Canada's business taxes 2nd highest

[Montgomery Burns]

Canada taxes business investment more heavily than any other competing nation except China—and taxes on Canadians’ personal investment income can reach 80%, according to a study released yesterday.  The findings underscore the need for a dramatic overhaul of the tax system to cope with growing competition from Asia and an ageing population, the C.D. Howe Institute said.

“Given the competitive and demographic challenges facing Canada, tax reform is increasingly urgent,” Jack Mintz, president of the institute, said in the report. “In the coming years, Canada should not simply react to changes in tax policy abroad, but should take the initiative and adopt policies that would unleash the Canadian tiger.”

The institute said federal and provincial governments should develop a five-year plan to lower taxes, broaden the tax base and shift taxes from investment and savings toward consumption.   Canada’s marginal effective tax on business capital—combining such things as depreciation deductions together with capital and corporate tax rates—averaged 39% in 2005, the second-highest among 36 industrial and leading developing countries. [...]

Ouch

Please give us business people tax relief. We contribute something very important to society. We contribute J-O-B-S - which creates more tax revenue, and the more successful we are, the more taxes we pay. We have to stay competitive on the global market and our powerful next door neighbor has a president who has cut taxes twice, which has contributed to a 4.9% unemployment rate and a near record GDP growth.

Any liberal want to challenge this?

[Riverwind]

combining such things as depreciation deductions together with capital and corporate tax rates—averaged 39% in 2005, the second-highest among 36 industrial and leading developing countries. [...]

I read that article yesterday and felt it was the most biased piece of crap that has come out of the National Post in a while. I read the print version so I can't cut and paste the rest of the sentence that you cut off. However, I remember that the US tax rate was 37.5% compared to 39% in Canada. A difference hardly worth getting exercised about. But you would not know that from the headline and the leader which made you think that Canada's tax rates where way out of line.

And even if you think the rates differences are signifcant, you have to ask how they actually calculated the numbers since they 'combined such things as depreciation deductions together'. Sounds like they had lots of room to fudge the numbers to produce the results that they wanted.

I find it amazing that you can rant about 'liberal' bias in the media yet be completely blind to the blantent bias/distortion of the facts that comes out of media sources that have the MB stamp of approval.

[err]

Please give us business people tax relief.  We contribute something  very important to society.  We contribute J-O-B-S - which creates more tax revenue, and the more successful we are, the more taxes we pay.  We have to stay competitive on the global market and our powerful next door neighbor has a president who has cut taxes twice, which has contributed to a 4.9% unemployment rate and a near record GDP growth.

Any liberal want to challenge this?

This article was about personal taxes being too high... worded so it sounds like business taxes are too high. The biased article avoids stating that Canadian corporate tax rates are several percentage points below the American corporate tax rates. Rather, it compares "published" (personal) tax rates that the investor class is taxed at (before deductions and loopholes), with "corporate tax rates" in other countries.... Obvious DECEPTIONS that you would typically see from the CD Howe Institute, and typical of the trash printed in the National Post.

The article further went on to say that the governement should shift taxation more heavily to a consumption tax.... ie. raising GST which businesses don't end up out of pocket for... because they pay net zero GST, and investors don't pay GST on their investments.... No.. shift the burdon of taxation away from the investor class and corporate sector on to the consumer (middle) class.

[Cartman]

Well, I suspect that corporations benefit from us having a publicly funded health care system. These costs are shared with workers. In many other places, corporations have to pay for employees health insurance and it is expensive. Burns, you can tout the US tax cuts, but I really think they are in serious financial trouble. You can't keep spending, cutting taxes and borrowing forever. At some point, things fall apart. Even some Republicans are getting nervous about the deficit in the US.

Just as a bank gets nervous when an individual borrows too much, US lenders must be getting worried. I guess time will tell. I pity the next US president that will have to deal with this mess (Republican or Democrat).

[Yaro]

Just a question and don't take this the wrong way but why are you still in Canada? If you honestly belive that things are that much better right across the border why don't you simply move there?

[shoop]

Just a question and don't take this the wrong way but why are you still in Canada? If you honestly belive that things are that much better right across the border why don't you simply move there?

<{POST_SNAPBACK}>

That's a pretty weak comeback. People can care about our country, yet hope for it to be better. By giving an example to emulate, that doesn't mean whe should want to "move there".

[Yaro]

That's a pretty weak comeback. People can care about our country, yet hope for it to be better. By giving an example to emulate, that doesn't mean whe should want to "move there".

Actually its not a "comeback" at all, its an honest question. If I thought the way he did I would move. Why stay in a country where the vast majority of people simply don't want to live the way I do and a country that is far more to my liking is very close? Its simply not a logical thing to do.

[catch-as-catch-can]

If I thought the way he did I would move.

I like your confidence, but let me warn you ... it is is much harder for a Canadian to move there than it is for just about anyone else in the civilized world.

What do you have that we don't, eh?

[Yaro]

I have dual citizenship, it took me 6 months? I never said that there was anything wrong with the US, at the very crux of the issue I belive strongly in honest democracy. The vast majority of Canadians have proven themselves to be fiscally responsible (or at least want that out of there government) and socially liberal. Thats not going to change anytime soon.

Canada will probably allways be more moderate then the US, so if a person isn't happy about that why not move?

[catch-as-catch-can]

I have dual citizenship, it took me 6 months?

How the hell did you manage that?

Did you enlist? Deserted? Got hitched?

[Yaro]

No, I applied, they were eager to accept me for many reasons. I can't honestly give the reason as my lawyer handled the paperwork but I have a very hard time beliveing that if you have any kind of education whatsoever that getting into the US is hard for a Canadian.

[RB]

The taxes in Canada is high and sad. The family making say 100k think they are taxed @ 39% the but the truth when you combine all the tax burdens of federal, provincial, municipal and taxes from purchasing liquor to airport taxes, to tictacs it more like 55% of taxes to the government.

Compare to the other G-7 countries from personal income tax - Canada is 47% higher that average, and is 14% higher than the US. Canadians (combined federal and provincial) marginal rate of tax is 52% on income of $59,000. In the US the rate is 47% only when income hits an equivalent of $351,000 Canadian.

The goverment is contributing to proverty in this country and stifling the people. The tax grabber system is unfair and is no way to stimulate growth.

Plus we have a banking system that if the real rates of taxation exist in this discussion would reveal higher rates that we are actually discussing. I mean the bank creates money out of nothing with an intention to pay a debt we keep feeding.

Look, was income taxes suppose to pay debts?

[Riverwind]

Compare to the other G-7 countries from personal income tax - Canada is 47% higher that average, and is 14% higher than the US.  Canadians (combined federal and provincial) marginal rate of tax is 52% on income of $59,000.  In the US the rate is 47% only when income hits an equivalent of $351,000 Canadian.

Such comparisons leave out many importants facts. For example, the cost of health insurance comes out every American's pay one way or another. It may be hidden by the employer but it is a cost that should be added to the US tax burden. In addition, I heard americans spend much more on private education since the public school system has been starved for so many years. The additional private education expense needs to be added to the US total before you get a fair comparison. Lastly, with a federal budget deficit of 6% of GDP, the Americans are severly undertaxed. In the future their taxes will go up. On the other hand, Canadians can look forward to falling taxes in the years ahead as debts are paid off.

[RB]

Compare to the other G-7 countries from personal income tax - Canada is 47% higher that average, and is 14% higher than the US.  Canadians (combined federal and provincial) marginal rate of tax is 52% on income of $59,000.  In the US the rate is 47% only when income hits an equivalent of $351,000 Canadian.

Such comparisons leave out many importants facts. For example, the cost of health insurance comes out every American's pay one way or another. It may be hidden by the employer but it is a cost that should be added to the US tax burden. In addition, I heard americans spend much more on private education since the public school system has been starved for so many years. The additional private education needs to be added to the US total before you get a fair comparison. Lastly, with a federal budget deficit of 6% of GDP, the Americans are severly undertaxed. In the future there taxes will go up. On the other hand, Canadians can look forward to falling taxes in the years ahead as debts are paid off.

<{POST_SNAPBACK}>

Well even if you factor in the health system it would not add up to 47% more. Most companies in the US btw would pick up on the insurance coverage. Private education vs public education is a choice.

Our tax system don't give us a choice - try owing some tax dollars - shall I remind you that our tax department employs more people that we currently have in the military - so don't count on being saved at this time - the tax system gets you everytime.

[Toro]

No, I applied, they were eager to accept me for many reasons. I can't honestly give the reason as my lawyer handled the paperwork but I have a very hard time beliveing that if you have any kind of education whatsoever that getting into the US is hard for a Canadian.

<{POST_SNAPBACK}>

If you have no family ties, it takes five years of residency, i.e., after you get your Green Card, in the United States before you can become a citizen. And, for most peopole, it usually takes at least 3 years to get a Green Card. So Yaro, if it took you 6 months, I would be very, very, very interested how you managed to swing that. Or at least PM me the name of your lawyer. I might hire him.

[Riverwind]

Well even if you factor in the health system it would not add up to 47% more.

The 47% more statistic is either deliberately false or you misread the data you are looking at. There is no way Canada taxes are that much higher that the US.

Most companies in the US btw would pick up on the insurance coverage.

It is still a cost that employers pay which reduces the amount of salary that can be paid to the employee. Many auto makers choose to set up plants in Canada because the cost of labour is lower due since they don't have to pay for healthcare. The fact is Canadians receive a services from the gov't that Americans don't receive - the true value of those services must be factored in before you can make any comparison of US and Canadian tax rates.

Private education vs public education is a choice.

Not if you are a parent and know that the local public school is a crime infested cesspool with no resources. Americas spend more than Canadians on private education: that means they get less value for the tax dollar than Canadians.

Our tax system don't give us a choice - try owing some tax dollars - shall I remind you that our tax department employs more people that we currently have in the military - so don't count on being saved at this time - the tax system gets you everytime.

A lovely red-herring.

[Guest eureka]

The total tax take in Canada is about 35% of National Income: in the US it is about 30%. That puts us at about 20% higher and is not a selection from a specified level of income that happens to favour an argument.

When, as Sparhawk says, the cost of services that are essential is factored in, the average Canadian pays less for all services than the average American.

And, for income tax alone, the lower 50% of Canadians pays less tax than the same group of Americans. That is the government's attempt to avoid the wretched poverty levels of the US.

Yaro & Toro! Years ago, I three times refused transfers to the US. My choices were Los Angeles, Dallas, and New York. Since I would not move my family to any one of those on a bet, I am still in Canada. There seemed to be no difficulty in my moving there if I had so chosen.

[Toro]

eureka

If you're eductated, its actually pretty easy to come work in the States. But Yaro said he had American citizenship and it only took him 6 months. I would be very interested in knowing how he did that. Maybe I could do it too!

[Yaro]

Well, my lawyer isn't available as he works for me but I did ask him and he told me that the fact that I have held property in the US for more then 10 years combined with the fact that I employed more then 50 people there allowed a expedited claim.

He did however tell me that when he attempted to get work visa’s for the employees I had brought in from other parts of the world that the process was no more onerous then Canada’s. However it should be noted these were workers at an education level that couldn’t be found locally.

I hope that helps people find what they are looking for.

[Toro]

That makes sense Yaro. Investors are expedited. So I assumed it was either that, or it was before the 1970s, or you were some super-talented individual, i.e. athlete, musician, etc., who also gets preferences.

Its not hard to come and work in the US. It is onerous to get a Green Card for most people though.

[err]

Compare to the other G-7 countries from personal income tax - Canada is 47% higher that average, and is 14% higher than the US.  Canadians (combined federal and provincial) marginal rate of tax is 52% on income of $59,000.  In the US the rate is 47% only when income hits an equivalent of $351,000 Canadian.

Such comparisons leave out many importants facts. For example, the cost of health insurance comes out every American's pay one way or another. It may be hidden by the employer but it is a cost that should be added to the US tax burden. In addition, I heard americans spend much more on private education since the public school system has been starved for so many years. The additional private education needs to be added to the US total before you get a fair comparison. Lastly, with a federal budget deficit of 6% of GDP, the Americans are severly undertaxed. In the future there taxes will go up. On the other hand, Canadians can look forward to falling taxes in the years ahead as debts are paid off.

This is an interesting discussion on Personal taxes, not business taxes. I'll agree that our personal tax rates are not ideal. As Sparhawk has pointed out, our "progressive" tax system's top bracket starts at $59K. So someone who earns $60K is paying the same tax rate (on paper) as the guy who makes $350K. (Mulroney's government dropped the higher tax brackes with a result of only 3 tax brackets for personal income). However, the guy who makes $350K has more vehicles for sheltering his taxes than does the guy who makes $60K, and usually pays a significantly lower real percentage in taxes.

Corporate/business tax rates in Canada, (the topic of this forum) average at least 4% lower than corresponding tax rates in the USA. There are organizations (such as the Conservative party and their right-wing "think-tanks" like the Fraser Institute) who would distort this truth, appealing to the citizens of Canada about the unfairly high tax rates.... making it sound like business pays the high tax rates that middle-class Canadians can identify with.... in their aim to have business taxes lowered even further.

If the public has a complaint about unreasonably high tax rates, maybe they should look at the further tax cuts that our right-wing federal governments are pushing through for business.... resulting in cuts to our social services and escalation of our personal income taxes.... to finance these cuts to business tax rates...

[RB]

Compare to the other G-7 countries from personal income tax - Canada is 47% higher that average, and is 14% higher than the US.  Canadians (combined federal and provincial) marginal rate of tax is 52% on income of $59,000.  In the US the rate is 47% only when income hits an equivalent of $351,000 Canadian.

Such comparisons leave out many importants facts. For example, the cost of health insurance comes out every American's pay one way or another. It may be hidden by the employer but it is a cost that should be added to the US tax burden. In addition, I heard americans spend much more on private education since the public school system has been starved for so many years. The additional private education needs to be added to the US total before you get a fair comparison. Lastly, with a federal budget deficit of 6% of GDP, the Americans are severly undertaxed. In the future there taxes will go up. On the other hand, Canadians can look forward to falling taxes in the years ahead as debts are paid off.

This is an interesting discussion on Personal taxes, not business taxes. I'll agree that our personal tax rates are not ideal. As Sparhawk has pointed out, our "progressive" tax system's top bracket starts at $59K. So someone who earns $60K is paying the same tax rate (on paper) as the guy who makes $350K. (Mulroney's government dropped the higher tax brackes with a result of only 3 tax brackets for personal income). However, the guy who makes $350K has more vehicles for sheltering his taxes than does the guy who makes $60K, and usually pays a significantly lower real percentage in taxes.

Corporate/business tax rates in Canada, (the topic of this forum) average at least 4% lower than corresponding tax rates in the USA. There are organizations (such as the Conservative party and their right-wing "think-tanks" like the Fraser Institute) who would distort this truth, appealing to the citizens of Canada about the unfairly high tax rates.... making it sound like business pays the high tax rates that middle-class Canadians can identify with.... in their aim to have business taxes lowered even further.

If the public has a complaint about unreasonably high tax rates, maybe they should look at the further tax cuts that our right-wing federal governments are pushing through for business.... resulting in cuts to our social services and escalation of our personal income taxes.... to finance these cuts to business tax rates...

<{POST_SNAPBACK}>

well incorporation is one type of business that uses corporate tax structure, talk to the sole proprietorship is another type of business and would use personal income tax rate

Now try take funds from your corporate account and don't declare it - at year end the gov't decides for you this is personal income

[Guest eureka]

RB! Business taxes in Ontario are lower than in any of the contiguous American states.

[Toro]

RB!  Business taxes in Ontario are lower than in any of the contiguous American states.

<{POST_SNAPBACK}>

Does that include all taxes - property, excise, sales, payroll, etc., instead of just income? I would like to know. That would be interesting. Can you supply a link?

[Guest eureka]

I can't give you a link, but I can tell you that it has been commented on many times in recent years in Ontario (Toronto) papers.

That, allied to Healthcare, is Ontario's competitive advantage.

I recall a couple of years ago, reading the report of an analysis on the Auto industry that concluded that the cost of production of a unit in Ontario was $29,ooo against $47,000 in the US. That factored in taxes and healthcare.

I don't remember ever seeing what was meant by a unit.