year pays 20% in taxes.
Deal Fanatic
Mar 24, 2008
5923 posts
2107 upvotes
Toronto
ksgill wrote: I wish I had to pay $1 million in taxes... wouldn't that be nice? On topic, the concept of marginal tax rates is just lost on some people.
michty6 wrote: I don't know what you mean. I plan on being paid $149,999 so I can pay no taxes :D
Let me rephrase: how much money do I have to make in a year to pay $1 million in taxes? I'd rather be in that situation than make $149,999 as you suggest. And you have it all wrong if you think you'll pay no taxes on that amount.
Deal Expert
Mar 23, 2009
17326 posts
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Toronto
I think it's an argument of a matter of degree. I agree with the concept of progressive taxation. Those at higher income levels can pay more percentage wise. However, an income tax bracket of 46.41% in Ontario is already fairly high, yet the Ontario Liberals want to push it even higher.
Deal Fanatic
Mar 24, 2008
5923 posts
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Toronto
EugW wrote: I think it's an argument of a matter of degree. I agree with the concept of progressive taxation. Those at higher income levels can pay more percentage wise. However, an income tax bracket of 46.41% in Ontario is already fairly high, yet the Ontario Liberals want to push it even higher.
It's all bull***t and it's bad for ya! I wouldn't mind a simpler tax code that doesn't allow loopholes that allow corporations to get away with paying minimal tax while salaried people end up paying higher taxes.
Deal Expert
Mar 25, 2005
21394 posts
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ksgill wrote: Let me rephrase: how much money do I have to make in a year to pay $1 million in taxes? I'd rather be in that situation than make $149,999 as you suggest. And you have it all wrong if you think you'll pay no taxes on that amount.
Once you get into the 500k range, average tax starts to approach marginal tax, in Ontario thats 46.41%. So rounding that off to 50%, to pay 1MM in tax you're earning 2MM net income.
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Jun 28, 2007
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The budget has actually got to be passed by the house to happen - given that the Libs have a minority - most think it won't and this could trigger an election...
Deal Fanatic
Mar 24, 2008
5923 posts
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Toronto
Kasakato wrote: Once you get into the 500k range, average tax starts to approach marginal tax, in Ontario thats 46.41%. So rounding that off to 50%, to pay 1MM in tax you're earning 2MM net income.
And how much better would that be as compared to makes less in hopes of not paying tax? I would rather make 2 Million + and pay a hefty tax then make less money just to avoid taxes.
Deal Addict
Aug 19, 2013
2397 posts
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Gammatron wrote: There has been a leak of tomorrow's budget. 3 things will be heavily taxed, cigarrettes, avionic fuel and incomes over $150,000.

Can a person just negotiate with the boss and tell him to pay him $1 wage a year and put the rest of the $149,999 dollars in an expense account to avoid paying the tax just like Apple's Steve Jobs did and the way Rogers CEO does? Its completely legal by the way all these rich CEO's get paid.

What will your boss lose to do this favor for you?

No you can't have them put money into an expense account to avoid taxes. Anything that the company pays for on your behalf that is not an expense directly related to your job (for example business related travel) is considered a benefit. Any benefits received from your employer are added to your income.
Deal Expert
Mar 25, 2005
21394 posts
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ksgill wrote: And how much better would that be as compared to makes less in hopes of not paying tax? I would rather make 2 Million + and pay a hefty tax then make less money just to avoid taxes.
If I were making 2MM, I'd hope I have enough control over compensation to not be paid 2MM in income.
Deal Addict
Aug 19, 2013
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Kasakato wrote: If I were making 2MM, I'd hope I have enough control over compensation to not be paid 2MM in income.
I saw a t4 slip for $5,000,000 once. That's crazy.
Deal Expert
Mar 23, 2009
17326 posts
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Toronto
ksgill wrote: It's all bull***t and it's bad for ya! I wouldn't mind a simpler tax code that doesn't allow loopholes that allow corporations to get away with paying minimal tax while salaried people end up paying higher taxes.
They've started to move in that direction, and it's about time. The tax advantage of dividends for single-person corporations is close to zero now, unless you income split by paying multiple shareholders dividends. However, this was a federal move of course.

P.S. I could see myself supporting this new $150000 marginal tax bracket... if the Ontario government removed that punitive employee health tax (EHT) for all employees. But they won't do it.
Member
Nov 25, 2011
422 posts
61 upvotes
201-8 Sampson Mews, …
ksgill wrote: Let me rephrase: how much money do I have to make in a year to pay $1 million in taxes? I'd rather be in that situation than make $149,999 as you suggest. And you have it all wrong if you think you'll pay no taxes on that amount.
Haha I was actually only joking in reference to some of the posts in here.

I would guess that to pay $1m in taxes you'd have to be earning in the region of $2.1-2.2m
Sr. Member
Feb 5, 2013
592 posts
109 upvotes
I guess the Maple Leafs, and any other truly competitive industry, will have a harder time signing those 'free agents'.
Deal Addict
Jan 5, 2006
1434 posts
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Midtown Toronto
Kasakato wrote: If I were making 2MM, I'd hope I have enough control over compensation to not be paid 2MM in income.
If you're working for someone else, you get what you get.
Deal Fanatic
May 1, 2012
9068 posts
7383 upvotes
Markham
Gammatron wrote: There has been a leak of tomorrow's budget. 3 things will be heavily taxed, cigarrettes, avionic fuel and incomes over $150,000.

Can a person just negotiate with the boss and tell him to pay him $1 wage a year and put the rest of the $149,999 dollars in an expense account to avoid paying the tax just like Apple's Steve Jobs did and the way Rogers CEO does? Its completely legal by the way all these rich CEO's get paid.

What will your boss lose to do this favor for you?
I am fairly certain that income gets taxed in brackets. It would be stupid to ask for a pay cut...

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