Where your federal tax money goes...

jennie · August 30, 2007

I was looking through some budget tables, and I found this information. It made me do a double take, and I am still fuming about it.

http://www.fin.gc.ca/ec2006/ec/ecc2e.html

From table 2.1

Budgetary revenues 2006-07 (projected)

Personal income tax $ 2.9b

Corporate income tax $ -2.6b

Am I reading this wrong?

In other words, virtually ALL of the federal income tax from every one of us is given out in tax refunds to the corporations. May as well just make your check out to the corps and save the manpower for processing.

Do you like handing your hard earned money over to the megacorps that are currently, e.g., raping and plundering the north for resources and leaving environmental disasters in their wake?

I sure don't !! I think this is an absolute disgrace!!

gc1765 · August 30, 2007

I think that is compared to what was projected. In other words, if I estimate revenues from corporate taxes to be 20 billion, but it ends up being 17.4 billion, then the number in that table would be 17.4 - 20 = -2.6

P.S. Look at table 2.4 to see where the revenues are coming from.

Edited August 30, 2007 by gc1765

August1991 · August 30, 2007

Do you like handing your hard earned money over to the megacorps that are currently, e.g., raping and plundering the north for resources and leaving environmental disasters in their wake?
I sure don't !! I think this is an absolute disgrace!!

Mean, evil megacorps? WTF? You mean like lumber companies who cut trees and sell the wood to the US?

As to the taxes, you are reading this entirely wrong.

In 2006-07, the federal government had revenues of $229.43 billion of which $111.63 billion were from income taxes and $32.78 billion from corporate taxes. Corporate taxes amount to double taxation and if we were smart, we would do as Ireland and reduce or eliminate them.

jennie · August 30, 2007

Mean, evil megacorps? WTF? You mean like lumber companies who cut trees and sell the wood to the US?
As to the taxes, you are reading this entirely wrong.

In 2006-07, the federal government had revenues of $229.43 billion of which $111.63 billion were from income taxes and $32.78 billion from corporate taxes. Corporate taxes amount to double taxation and if we were smart, we would do as Ireland and reduce or eliminate them.

Double taxation how?

jennie · August 30, 2007

I think that is compared to what was projected. In other words, if I estimate revenues from corporate taxes to be 20 billion, but it ends up being 17.4 billion, then the number in that table would be 17.4 - 20 = -2.6
P.S. Look at table 2.4 to see where the revenues are coming from.

oops!

Finance Canada told me which graph ... but of course I should have checked the title. Numbers seemed weird too. Thanks.

Now I just have to find total corporate income somewhere to see what their rate of income taxation is compared to personal inc tx.

gc1765 · August 30, 2007

Now I just have to find total corporate income somewhere to see what their rate of income taxation is compared to personal inc tx.

This is what I managed to find:

"To this end, the government has also introduced significant corporate tax relief measures that will improve competitiveness and support small business growth, scheduled to take effect beyond 2007, including:

* Reducing the 12 per cent income tax rate applying to qualifying small business income to 11 per cent by 2009.

* Reducing the general corporate income tax rate to 18.5 per cent from 21 per cent by 2011, starting in 2008.

* Eliminating the corporate surtax for corporations as of January 1, 2008."

Link

But if you find the total corporate income, let us know, it will be interesting to compare the numbers.

jennie · August 30, 2007

oops!
Finance Canada told me which graph ... but of course I should have checked the title. Numbers seemed weird too. Thanks.

Now I just have to find total corporate income somewhere to see what their rate of income taxation is compared to personal inc tx.

OK ... I am still fuming ... look at that ... look at what they have done ... corporate inc tx down by the same amount pers inc tx is up. In other words, WE are paying every penny of the corporate tax reduction, dollar for dollar pretty much ... right?

So ... it is still money out of our pockets and directly into the pockets of the corporations ... <_< ... right?

Edited August 30, 2007 by jennie

geoffrey · August 30, 2007

Corporate taxes amount to double taxation and if we were smart, we would do as Ireland and reduce or eliminate them.

The Income Trust structure could have formed the basis of a highly productive and effective economy. Harper destroyed that. It would have been better to adapt tax legislation to the structure so that more businesses could adopt it rather than eliminate it. But that would result in non-deceptive taxation, and that's simply not allowed.

Double taxation how?

Well Jennie, when you invest in a corporation, you pay the corporate rate on income earned and then again on money you extract from the company through capital gains. IMO, there should just be a capital gains tax. That encourages people to invest (or stay vested) rather than to extract money to spend.

Beyond that, the company makes 'x' less dollars and therefore pays you that much less.

Think about your RRSP's. You will be taxed on income from those when you retire. But the corporations making money for you have been taxed all along. The effective government share of your retirement income is considerably higher than the personal rates would show. It's very deceptive. The average Joe loves seeing corporations getting taxed, not realising that they are in fact taxing themselves.

There are only two players in the economy (from this perspective anyhow). Individuals and the government. The more the government takes, the less individuals have.

Now I just have to find total corporate income somewhere to see what their rate of income taxation is compared to personal inc tx.

The overall rate? Good luck finding a statistic that works for you. Beyond that, you'll need a provincial breakdown including transfers and taking into account individual provincial corporate tax structures. Finding the effective corporate tax rate in Canada would be quite an undertaking. If you manage to pull it off, let me know, I'd love to see it.

The legislated rate shown here in this nice outline from KPMG: http://www.kpmg.ca/en/services/tax/documents/FPT_2006_07.pdf

jennie · August 30, 2007

The Income Trust structure could have formed the basis of a highly productive and effective economy. Harper destroyed that. It would have been better to adapt tax legislation to the structure so that more businesses could adopt it rather than eliminate it. But that would result in non-deceptive taxation, and that's simply not allowed.
Well Jennie, when you invest in a corporation, you pay the corporate rate on income earned and then again on money you extract from the company through capital gains. IMO, there should just be a capital gains tax. That encourages people to invest (or stay vested) rather than to extract money to spend.

Beyond that, the company makes 'x' less dollars and therefore pays you that much less.

Think about your RRSP's. You will be taxed on income from those when you retire. But the corporations making money for you have been taxed all along. The effective government share of your retirement income is considerably higher than the personal rates would show. It's very deceptive. The average Joe loves seeing corporations getting taxed, not realising that they are in fact taxing themselves.

There are only two players in the economy (from this perspective anyhow). Individuals and the government. The more the government takes, the less individuals have.

The overall rate? Good luck finding a statistic that works for you. Beyond that, you'll need a provincial breakdown including transfers and taking into account individual provincial corporate tax structures. Finding the effective corporate tax rate in Canada would be quite an undertaking. If you manage to pull it off, let me know, I'd love to see it.

The legislated rate shown here in this nice outline from KPMG: http://www.kpmg.ca/en/services/tax/documents/FPT_2006_07.pdf

Thank you. Food for thought.

Not fuming but ...

It is still true that ...

"corporate inc tx down by the same amount pers inc tx is up. In other words, WE are paying every penny of the corporate tax reduction, dollar for dollar pretty much ... right?"

If I am already paying taxes twice, then why am I now paying yours as well? :blink: :lol: jk

Edited August 30, 2007 by jennie

geoffrey · August 31, 2007

"corporate inc tx down by the same amount pers inc tx is up. In other words, WE are paying every penny of the corporate tax reduction, dollar for dollar pretty much ... right?"

You'd be paying every penny if it were in the other direction as well though. There is only one taxpayer, those that do business in Canada.

August1991 · August 31, 2007

The Income Trust structure could have formed the basis of a highly productive and effective economy. Harper destroyed that. It would have been better to adapt tax legislation to the structure so that more businesses could adopt it rather than eliminate it. But that would result in non-deceptive taxation, and that's simply not allowed.

I disagree, and you should know better Geoffrey.

If we are to reduce or eliminate corporate taxes, then paying lawyers to set up complex income trusts is not the way to do it. Would you agree to a policy of a $1000 cut in income taxes for people who hire an accountant to complete their tax forms?

Well Jennie, when you invest in a corporation, you pay the corporate rate on income earned and then again on money you extract from the company through capital gains. IMO, there should just be a capital gains tax. That encourages people to invest (or stay vested) rather than to extract money to spend.

Why should the government encourage people to stay vested?

I simply think the government should stay as neutral as possible and let people make their own decisions faced with the facts before them. Other than being needlessly complicated, our tax system also distorts the real world and people as a result make bad decisions.

Think about your RRSP's. You will be taxed on income from those when you retire. But the corporations making money for you have been taxed all along. The effective government share of your retirement income is considerably higher than the personal rates would show. It's very deceptive. The average Joe loves seeing corporations getting taxed, not realising that they are in fact taxing themselves.

Agreed.

The overall rate? Good luck finding a statistic that works for you. Beyond that, you'll need a provincial breakdown including transfers and taking into account individual provincial corporate tax structures. Finding the effective corporate tax rate in Canada would be quite an undertaking. If you manage to pull it off, let me know, I'd love to see it.

Agreed. It is hard not to believe that the CRA pulls a number between 0-100 out of a hat and that's the percentage you have to pay in tax. A random system would be more coherent than what we've got now. Heck, I think the CRA sometimes puts negative numbers and numbers over 100 in the hat. Edited August 31, 2007 by August1991

geoffrey · August 31, 2007

Would you agree to a policy of a $1000 cut in income taxes for people who hire an accountant to complete their tax forms?

I'm talking on a pragmatic level and your way off in idealistic land. I'd love to see corporate taxes completely eliminated tomorrow, but it's not politically possible (or perhaps I'm wrong there). Making the Trust structure more attractive would accomplish the same outcome (minus the lawyer's fees, yes) without as high of a political consequence.

Why should the government encourage people to stay vested?

They shouldn't. But a double tax on investment certainly isn't neutral, as you go on to claim.

Agreed. It is hard not to believe that the CRA pulls a number between 0-100 out of a hat and that's the percentage you have to pay in tax. A random system would be more coherent than what we've got now. Heck, I think the CRA sometimes puts negative numbers and numbers over 100 in the hat.

Remember, the average Canadian has T4 income and meager savings. That return isn't hard to comprehend or complete. Once we get going on various sources of income, then sure, it gets complex. It shouldn't be, but it has to be because of political realities. Government's can't (though they should) just levy the flat tax... unless your in Alberta. The poor and middle class greatly outnumber those that truly benefit from such a move. Democracy forces an increased transfer of wealth (progressive taxation) just due to the fact that most people don't make very much at all.

The complexities of our system are purely political, all to buy votes of various segements of the population at one time or another. You can't take it away once it's given though, and we end up where we are at.

http://www.cra-arc.gc.ca/E/pbg/tf/td1/td1-07e.pdf

Posit · August 31, 2007

Do away with corporate taxes? No way! In fact in addition to high income taxes, corporations and share-holders should have to pay capital gains on all investment income over and above the annual RRSP allotment.

Pliny · August 31, 2007

Do away with corporate taxes? No way! In fact in addition to high income taxes, corporations and share-holders should have to pay capital gains on all investment income over and above the annual RRSP allotment.

Did you win a lottery or something? Are you in a bracket or group that is exempt from income tax? Your understanding of what has been agreed to in this discussion, basically that there is only one taxpayer, the individual, must have escaped you.

geoffrey · August 31, 2007

Did you win a lottery or something? Are you in a bracket or group that is exempt from income tax? Your understanding of what has been agreed to in this discussion, basically that there is only one taxpayer, the individual, must have escaped you.

Those on welfare or government assistance would love to see increased corporate taxation.

Anyways... there will always be ignorant socialist types that believe that corporations are some mystical entity... not the legal collection of individual interests that they really are.

jennie · August 31, 2007

Those on welfare or government assistance would love to see increased corporate taxation.
Anyways... there will always be ignorant socialist types that believe that corporations are some mystical entity... not the legal collection of individual interests that they really are.

Not mystical ... but definitely powerful, in proportion with the concentration of industries in fewer hands.

As for corporate taxation ... I think those in the upper middle would like even more to see it increased, to take the disproportionate burden off them that is created by the artificial ceiling for top income tax bracket ... $250,000 taxed the same as multi-millions?? Give me a break! :blink:

Posit · August 31, 2007

Did you win a lottery or something?

No, nothing of the sort. I work for myself, earn a decent living providing a professional service. I suppose I could consider myself an anti-corporatist, since shareholder dividends essentially amount to theft - skimming off the top. ANY usury should be heavily taxed - including the big insurance scams out there.

80% of Canada's income is generated from small business employment. And when we consider that unemployment is around 5%, then welfare at 2% and government and at the remaining 3%, corporations only inject about 10% of the cash flow into the Canadian economy and most of that goes to the high end of investment portfolios. Then again many of the profits generated by companies through investment get sent out of country and are hardly ever re-invested in the business (unless of course they can make the argument that improvements will generate more profits).

Corporations contribute little to the Canadian economy. Low end-investors usually take the hit on losses since the high rollers liquidate their stock long before it becomes a problem. What I find more appalling is that corporations have convinced many of you that we need them. They fill your heads with myths of being successful - if you just work a little longer and little harder so they can turn a little more profit. The sad fact is that corporations enslave individuals and their families and spit you out when you are no longer useful to them.

White Doors · August 31, 2007

Corporations contribute little to the Canadian economy

Stupid Quote of the day award.

jennie · August 31, 2007

Stupid Quote of the day award.

Prove it.

"It's really good to be the boss.

http://ipsnews.net/news.asp?idnews=39067

Edited August 31, 2007 by jennie

White Doors · August 31, 2007

Prove it.
"It's really good to be the boss.

http://ipsnews.net/news.asp?idnews=39067

What does CEO renumeration have to do with my quote?

Not as much as your envy has to do with your political outlook I'd dare say.

Corporations are merely collections of people just like you.

jennie · August 31, 2007

What does CEO renumeration have to do with my quote?
Not as much as your envy has to do with your political outlook I'd dare say.

Corporations are merely collections of people just like you.

Prove that megacorporations contribute ANYTHING to the Canadian economy.

White Doors · August 31, 2007

Prove that megacorporations contribute ANYTHING to the Canadian economy.

huh? Prove that they don't.

What an assinine topic of conversation.

Prove that employees contribute ANYTHING to the Canadian economy.

See how stupid that is now?

jennie · August 31, 2007

huh? Prove that they don't.
What an assinine topic of conversation.

Prove that employees contribute ANYTHING to the Canadian economy.

See how stupid that is now?

Prove that megacorporations contribute anything to our economy. You may include what their workers contribute to the economy, but must balance that accounting with the profits that go to off-shore tax havens. Prove that there is any residual benefit to the Canadian economy.

Short answer ... YOU CAN'T ... because the profits sucked out, the taxes forgiven, the environmental desecration left behind, etc. all result in a HUGE loss to our economy.

Edited August 31, 2007 by jennie

Michael Bluth · August 31, 2007

Prove that megacorporations contribute anything to our economy. You may include what their workers contribute to the economy, but must balance that accounting with the profits that go to off-shore tax havens. Prove that there is any residual benefit to the Canadian economy.
Short answer ... YOU CAN'T ... because the profits sucked out, the taxes forgiven, the environmental desecration left behind, etc. all result in a HUGE loss to our economy.

There would be no profits if these corporations didn't exist.

There would be a lot of Canadians without jobs if these corporations didn't exist.

They pay returns to their Canadian shareholders.

They do pay taxes in Canada. Maybe not as much as you would like, but they do pay some.

All of these are benefits to the Canadian economy.

gc1765 · August 31, 2007

You'd be paying every penny if it were in the other direction as well though. There is only one taxpayer, those that do business in Canada.

Yes, but not everyone owns stocks. I think the people who believe in corporate taxes are those who don't own stocks (which also are probably poorer people), and those who want to eliminate corporate taxes own stocks.