How the Rich Avoid Paying Taxes

[PeteMoss]

Originally Posted by Regorium

The answer is actually really clear. The "rich" actually want and demand basically zero levels of public service aside from existing in a stable first world society. They will fly to the US for health care, use the 407, private schools, hire a nanny or two so they don't use child care and so forth, yet they are charged the most. On the other hand, the people that use the system the most, pay the least. If you're asking whose fault it is for the government running record deficits, it's actually the middle and lower class demanding services that their taxes (if they pay any) don't cover.

If you look at a Scandinavian country, they have a VAT of 20-25% in order to offer the levels of service we want. Consider that the tax rates on "the rich" in those countries is actually quite similar to Canada. The difference is the 20% in GST (or whatever lower # that makes it equivalent to a VAT) that we don't charge here.

What's the solution? I'm not sure, but your crusade against the rich may be misplaced.

Before this becomes a talking point. All of Europe has a very high VAT rates
of +19%. Greece for example is 24%, Hungary is 27%, Sweden is 25%, Finland 24%, UK 20%, etc.

The Scandinavian countries have higher income tax rates than the rest of Europe.

[blankall]

A major benefit of a use based tax, like sales tax, is that it catches tax cheats. A significant amount of income is earned off the books.

[PeteMoss]

Originally Posted by blankall

A major benefit of a use based tax, like sales tax, is that it catches tax cheats. A significant amount of income is earned off the books.

Yeah - and they do have reduced rates for groceries and other essentials so you aren't paying 25% tax on your daily apple.

[CliffFletcher]

Originally Posted by rubecube

I'd happily pay a more taxes for free post-secondary, universal child care, etc., despite the fact that I'm already graduated and will never have children.

Your stance is uncommon. Last I checked only a third of Albertans supported a PST.

Originally Posted by rubecube

Why is the general betterment of society so abhorrent to some people?

It isn’t abhorrent to most people. The problem is they want someone else to pay for it.

In poll after poll, when people are asked if they support [THING THAT WILL BETTER SOCIETY], the great majority say yes. But when asked if they’re willing to pay X or make do with less of Y to achieve it, support plummets.

[the_only_turek_fan]

Originally Posted by GGG

Why shouldn’t it be taxed again?

Saying we will never tax things twice is just an arbitrary rule.

To prevent the long term concentration of wealth under capitalism you have to be willing to tax twice otherwise wealth concentration is inevitable.

This is where we disagree.

The savings that I (or anyone) has built up is my private property and if I want to give it to my children the government should have no right to take a piece.

It is just my personal opinion.

[Enoch Root]

Originally Posted by rubecube

I would say most of the topics I feel the strongest about probably have very little direct impact on me personally. The only exception I can really think of is my stance on mandatory vaccinations/vaccine passports because I'm immunocompromised and I've already contracted COVID once. I would like to be able to live my life without constantly being worried if I'm going to contract a deadly virus.

Economically-speaking, I'm fine with where I'm at and I'm mostly concerned with seeing the people who work hard and can't get ahead be lifted up.

There are essentially 2 things governments provide:

1) essential services (health, safety, infrastructure, etc)

2) redistribution of wealth

While there can be plenty of debate on where to draw the line on essential services, virtually all people in Canada are in agreement with those things provided, to a reasonable extent. Yes, we can debate what reasonable is, but that isn't for this thread, and I would assume that most people aren't all that far apart on it.

The second one is more relevant to your comment about conservatives being selfish. This will be a huge over-simplification, but it basically boils down to this:

Those on the right believe that the economy works, more or less, and that, while some redistribution is beneficial, the best thing for everyone is a healthy economy. And too much redistribution has a net negative effect, because it hampers the economy (smaller pie).

Those on the left believe that the economy doesn't work all that well, and that more redistribution is needed and is more beneficial.

Here's the thing: while everyone is different of course, and have their own personal perspective, there is a fairly strong correlation between how successful people are, and where they stand on that spectrum. I am not saying it's black and white by any stretch, I am saying there is a fairly strong correlation.

So, suggesting conservatives are selfish is fine, but it is disingenuous to imply that those on the left are not: most of the people clamoring for more redistribution of wealth are the people that would benefit from said redistribution. In other words, they are being selfish also.

In other words, most people are - at least to some extent - somewhat self-interested.

I think it is at a minimum naïve, and probably closer to obtuse, to suggest that only one side of the spectrum is selfish.

[the_only_turek_fan]

For the record.........I believe in strong social services up to a certain limit.

As for the OP by Mathgod I do agree that it is wrong that billionaires pay no tax. That is plain wrong.

1. Most loopholes need to be eliminated.
2. Take that revenue and lower PIT/CIT rates.
3. Increase the GST so you broaden your tax base.

My big issue with all of this is that everyone wants more social services and have other people pay for it.

I think if we want robust and fair public services it has to be funded by everyone and accessible to everyone.

[the_only_turek_fan]

Originally Posted by Enoch Root

There are essentially 2 things governments provide:

1) essential services (health, safety, infrastructure, etc)

2) redistribution of wealth

While there can be plenty of debate on where to draw the line on essential services, virtually all people in Canada are in agreement with those things provided, to a reasonable extent. Yes, we can debate what reasonable is, but that isn't for this thread, and I would assume that most people aren't all that far apart on it.

The second one is more relevant to your comment about conservatives being selfish. This will be a huge over-simplification, but it basically boils down to this:

Those on the right believe that the economy works, more or less, and that, while some redistribution is beneficial, the best thing for everyone is a healthy economy. And too much redistribution has a net negative effect, because it hampers the economy (smaller pie).

Those on the left believe that the economy doesn't work all that well, and that more redistribution is needed and is more beneficial.

Here's the thing: while everyone is different of course, and have their own personal perspective, there is a fairly strong correlation between how successful people are, and where they stand on that spectrum. I am not saying it's black and white by any stretch, I am saying there is a fairly strong correlation.

So, suggesting conservatives are selfish is fine, but it is disingenuous to imply that those on the left are not: most of the people clamoring for more redistribution of wealth are the people that would benefit from said redistribution. In other words, they are being selfish also.

In other words, most people are - at least to some extent - somewhat self-interested.

I think it is at a minimum naïve, and probably closer to obtuse, to suggest that only one side of the spectrum is selfish.

This is a great post. Thanks Enoch.

[Enoch Root]

Originally Posted by rubecube

I'd happily pay a more taxes for free post-secondary, universal child care, etc., despite the fact that I'm already graduated and will never have children.

Why is the general betterment of society so abhorrent to some people?

Also, do rich people think they don't benefit from having a healthy and educated workforce?

I think you would be hard pressed to find anyone in Canada that is opposed to the betterment of society. I mean, I think we have built a pretty good country overall. And it has a pretty substantial amount of wealth redistribution now.

The question isn't whether there should be some, the question is: how much is the right amount?

But if you are going to approach the issue from the point of view that people who disagree with you on what is the right amount are ignorant #######s, you aren't going to get very far.

[Strange Brew]

Originally Posted by blankall

A major benefit of a use based tax, like sales tax, is that it catches tax cheats. A significant amount of income is earned off the books.

I wouldn't necessarily put it that way. It changes the rules, but it's not like whatever off the book income you're talking about gets taxed through consumption taxes. Especially if that o income is used to purchase foreign assets like real estate and travel.

edit: Although a pure consumption tax certainly makes filing your taxes and enforcement a whole lot simpler.

[Enoch Root]

Originally Posted by the_only_turek_fan

For the record.........I believe in strong social services up to a certain limit.

As for the OP by Mathgod I do agree that it is wrong that billionaires pay no tax. That is plain wrong.

1. Most loopholes need to be eliminated.
2. Take that revenue and lower PIT/CIT rates.
3. Increase the GST so you broaden your tax base.

My big issue with all of this is that everyone wants more social services and have other people pay for it.

I think if we want robust and fair public services it has to be funded by everyone and accessible to everyone.

I agree with everything that you are saying, but I have a few comments:

1) We all agree that billionaires should pay more tax, but I have yet to see anyone present anything that would have any impact on this whatsoever.

2) There are actually very few loopholes. There are ways to defer tax (most of which are quite reasonable), but there are actually very few ways to avoid it

3) Sales tax is good, because everyone pays it and it can't be avoided. But let's be clear about this: sales tax is a tax on the middle class, not on the rich. Sales tax will have zero impact on the ultra-rich, and very little impact on the rich, because the wealthy spend a significant portion of their money out of country.

Sales tax is a tax on the middle class (assuming that essentials, like food are exempt, so that it isn't also a tax on the poor).

[Enoch Root]

Originally Posted by Strange Brew

I wouldn't necessarily put it that way. It changes the rules, but it's not like whatever off the book income you're talking about gets taxed through consumption taxes. Especially if that o income is used to purchase foreign assets like real estate and travel.

Exactly. People are suggesting that tax avoidance is a huge issue. But a sales tax does not address that at all. All it does is make everything more expensive for the middle class.

[CliffFletcher]

Originally Posted by Strange Brew

I wouldn't necessarily put it that way. It changes the rules, but it's not like whatever off the bookh income you're talking about gets taxed through consumption taxes. Especially if that o income is used to purchase foreign assets like real estate and travel.

edit: Although a pure consumption tax certainly makes filing your taxes and enforcement a whole lot simpler.

I would guess that most of the off-the-books economic activity in Canada is in the trades. I know a couple commercial painters in their 40s who have never paid income taxes. Ever.

These guys aren’t funnelling money into foreign assets. They’re the sorts of people who would at least be putting something into the public coffers with increased consumption taxes.

[GGG]

Originally Posted by the_only_turek_fan

This is where we disagree.

The savings that I (or anyone) has built up is my private property and if I want to give it to my children the government should have no right to take a piece.

It is just my personal opinion.

How do you prevent the eventual concentration of all capital in the hands of very few people if you are unwilling to tax Capital after it’s been acquired?

I agree with you at the 99% population level that there isn’t a need to tax estates or Capital after it’s been acquired but there needs to be a redistribution method for the outliers.

[CliffFletcher]

Originally Posted by Enoch Root

Exactly. People are suggesting that tax avoidance is a huge issue. But a sales tax does not address that at all. All it does is make everything more expensive for the middle class.

The underground economy is huge. I talked with a CRA guy once who said it’s so big that the government doesn’t even want to publicly say how big it is, out of fear it will legitimize it and make the problem worse. A substantial proportion of the money that changes hands in the construction and trades industries is undeclared and untaxed.

[GGG]

Originally Posted by Enoch Root

There are essentially 2 things governments provide:

1) essential services (health, safety, infrastructure, etc)

2) redistribution of wealth

While there can be plenty of debate on where to draw the line on essential services, virtually all people in Canada are in agreement with those things provided, to a reasonable extent. Yes, we can debate what reasonable is, but that isn't for this thread, and I would assume that most people aren't all that far apart on it.

The second one is more relevant to your comment about conservatives being selfish. This will be a huge over-simplification, but it basically boils down to this:

Those on the right believe that the economy works, more or less, and that, while some redistribution is beneficial, the best thing for everyone is a healthy economy. And too much redistribution has a net negative effect, because it hampers the economy (smaller pie).

Those on the left believe that the economy doesn't work all that well, and that more redistribution is needed and is more beneficial.

Here's the thing: while everyone is different of course, and have their own personal perspective, there is a fairly strong correlation between how successful people are, and where they stand on that spectrum. I am not saying it's black and white by any stretch, I am saying there is a fairly strong correlation.

So, suggesting conservatives are selfish is fine, but it is disingenuous to imply that those on the left are not: most of the people clamoring for more redistribution of wealth are the people that would benefit from said redistribution. In other words, they are being selfish also.

In other words, most people are - at least to some extent - somewhat self-interested.

I think it is at a minimum naïve, and probably closer to obtuse, to suggest that only one side of the spectrum is selfish.

I think there is a really interesting discussion to be had on how do people vote.

- Do you vote in direct self interest? Vote for more taxation and services if you pay below median. Vote for daycare because you have kids, vote for low taxes because you have money?

Or

- Do you vote for a set of outcomes that you believe will be best for the country / Province / city

And if you vote based on the first do you believe it facilities the second and if you vote for the second are you actually still voting in self interest because creating the best country will create opportunity for you and a better place to live which is ultimately self serving.

[Enoch Root]

Originally Posted by CliffFletcher

The underground economy is huge. I talked with a CRA guy once who said it’s so big that the government doesn’t even want to publicly say how big it is, out of fear it will legitimize it and make the problem worse. A substantial proportion of the money that changes hands in the construction and trades industries is undeclared and untaxed.

Yes it is.

But a sales tax doesn't solve that.

Those people will end up paying sales tax when they spend their money, but their underground activities will continue, unabated.

[Enoch Root]

Originally Posted by GGG

I think there is a really interesting discussion to be had on how do people vote.

- Do you vote in direct self interest? Vote for more taxation and services if you pay below median. Vote for daycare because you have kids, vote for low taxes because you have money?

Or

- Do you vote for a set of outcomes that you believe will be best for the country / Province / city

And if you vote based on the first do you believe it facilities the second and if you vote for the second are you actually still voting in self interest because creating the best country will create opportunity for you and a better place to live which is ultimately self serving.

Yes, it would make for a good thread!

[AltaGuy]

I'm always curious - genuinely - how Conservatives would address wealth inequality. By every measure it has increased massively in the past forty years, and continues to get worse. Historically, this inequality has unerringly led to instability and worse.

What should we do, if not redistribute? Nothing?

[the_only_turek_fan]

Originally Posted by Enoch Root

I agree with everything that you are saying, but I have a few comments:

1) We all agree that billionaires should pay more tax, but I have yet to see anyone present anything that would have any impact on this whatsoever.

2) There are actually very few loopholes. There are ways to defer tax (most of which are quite reasonable), but there are actually very few ways to avoid it

3) Sales tax is good, because everyone pays it and it can't be avoided. But let's be clear about this: sales tax is a tax on the middle class, not on the rich. Sales tax will have zero impact on the ultra-rich, and very little impact on the rich, because the wealthy spend a significant portion of their money out of country.

Sales tax is a tax on the middle class (assuming that essentials, like food are exempt, so that it isn't also a tax on the poor).

You could exempt some essential items, but my point is that the middle class needs to pay some tax too.

Maybe have an income tax on the rich after $500,000 in earnings?