Personal Finance

Income Over $150k To Be Heavily Taxed

  • Last Updated:
  • Sep 15th, 2014 8:25 pm
Tags:
None
Deal Addict
User avatar
Dec 31, 2011
2715 posts
967 upvotes
Yellowknife
ItemFinder wrote: You guys just need better accountants.
agree
those making that income have appropriate financial counsel and tax shelters already in place
Banned
User avatar
May 6, 2014
832 posts
155 upvotes
Westmount, QC
Most of them have tax havens overseas anyways ..lol ..they will be saved.

Our politicians are probably one of them with money stashed overseas.
Sr. Member
Apr 6, 2007
506 posts
60 upvotes
JHW wrote: Sure, how about an example that's been in the news lately. The expansion of Target into Canada is widely accepted to have been a huge blunder, that has reportedly cost the company close to a billion dollars. Presumably there was a highly paid marketing / strategy team that put this plan together, and they still got paid (the CEO took the fall for it this week -- and was handsomely compensated with a multi-million dollar package despite being at the helm while billions of dollars of shareholder value was wiped out -- that's another story).

What bothers me more is the blanket statement that high-income earners got that way because of sacrifice and risk. That is usually true of entrepreneurs, but the degree of risk depends on what kind of financial shape they were in to begin with. Someone who inherits a profitable family business certainly doesn't achieve their income through their own sacrifice and risk. Many or most large companies allow employees to move up the ranks without a lot of sacrifice or risk. Probably many more examples out there as well.
Thank you.

Can I counter with another example? We've mentioned doctors, but there are also lawyers, accountants, engineers, vets and many other professions, as well as lots of skilled and semi-skilled workers in the oil field who work in brutal conditions but get a handsome cheque. Do they earn it? Obviously their employers think so, qualified people aren't lining up to do it for less than 6 figures. How about an airline Captain. Usually has a 4 year degree or a 2 year aviation diploma. Pays his dues working docks, or loading airplanes or instructing on small planes, working his way up to bigger planes over years. It might take 10 years or more to get to a major airline, during which time he makes subsistence level pay, unless he finds a good job in another specialized part of the industry. After and if he reaches an airline his pay is now liveable but modest and will be comfortable after a few years. Every different type of airplane he flies will require a super intense 3 month course. Depending on his seniority and growth or retirements in the company, he will eventually become a Captain and be responsible for the airplane he commands - 100, 200, 300 lives and tens of millions of dollars of equipment that goes 500 miles an hour. He puts his license on the line twice a year in recurrent training and simulator testing and once more during an evaluated flight. He also has to maintain a medical and is examined twice a year. At this point he might make close to what his co-pilot and all of the flight attendants make combined. Is he worth that much?
Deal Expert
Mar 23, 2009
18734 posts
4911 upvotes
Toronto
Many people have issues with pay practices in certain parts of the finance industry.

However, even if that is a real issue, not everyone making $150000+ is in finance. In fact, most aren't. Furthermore, many of those making that much in finance aren't getting their entire pay as regular employees anyway, so there are generally more ways for tax avoidance in that context.
Sr. Member
Apr 6, 2007
506 posts
60 upvotes
JHW wrote: Sure, how about an example that's been in the news lately. The expansion of Target into Canada is widely accepted to have been a huge blunder, that has reportedly cost the company close to a billion dollars. Presumably there was a highly paid marketing / strategy team that put this plan together, and they still got paid (the CEO took the fall for it this week -- and was handsomely compensated with a multi-million dollar package despite being at the helm while billions of dollars of shareholder value was wiped out -- that's another story).

What bothers me more is the blanket statement that high-income earners got that way because of sacrifice and risk. That is usually true of entrepreneurs, but the degree of risk depends on what kind of financial shape they were in to begin with. Someone who inherits a profitable family business certainly doesn't achieve their income through their own sacrifice and risk. Many or most large companies allow employees to move up the ranks without a lot of sacrifice or risk. Probably many more examples out there as well.
Executive compensation, and people being rewarded for failing ventures are crazy examples, and I agree, there is not much fairness in this. I just gave examples of people who make it into higher paying jobs that have large barriers to entry. Inheritance or inheriting a business, well that's just the way the wiener rolls I guess, but this too is not the most common way to make lots of money. Of course not everyone who has a high salary goes through the same struggle to get it, but there are many, many who do, and I think they deserve to be rewarded when they succeed. I don't know how to make salaries justified to what people bring to the table, but I don't see why you should punish everyone because some people got a lucky break. People who make from the bottom up within a company may not have the same levels of sacrifice or risk, but they generally must have to do something either to get the job in the first place or to earn their promotions, no? They must have came qualified and started at the bottom, or worked hard, or taken extra courses, or shown some ability to allow them to get to a high station before Peter's Principle kicked in. Who am I to say what they are worth to their company. Obviously someone values their contribution.
Deal Addict
Nov 24, 2004
4097 posts
687 upvotes
Toronto
florch wrote: Can I counter with another example? ...
Sure, your airline pilot example is great, and I have no issue with it. What I object to (as previously mentioned) are the blanket statements that high income is the result of risk / sacrifice / hard work, or that high-income earners get the wages they do because of the value they add.

There are clearly many cases where both of these statements are true, but also a huge number where they are not.
Deal Expert
Mar 23, 2009
18734 posts
4911 upvotes
Toronto
JHW wrote: Sure, your airline pilot example is great, and I have no issue with it. What I object to (as previously mentioned) are the blanket statements that high income is the result of risk / sacrifice / hard work, or that high-income earners get the wages they do because of the value they add.

There are clearly many cases where both of these statements are true, but also a huge number where they are not.
But that is also a meaningless generality. I've dealt with people getting paid $25 or $35 an hour who definitely don't deserve that because they slack off miserably. Should we increase taxes by a large amount in that group making $50000 - $70000 because some of the people working in that group don't deserve what they get paid?

I can tell you though that a lot of people in finance do work horrible hours. I'm not in finance, but I've known those who do. During busy periods they'd be working from 7 am to 9 pm, at least 5 days a week, and sometimes up to 7 days a week. The other aspect of it is that even when they're not working, they often are working. I hated the environment since I'd go to a club or something with my friends in business and finance, only to discover that even there they're "working" as well, entertaining potential clients and financial partners.
Deal Addict
Nov 24, 2004
4097 posts
687 upvotes
Toronto
EugW wrote: But that is also a meaningless generality. I've dealt with people getting paid $25 or $35 an hour who definitely deserve that because they slack off miserably. Should we increase taxes by a large amount in that group making $50000 - $70000 because some of the people working in that group don't deserve what they get paid?
Nowhere have I made an argument about what salaries people "deserve" -- I am only concerned here with refuting the blanket statements, made earlier, that high income is the result of risk / sacrifice / hard work, or that high-income earners get the wages they do because of the value they add.

Note that I am not trying to defend Wynne's tax plan. I think we all agree here (with a couple of exceptions) in the idea of a progressive income tax system. I will leave the discussions about where to set the brackets to others who are more familiar with the numbers than I am.
Sr. Member
Apr 6, 2007
506 posts
60 upvotes
JHW wrote: Nowhere have I made an argument about what salaries people "deserve" -- I am only concerned here with refuting the blanket statements, made earlier, that high income is the result of risk / sacrifice / hard work, or that high-income earners get the wages they do because of the value they add.

Note that I am not trying to defend Wynne's tax plan. I think we all agree here (with a couple of exceptions) in the idea of a progressive income tax system. I will leave the discussions about where to set the brackets to others who are more familiar with the numbers than I am.
OK, I can agree that not everyone gets what they deserve and some get too much. But without risking a blanket statement ;) most entities (people or corporations) won't accept less or give more than they have to. So artificial means of wage suppression or successful union actions aside, supply and demand play into compensation. Since people like money, they will compete for the best jobs. The reason you are able to obtain and hold a great job is because you were the best person available on the day they hired, and the compensation is the minimum required to attract someone who is both willing and able to handle that job. In theory, and theory isn't practice - but it leads in the right direction. Of course there are exceptions, but business has to keep going and can't screw around with minutia, so it makes a decision and moves ahead.
Newbie
Jun 13, 2013
18 posts
2 upvotes
Victoria
It depends how the expenses are used. if your company flies you to Paris for work, its their perogative to fly you in a private jet if they choose or put you up in the Ritz. But if you earn a benefit, its a taxable benefit.

you could earn stock options in the company, and then just pay capital gains tax when you exercise the stocks and make money from their sale.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)