One of Michael James’ favorite groups is Motorhead. He especially enjoys their song called Eat the Rich. Given the latest discussions about how Wealthy Canadians should pay more taxes, put me in mind that song. Why tax the rich, let’s just eat them and be done with having to worry about them? Eat the Rich?
I am being facetious, but for Canadians to complain that anyone is not paying enough taxes is quite amusing. In the U.S., Wealthy Americans don’t pay a lot of taxes. Most Americans (compared to a Canadian with similar income) also pay less taxes. As Canadians, we are already highly taxed (and may be taxed further very soon). Increasing the taxes on the top 1% of Canadians seems a little excessive.
As mentioned in TFSA limits don’t rise again, the marginal tax rate for Canadians in the highest tax bracket is 29%. This is on the Federal level, and then you have Provincial tax on top of that, and that rate kicks in at an income of $132,406 for 2012. The rate of money earned above this (in Ontario, at least) is around 43%. This is pretty darn high; I’m not sure how folks can argue this rate should somehow be higher.
Many people espousing this increased tax load on wealthy Canadians seem to think we should tax folks across the board. However, many of the folks deemed “wealthy” have only large retirement savings and are not that well off right now. If you look at me as a Civil Servant with the current pension system, I can be construed in some ways as being wealthy, when in fact, I don’t have any of this wealth available to me (until I retire), but I hear folks spewing bile about how I am a rich civil servant because of my pension. I can assure you, I do not feel that wealthy right now, even with my “gold-plated federal pension” (to quote a few of the media wags out there).
The answer is not taxing folks into a financial black hole. The better answer is to get the economy working well. That way, the Government can keep income levels up from all those happy working Canadians paying tax and such, not try to get the Westin Family to pay higher taxes on their Millions (or is it Billions now?).
“There is no such thing as a good tax” Winston Churchill
The 43% marginal tax rate in Ontario kicks in at about $85,000, above $132,000 it is 46%. Got to get the money to pay those civil servant salaries from somewhere :).