The 1% earn 10% of income, pay 20% of taxes

[sdw]

http://www.cbc.ca/news/business/canada-rich-1-tax-income-1.3301268

New
Canada's richest 1% earned $454,800 average in 2013 and paid $151,900 in tax
1 per cent of the country earned 10.3 per cent of the income in 2013, same as previous year's level

CBC News Posted: Nov 03, 2015 9:43 AM ET Last Updated: Nov 03, 2015 9:59 AM ET

Canada's richest one per cent of tax return filers saw their share of the country's total income remain the same in 2013 and their average total income grow by the same amount as everyone else's.

Statistics Canada reported Tuesday that the top one per cent of tax filers received 10.3 per cent of the nation's total income in 2013, the same amount as the previous year.

To be considered in the top one per cent of tax filers, a worker had to earn $222,000 in 2013. That group included 264,030 people across the country.

To be included in the top five per cent, the income cutoff was $115,700, while to be in the top 10 per cent required $89,200.

The average income for a member of Canada's one per cent was $454,800 — an increase of $5,600 compared to the previous year.

The average one percenter paid $151,900 in income taxes that year, an increase of $3,000.

The top one per cent of tax filers paid 20.3 per cent of federal and provincial/territorial income taxes in 2013, unchanged from the previous year.

Women made up 21.9 of Canada's top one per cent of tax filers in 2013, a percentage that has increased for 20 consecutive years.

Across the country:

Ontario had the most members of the one per cent at 41.2 per cent of the total, or 108,830 people.
Alberta was next at 23.6 per cent.
Quebec had 15.5 per cent.
British Columbia was at 11.3 per cent.

With combined Federal and Provincial Taxes, the 1% are already paying 33% of their income in taxes. Since it can be assumed that every "Tax Loophole" IS being used by the 1%, it doesn't look like there is a whole lot of additional tax income that can be generated. One only has to look at what happened in Britain when the government moved taxes to 87% on very high income earners. The wealthy simply moved to India and Australia for tax purposes.

 

[LLLurkJ2]

87 %!!! when are they raising the rates to this level?

 

[Jethro Bodine]

Woohoo! I'm in the top 5%. :thumb:

 

[McDiver]

It would be interesting to see how many of the 1% hold government jobs where the taxpayers are paying for their big salaries.

 

[sdw]

87 %!!! when are they raising the rates to this level?

That was the Tax Rate in England during the 1960s and 1970s. What I remembered is that The Beatles left the British Islands and actually have a song about it.

http://www.againstcronycapitalism.o...es-dealt-with-a-98-income-tax-thats-right-98/

The top rate for British taxpayers in the mid-1960s reached 83 percent. The wealthiest among them paid a 15 percent super-tax on top of that, pushing taxes as high as 98 percent. The pain came out in the band’s music. George Harrison opened his 1966 song “Taxman”:

Let me tell you how it will be.
That’s one for you, 19 for me…
Should 5 percent appear too small,
Be thankful I don’t take it all.

As Lennon and McCartney racked up hits with their compositions in 1963 and 1964 — “Please Please Me,” “From Me to You,” “I Want to Hold Your Hand,” “She Loves You,” to name a few — and money started pouring in, it became clear that the songwriting profits would be siphoned away to the U.K.’s treasury if something wasn’t done.

There is also a Wikipedia article on it. https://en.wikipedia.org/wiki/History_of_taxation_in_the_United_Kingdom

In 1971 the top rate of income tax on earned income was cut to 75%. A surcharge of 15% kept the top rate on investment income at 90%.In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98%, the highest permanent rate since the war. This applied to incomes over £20,000 (£186,150 as of 2015),[7]. In 1974 750,000 people were liable to pay the top-rate of income tax.[16]

Margaret Thatcher, who favoured indirect taxation, reduced personal income tax rates during the 1980s.[17] In the first budget after her election victory in 1979, the top rate was reduced from 83% to 60% and the basic rate from 33% to 30%.[18] The basic rate was also cut for three successive budgets - to 29% in the 1986 budget, 27% in 1987 and to 25% in 1988.[19] The top rate of income tax was cut to 40% in the 1988 budget. The investment income surcharge was abolished in 1985.

It must be remembered that the post war year governments in the West had a "Socialist" view towards taxing people with high incomes. With Proposition 13 in California (1978) the world realized that you could vote against high taxes - which is how Margaret Thatcher and Ronald Reagan came to be elected with their promises to reduce taxes.

IMHO voters have gone too far with reducing taxes on people that can easily afford to pay more and we need to return to the tax levels of the late 1980s - early 1990s. The tax rate that the 1% would have been paying then is 66.6%. That was on investment incomes of over $200,000 per year.

 

[blowjob]

Did the liberal say gonna raise tax on this 1%? What about in between $200,000 to $430,000?

 

[BofSea]

So 99% of the people pay 80% of the taxes---Sounds to me like they need to step up and pay more ?

 

[rexxx]

Did the liberal say gonna raise tax on this 1%? What about in between $200,000 to $430,000?

$222,000 makes you a 1%er

 

[wilde]

The proposed increase for the margin tax for the new $200k top bracket is only 3%, which is chump change for the 1 percenter. The highest marginal combined federal and provincial tax bracket in Canada since I became an accountant is 53% and that was in Quebec. So if you are worried about 87% then don't...

 

[wilde]

What sdw's post fails to mention is what percentage of the wealth the 1% own, I'd bet it is a lot more than 20%.

 

[sdw]

What sdw's post fails to mention is what percentage of the wealth the 1% own, I'd bet it is a lot more than 20%.

I think I put up a thread on that. The 1% own close to 50% of the world's wealth. Found the article here http://fortune.com/2015/10/14/1-percent-global-wealth-credit-suisse/

also http://www.cbc.ca/news/business/credit-suisse-world-wealth-report-1.3270056

The concentration of wealth is entirely due to the current tax rates and interest structure. An article on who's buying and bidding up the price of houses puts the blame on the banks who are lending the money. It turns out that "bags of money" aren't responsible. It's banks giving preferential treatment to offshore accounts where it's easier to be "creative" with the actual value of assets. http://www.theprovince.com/business...+buyers+market+study+says/11485289/story.html http://www.theglobeandmail.com/repo...on-vancouvers-luxury-housing/article25932534/

What is clear is that Canada is beginning to see what were called "liars loans" in 2008 - 2009 when the world's financial health was taken down by bank's greed.

If you look at WHEN the world's wealth began to be concentrated in what we call the 1%, it followed the tax revolution ushered in by Margaret Thatcher and Ronald Reagan. Ever since then, the world's central banks and governments have been under pressure to reduce taxes and reduce the cost of borrowing money.

A big reason that taxes were high 1950 - late 1970s was that the world was still paying for WWII. It wasn't until governments started doing mega projects of dubious value that the tax payer started to question the amount they were paying in taxes. We have 3 or 4 Diefenbunkers in the Lower Mainland. The governments didn't want to reduce taxes because it's difficult to raise taxes if you need to. So, they found mega projects to eat up the huge cash surplus they had.

The concentration of the world's wealth isn't because of high earnings - yes the wealthy 20% of total taxes on 10% of total income. However, the wealthy also have enough so that they easily qualify for loans for things that only become a capital gain when they are sold.

I would argue that 60% or more of the 1%'s wealth is in capital investment that is only taxable when sold. That's why the seller's market on commercial real estate recently.

 

[apl16]

The real problem is low corporate taxes and royalty rates. Harper and corporate Christy are their minions

 

[sdw]

I think I put up a thread on that. The 1% own close to 50% of the world's wealth. Found the article here http://fortune.com/2015/10/14/1-percent-global-wealth-credit-suisse/

also http://www.cbc.ca/news/business/credit-suisse-world-wealth-report-1.3270056

The concentration of wealth is entirely due to the current tax rates and interest structure. An article on who's buying and bidding up the price of houses puts the blame on the banks who are lending the money. It turns out that "bags of money" aren't responsible. It's banks giving preferential treatment to offshore accounts where it's easier to be "creative" with the actual value of assets. http://www.theprovince.com/business...+buyers+market+study+says/11485289/story.html http://www.theglobeandmail.com/repo...on-vancouvers-luxury-housing/article25932534/

What is clear is that Canada is beginning to see what were called "liars loans" in 2008 - 2009 when the world's financial health was taken down by bank's greed.

If you look at WHEN the world's wealth began to be concentrated in what we call the 1%, it followed the tax revolution ushered in by Margaret Thatcher and Ronald Reagan. Ever since then, the world's central banks and governments have been under pressure to reduce taxes and reduce the cost of borrowing money.

A big reason that taxes were high 1950 - late 1970s was that the world was still paying for WWII. It wasn't until governments started doing mega projects of dubious value that the tax payer started to question the amount they were paying in taxes. We have 3 or 4 Diefenbunkers in the Lower Mainland. The governments didn't want to reduce taxes because it's difficult to raise taxes if you need to. So, they found mega projects to eat up the huge cash surplus they had.

The concentration of the world's wealth isn't because of high earnings - yes the wealthy 20% of total taxes on 10% of total income. However, the wealthy also have enough so that they easily qualify for loans for things that only become a capital gain when they are sold.

I would argue that 60% or more of the 1%'s wealth is in capital investment that is only taxable when sold. That's why the seller's market on commercial real estate recently.

This morning I happened on this article as I did my morning surf:
http://www.cbc.ca/news/business/home-capital-mortgage-1.3305242

Alternative mortgage lender Home Capital Group saw the value of its new mortgage originations decline by 15 per cent last quarter and said the cost of loans tied to an exiled group of brokers is almost twice as much as first reported.

The company said the value of its uninsured single-family residential originations was $1.51 billion in its most recent quarter, which ended Sept. 30. That's up from the summer's level, but down by 15 per cent from where it was in the same period a year ago.

The company also signed $416 million worth of insured loans, a figure that declined 20 per cent from the same period a year ago.

Home Capital was thrust into the spotlight over the summer when it revealed it had cut ties with several dozen mortgage brokers for falsifying income details about borrowers.

At the time, Home Capital said those brokers had brought in about $960 million worth of loans, about five per cent of the company's total loan book.

On Thursday, the company revealed that at the end of June, the value of loans that originated from those brokers was actually more than twice that —$1.93 billion. But by the end of the most recent quarter, that figure had declined to $1.72 billion and the company "expects this balance to decline as customers pay down loans."

The company said its investigation into the issue is ongoing about a quarter over, and expects it to be finished some time in 2016. It is currently in the process of reviewing "income documentation" for all of the borrowers thought to be in the problematic group and "taking corrective action accordingly."

Home Capital also said: "Of the accounts reviewed, the company has determined that over 90 per cent of the mortgages reviewed to date could be eligible for renewal."

Overall, the company's earnings fell 1.8 per cent to $72.4 million, or $1.03 a share. The company also maintained its dividend at 22 cents per share.

So, it's confirmed, we have a lot of "Liar's Loans" in the system that have artificially increased the price of Real Estate. From what Home Capital has found, at least 10% of loans "overstate" the borrower's income.

 

[LM987]

Let me check the math
$151,900 in taxes on $454,800 income, let's see, division, carry the ONE, subtract.... = 33.399%