Bell Canada to become Income Trust

[Renegade]

How closely are our progressive tax rates tied to inflation?

I'm struggling to try and find a good way of trying to articulate my argument for earning and deserving. Somewhere in there, the relation between manager and producer and random factors are tied more closely together. Windfalls produced by random factors seem to inordinately benefit mangers and not producers, when they should have a more equal benefit for both. Managers earnings should be based on how much they add to production, not as a dollar value, but as a percentage value. Yet, in many of the richest industries, managers can give themselves huge raises based on random factors that benefitted their company, when they did not in fact add any value to production themselves. Owners are tougher to value I think, since they are facilitators and don't actually produce anything. Our economic system is based on owners getting a nice piece of the pie. A primary problem of this whole topic I think is that the money one earns or deserves is also affected by how one spends it, and that could be really difficult to formulate statistics on. A person whose wealth increases by $25 million a year who invests $22 million in new business and spend $3 million on themselves is in many ways a world apart from another person who gets $25 million and spends $19 million on themselves and invests $6 million.

An interesting discussion, but it belongs in a separate thread. Happy to discuss it further if you start a new thread.

[Renegade]

Taxation does not truely apply to higher incomes. This is factual in terms of both business and individual income taxes. The higher the income the greater the advantage of shelters and deductions. It gets to a point where huge incomes pay practically no taxes and that is a simple truth.

Care to cite any factual backup for your claim?

[Hicksey]

Why is it then that people with riches beyond what any person really deserves still get so worked up about how much they pay in taxes then? If you literally have more money than you could ever spend on improving your life, why not spread the wealth out a little more? Ultimately, all of the money will be spent, and the economy will be stimulated, so what is the point of having it as concentrated as it seems in our society? Ugh... I'm getting off topic again... Even under the current model, I wonder if we couldn't achieve the same results with a more moderately wealthy people, a lot more wealthy people, and a lot fewer ridiculously wealthy people.

You don't trust the wealthy to hold wealth, but you trust the government? Neither are entirely trustworthy.

And people get wealth as they deserve it. Our system is designed that way. The problem is getting by the barriers that are the lower/middle class layers. Once you get by that if you are smart with your money, riches are not all that hard to get. The left has built so many devices into our society to make those middle/lower class people dependent fools that and with each new generation it gets seemingly harder to achieve it. Socialism keeps the rich rich and the poor poor and at the same time it puts up a barrier to the poor it creates a safety net for the rich by restricting the ability of the poor to take advantage of their mistakes. So what happens is rich people basically get and lose their riches from each other while Joe Citizen toils his entire life long dreaming of it.

[Jerry J. Fortin]

Taxation does not truely apply to higher incomes. This is factual in terms of both business and individual income taxes. The higher the income the greater the advantage of shelters and deductions. It gets to a point where huge incomes pay practically no taxes and that is a simple truth.

Care to cite any factual backup for your claim?

Sure, try Revenue Canada and look it up for yourself. There are tons of deductions available, but you need the income to do it. So in theory its a fair system because everybody has the opportunity to make these deductions, wrong!

A guy making minimum wage can't take advantage of tax shelters because he simply doesn't have the disposable income to do it. It isn't rocket science. Aside from that look at small business owners. I knew a few of them and while I may make more money as a wage slave they keep more because of the tax savings they enjoy. Taxation isn't black and white people, it is a big grey area by design.

How about the case of a single income traditional family with a stay at home mom and a working dad. Compare them to a two income family that makes the same amount of total family income, guess who pays more in tax? The single income family! Go figure!

Look at the case of a tar sands company in Alberta who made billions of dollars last year but paid less than 10 million in taxes. Strange but true, tax shelters do a lot of good if you can use them. To use them you need the income!

The greater the income the greater the tax advantage is a good rule of thumb.

[geoffrey]

A guy making minimum wage can't take advantage of tax shelters because he simply doesn't have the disposable income to do it. It isn't rocket science. Aside from that look at small business owners. I knew a few of them and while I may make more money as a wage slave they keep more because of the tax savings they enjoy. Taxation isn't black and white people, it is a big grey area by design.

It's not that grey of an area, but we'll play with your misinformation for a bit.

A guy making minimum wage definitely 100% of the time pays less tax then a corporate CEO. What Jerry is talking about in shelters is possibly (if he's talking about anything) writing off past losses against current profits. Exactly what Bell is doing. The minimum wage guy likely has never ventured a dollar into a business, he has no losses which to write off his gains from.

On the other hand, richer people with money need the ability to write off loses in order for them to risk their capital. Without these shelters, there is no way many people would enter the riskier business ventures out there.

Small business tax savings are dependant on the province you live in and the business cycle. In Alberta, self-employed people do very well by tax savings. In other provinces, they do not. Depends on the tax regime of the government.

Of course there is a little grey area, that lunch for the kids that was a 'business expense', those sort of things that business owners get away with. These things are rather small, in bigger things, everyone is playing within the rules, or else, you get audited and you've got to pay the bill. And yes, higher income people do pay more tax than you in the long run (and likely short run). Everything eventually catches up. Those RRSPs need to be withdrawn one day, those offshore shelters need to be repatriated to be spent.

You will pay taxes... tax shelters and stuff like that are merely delaying the bill. They do pay more tax.

You get way more deductions if your richer, but you still pay way more, even on a percentage basis... over time.

[M.Dancer]

I'm with Leona Helmsley

....only little people pay tax

[Renegade]

Sure, try Revenue Canada and look it up for yourself. There are tons of deductions available, but you need the income to do it. So in theory its a fair system because everybody has the opportunity to make these deductions, wrong!

Utter nonsense Jerry!! Can you explain why the top 2% who earn more than $100,000/year pay 26% of the taxes? Is it because they and their accountants are too uninformed of all those shelters and deductions, or is it that $100,000 is not enough income to take advantage of those deductions? Or perhaps you don't really believe that they pay 26% of the income tax collected.

I don't know how many tax returns you have prepared over $100,000 or how many deductions or shelters you have taken advantage of, Jerry, but I've done a few. While there are more legal ways to take advantage of tax law as the amount of disposable income increases, it is far from how you paint the picture that the rich avoid taxes altogether.

As I expected, you cannot point to any evidence of your claim, you simply point to Revenue Canada and say "look at all those deductions", without understanding them or what it takes to take advantage of them.

A guy making minimum wage can't take advantage of tax shelters because he simply doesn't have the disposable income to do it. It isn't rocket science. Aside from that look at small business owners. I knew a few of them and while I may make more money as a wage slave they keep more because of the tax savings they enjoy. Taxation isn't black and white people, it is a big grey area by design.

It is pointless for a minimium wage worker to take advantage of tax shelters since they pay so little income tax to begin with. In fact it may be counterproductive to try and take advantage of a shelter as the cost to use the shelter, including the accountant's time, will far outweigh any tax savings.

How about the case of a single income traditional family with a stay at home mom and a working dad. Compare them to a two income family that makes the same amount of total family income, guess who pays more in tax? The single income family! Go figure!

Not necessarily true. It depends upon the circumstances. The single income family gets a tax credit for the stay at home mom which the two income household does not. In addition the single income family has lower costs as they do not need childcare or incur any of the other additional costs to keep the second person working (clothing, transportation, training, etc)

Look at the case of a tar sands company in Alberta who made billions of dollars last year but paid less than 10 million in taxes. Strange but true, tax shelters do a lot of good if you can use them. To use them you need the income!

Are you only looking at the last year? How about you factor all the money they sunk into reaserch and exploration in the years before they made any income?

The greater the income the greater the tax advantage is a good rule of thumb.

Of course, no dispute there. It is hard to take advantage of shelters when one pays little or no tax to begin with.

[Renegade]

I'm with Leona Helmsley

....only little people pay tax

Maybe Jerry can explain to Leona all the tax deductions she should have used because apparently she and her accountants were unaware and she was convicted of tax evasion. How unfortunate that despite Jerry and Leona's illusions, the rich do indeed have to pay taxes.