Want a truly fairer income tax system? Tax families (interesting tax model)

[CdnFox]

https://archive.ph/xc8xx#selection-1511.9-1511.60

One-earner families pay thousands more dollars in income tax than two-earner families with the same income. How is that possibly fair?

Consider two similar families living in Ontario. In the first, both parents earn $60,000. In the second, one parent earns $120,000, the other nothing. These two households have the same financial resources, yet the second family pays over $7,000 more a year in taxes (not including CPP or EI). Why? Because with our progressive rate structure, the single-earner’s second $60,000 tranche of income — from $60,001 to $120,000 — faces a higher marginal tax rate than the two separate $60,000 incomes earned by the first family

According to Statistics Canada, 2.2 million couples in Canada rely on one income. Plus, an unknown number of the 5.1 million dual-income earning couples will have earnings unequal enough to trigger some form of tax penalty. In short, it’s not a trivial issue.

 

[CdnFox]

So the TL/DR is that if we were trying to be fair we would be taxing by the household or family, instead of by the income earner.

This is not dissimilar to what Harper did with his family 'tax splitting', which allowed a non working spouse to split their income with the working spouse to reduce taxes.

It's actually not a bad idea. I have thought forever that it is wrong to say that just because one partner doesn't earn anything or earns less but they have no value or participation in the earning partners ability to work and earn money

[herbie]

More like $4200, but seeing as how you mentioned EI & CPP which are not tax, counting that as pa deductions would reduce it at least $1000 more as 2 people are paying those instead of one. And take into account a nonworking spouse gets a lower pension than one that worked.

But you're correct in that an extra tax hurts your family income and is unfair.

Look at it like this it's even worse: taking in the 15k deduction for a nonworking spouse on earns 60K vs 2 earning 30K
You're looking at the single earning paying $2400 more tax. 2400 bucks of a family income of 60,000 hurts a hell of a lot more than 4200 to a family income of 120,000.

[Nefarious Banana]

Flat tax rate . . . work as much as you want.

[eyeball]

6 hours ago, Nefarious Banana said:

Flat tax rate . . . work as much as you want.

So long as what everyone can deduct is limited to the same things...medical expenses top a very short list. No loopholes for anyone.

[herbie]

Only if you concede self-employment and home office deductions are not loopholes.

[CdnFox]

7 hours ago, herbie said:

More like $4200, but seeing as how you mentioned EI & CPP which are not tax, counting that as pa deductions would reduce it at least $1000 more as 2 people are paying those instead of one. And take into account a nonworking spouse gets a lower pension than one that worked.

But you're correct in that an extra tax hurts your family income and is unfair.

Look at it like this it's even worse: taking in the 15k deduction for a nonworking spouse on earns 60K vs 2 earning 30K
You're looking at the single earning paying $2400 more tax. 2400 bucks of a family income of 60,000 hurts a hell of a lot more than 4200 to a family income of 120,000.

I don't think you really understand any of that. Your math is totally buggered there.

end of the day under our current system a single earner bringing in 120 k while the spouse supports him and works in teh home pays much more than the 2 income family of 65000 each. Yet they're the same family and use the same resources and get the same benefit from their taxes - so how is that fair?

[CdnFox]

1 hour ago, eyeball said:

So long as what everyone can deduct is limited to the same things...medical expenses top a very short list. No loopholes for anyone.

You realize that would screw over the poor prety bad right? Currently people are allowed to earn a certain amount before they pay ANY tax.  And the wealthy pay about 80 percent of the taxes.  So to bring in the same revenues the tax rate for the poor would have to go up rather substantially. I mean -  I"M ok with that, just didn't think you would be.  A 100 percent raise for taxes on the poor's income would really sting.

Edited April 27 by CdnFox

[eyeball]

13 hours ago, CdnFox said:

You realize that would screw over the poor prety bad right? 

Nope and neither do you. You're discounting the fact wealthy people have numerous ways of squirreling their income away into funds, trusts, and other investments that defend it from the taxman.

Take all that away and flatten the playing field for everyone.

[herbie]

16 hours ago, CdnFox said:

I don't think you really understand any of that. Your math is totally buggered there.

What I don't understand is how you can still f*cking argue even when I agree with you. If you have a non-working spouse, there is a deduction for that. Apply it and THEN argue about who doesn't know math.

[CdnFox]

2 hours ago, eyeball said:

Nope and neither do you.

Oh really

Quote

You're discounting the fact wealthy people have numerous ways of squirreling their income away into funds, trusts, and other investments that defend it from the taxman.

I'm really not.  I know most of those ways.

Quote

Take all that away and flatten the playing field for everyone.

well first off you can't take all of that away - much of it has nothing to do with the tax rate or allowable right offs.

But - what you're really forgetting is that while the wealthy have ways of sheltering some of their money, the fact is it's not all that much in the end. Most of their money is taxed.

And currently - that money pays for about 80 - 90 percent of our personal tax reveue which represents most  of the gov'ts revenue.  So - when you 'level' that, the poor must make up the difference in actual revenues - and that is HUGE.

let me do some quick math for you and we'll see if we can make this a little clearer.

lets say there's 10 guys.  And right now the gov't makes 100 bucks in taxes. 1 guy earns 220 dollars - shelters 40, and pays 90 dollars in tax on the rest of the money. the rest each earn 20 bucks but becauase they're  in a lower tax bracket they only pay 1.10 dollars each after their deductions and sheltering.

So we level the tax. The gov't still wants its 100 dollars.  So - 20 times 9 plus 220 = 400.  So everyone has to pay 25 percent. 

Well for the rich guy that's 55 dollars. Even tho he couldn't shelter his income as much he still pays a hell of a lot less. he still pays a lot more taxes than the other guys but not as much as he used to

For the other guys they go from 1 dolllar to 5 dollars. Remember - they lost their personal basic deduction, all their education deductions, their child and dependent deductions and now they have to make up the difference because this represents a LOWER tax burden for the rich.

 

I know - that was a lot of numbers for you to read   but - work it out a few times. And remeber poor people get tax deductions too.  And when you add it all up and account for everything the rich would pay less than they do and the poor would pay more.

 

 

[eyeball]

48 minutes ago, CdnFox said:

For the other guys they go from 1 dolllar to 5 dollars. Remember - they lost their personal basic deduction, all their education deductions, their child and dependent deductions and now they have to make up the difference because this represents a LOWER tax burden for the rich.

Who said the other guys should lose anything? Not me. Eliminating the advantage wealth enjoys will actually accomplish something. Giving those advantages to everyone else won't accomplish very much if anything.

 

 

 

 

[CdnFox]

4 hours ago, herbie said:

What I don't understand is how you can still f*cking argue even when I agree with you.

Dude - nobody can tell what you were trying to say.

[CdnFox]

2 hours ago, eyeball said:

Who said the other guys should lose anything? Not me.

Yeah - you literally did, but then strangely claimed that somehow their losing something was ok because the wealthy are losing something so yay or soemthing like that

I told you it means the poor and middle class pay more. you thought they didn't because you don't understand how tax or math works, but the fact is they would under a flat tax system even if the wealthy lose their ability to shelter a portion of their income

Quote

Eliminating the advantage wealth enjoys will actually accomplish something.

Like what. They already pay vastly more taxes. If you make taxes 'Fair" then the rich pay less than they do now.  That may upset  your leftist brain but it's a simple mathematical truth. No matter how you slice it and no matter how much you hate them - the reduction the rich would enjoy in tax rates would mean massively lower tax revenues that would have to be spread among the lower income earners in a flat tax model to restore income.

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Giving those advantages to everyone else won't accomplish very much if anything.

Nobody proposed that.  But to be honest the poor already shelter a large portion of their income with minimal effort. Even the middle class does.  Consider someone who earns 35 thousand dollars - 15 thousand is instantly sheltered with the personal basic deduction. So almost half of their income  - half! - is income tax free right off the bat.  That goes away - so now they're paying tax on the full amount. What about deductions for children and such? Also very substantial as a portion of that person's income.  Gone.

Sorry kiddo but in reality the low income earners shelter more of their income than the wealthy do as a percent of their income. That's who'll get clobbered

[herbie]

30 minutes ago, CdnFox said:

Dude - nobody can tell what you were trying to say.

As they were actual figures and deductions pulled off a Cdn tax website, not just pulled out my ass to make a whiney post.

[CdnFox]

13 minutes ago, herbie said:

As they were actual figures and deductions pulled off a Cdn tax website, not just pulled out my ass to make a whiney post.

Pulling a number from a website without context is pretty meaningless.  I can say 10+10=100  but the fact that i'm using binary numbers from a computer coding website doesn't make that statement appear less wrong  to someone trying to figure out what i meant.

[eyeball]

2 hours ago, CdnFox said:

I told you it means the poor and middle class pay more.

Well I didn't, I never mean that and you can take it as a given, always, that I mean the rich should pay more than anyone else, lots more.

You stand, as always, corrected...albeit forever confused.

And just to be sure when I say the rich  I mostly mean the top 1 percent.

Research from the Canadian Centre for Policy Alternatives shows that the 87 richest families in the country each hold, on average, 4,448 times more wealth than the typical family. Together these 87 families hold more wealth than the bottom 12 million Canadians combined. 

A 1% tax on wealth over $20 million in Canada would generate about $10 billion in revenue in its first year, substantially more than the commonly cited estimate of $5.6 billion.

https://www.policynote.ca/tax-the-rich/

Edited April 28 by eyeball

[CdnFox]

1 hour ago, eyeball said:

Well I didn't, I never mean that and you can take it as a given, always, that I mean the rich should pay more than anyone else, lots more.

Well then i would have to say that you should reconsider your position on a flat tax.  You shouldn't be supporting it.  Currently the rich DO pay lots more and that would not be as true under  a flat tax. They'd still pay more but not as much as they do now. 

Currently the top 1 percent pay 22 percent of all income tax collected. And they only earn 10 percent of the income BEFORE deductions and sheltering. They currently pay far more than their fair share.

[eyeball]

1 hour ago, CdnFox said:

They currently pay far more than their fair share.

I guess we just disagree on what fair share means then, not to mention far more. There's not much to be done about that I suspect.

In the meantime, I'll let the article I posted stand for what I think fairer means. In broader terms I'm convinced one of the main reasons there's so much wealth inequality in the world is the complexity of tax systems of countries that also subscribe to a set of international rules regulating the movement of wealth around the world - basically just a shell game to avoid taxes.

So....a minimum tax on wealth needs to be similarly negotiated amongst the same 140 countries that have agreed to a minimum 15% corporate tax.

Maybe the ridiculously rich will flee to the moon or Mars. They'll probably create a lot of good paying jobs doing so. 

Edited April 28 by eyeball

[August1991]

7 hours ago, CdnFox said:

'''

let me do some quick math for you and we'll see if we can make this a little clearer.

lets say there's 10 guys.  And right now the gov't makes 100 bucks in taxes. 1 guy earns 220 dollars - shelters 40, and pays 90 dollars in tax on the rest of the money. the rest each earn 20 bucks but becauase they're  in a lower tax bracket they only pay 1.10 dollars each after their deductions and sheltering.

--

Quick math. I always love such questions.

Invariably it means that the poster/journalist is correct

[CdnFox]

1 hour ago, eyeball said:

I guess we just disagree on what fair share means then, not to mention far more. There's not much to be done about that I suspect.

Well for me 'fair' would be a fairly easy to define equitable portion of the costs - that's what taxes are after all.  Paying more for the same services isn't fair.  The rich should pay SOME more arguably becuase they derrive an additional benefit in some cases but they only get the same health care anyone else does, they get the same roads, they get the same 'safe supply' drug programs, so there's no rationale for charging them excessively higher rates.

What you mean when  you say "fair" is  'take more than  whats' fair by force because you want it", which would commonly be known as theft but you feel 'fair' is more politically acceptable as a term

Quote

In the meantime, I'll let the article I posted stand for what I think fairer means. In broader terms I'm convinced one of the main reasons there's so much wealth inequality in the world is the complexity of tax systems of countries that also subscribe to a set of international rules regulating the movement of wealth around the world - basically just a shell game to avoid taxes.

Poor people believe that kind of stuff.

Quote

So....a minimum tax on wealth needs to be similarly negotiated amongst the same 140 countries that have agreed to a minimum 15% corporate tax.

It can't be. They'd all still have different deductions and sooner or later one would cave so that all the businesses ran to them and then it collapses.

Quote

Maybe the ridiculously rich will flee to the moon or Mars. They'll probably create a lot of good paying jobs doing so. 

They'll buy themselves some politicians in one country or another and shelter their money there.

The problem with the left - not joking or being sarcastic - is that you ALWAYS come up with solutions which are in direct opposition to human nature and natural laws.  And you think somehow humans will change what and who they are to accommodate that.  Which we know isn't possible. Which is why your ideas always fail. Communism failed, Market socialism has failed, safe supply failed, 'letting the budget balance itself' failed, widespread ubi in the form of cerb failed. Climate change policy has failed.  Etc etc

You cannot create a system which requires humans to change their very nature to work - if you do it will fail. You need to learn to harness the power of systems that DO work hand in glove with human nature. It is the nature of humans to compete and some will do better than others. But everybody benefits. And that's a good thing.

 

[eyeball]

9 hours ago, CdnFox said:

The problem with the left - not joking or being sarcastic - is that you ALWAYS come up with solutions which are in direct opposition to human nature and natural laws.

When Canadians were polled on the prospect of a wealth tax on the one per cent back in 2021, it garnered almost 90 per cent support nationwide, including 82 per cent from Conservative voters.

https://www.nationalobserver.com/2024/02/22/opinion/canada-needs-wealth-tax#:~:text=When Canadians were polled on,per cent from Conservative voters.

I haven't heard Poilievre say he'll axe the capital gains tax Trudeau just introduced.

Personally I think he should and tax wealth more along the lines that the Canadian Centre for Policy Alternatives suggests instead. 

[Aristides]

Hong Kong uses a flat rate. 15% up to $5 million HKD ($874K CAD) and 16% over that. They seem to manage alright.

[eyeball]

On 4/26/2024 at 7:35 PM, herbie said:

Only if you concede self-employment and home office deductions are not loopholes.

No, they're clearly genuine business expenses.

[blackbird]

The Trudeau government is imposing a much larger capital gains tax on people earning over a certain amount of capital gains.  If you think this tax will only affect the rich people who make a lot of money you have been totally deceived.  You will be the one paying for it. 

In the case of doctors this means their retirement fund which are invested will pay far more taxes above a certain capital gain.  

What that means in reality, when the doctor's associations sit down and negotiate with their respective provincial governments the next contract, they will simply say they are paying more income taxes which is negatively affecting their retirement funds and demand and equal increase from the provincial governments.  In the end it is all of the taxpayers who will be required to pay more income taxes and various other taxes.  The professionals in the higher income tax bracket will not lose anything in the end.

That will be same situation with all professionals.  They will simply increase their income to compensate for higher capital gains tax.  So increasing capital gains taxes will prove to be a dismal failure.  It just passes along tax increases to everyone and increases the costs of everything.