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Old 09-22-2021, 10:25 AM   #41
Enoch Root
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Generally speaking, massive levels of wealth disparity have historically been linked with high levels of social upheaval, instability, and a whole host of other issues.
Yeah. So... nothing to add?
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Old 09-22-2021, 10:32 AM   #42
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I like the sentiment of 'tax the rich', but when you look at the stats something like the top 20% of earners pay 65% of all the income tax. I know that income tax is only a portion of the tax bill but to me, it looks like we are taxing the rich and they are paying their taxes.
This fact is lost on people.
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Old 09-22-2021, 10:37 AM   #43
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Old 09-22-2021, 10:42 AM   #44
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This fact is lost on people.
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The richest 1% controlled 26% of Canada's wealth in 2016, according to a Parliamentary Budget Office (PBO) report. Recent academic research suggests that figure may be even higher at 29% of wealth.
https://www.policynote.ca/the-rich-and-the-rest-of-us/


If you control that much of the wealth, I don't think it's unfair to pay a far higher percentage of taxes.
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Old 09-22-2021, 10:48 AM   #45
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https://www.policynote.ca/the-rich-and-the-rest-of-us/


If you control that much of the wealth, I don't think it's unfair to pay a far higher percentage of taxes.
But don't they already pay more? 40% of 10 million is a lot higher than 40% of 100K.
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Old 09-22-2021, 10:49 AM   #46
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Pretty simple to avoid taxes. Set up a personal corporation. You pay 11-13% tax on the money you keep in the corporation. This rate is lowered with write offs. You can also invest this money into passive investments while in corporate solution, and the profits from these investments are also sheltered.

Structure your finances in a way that any money you take out is minimal, and use write offs for things like home officers, employment use vehicles, business dinners, etc... To keep that tax minimal.

The more you make, the higher proportion of money that stays in corporate solution, and the lower the effective tax rate.

Things like capital gains exemptions, a lack of inheritance tax, trusts, etc. ensure the rich stay rich.

The only real thing the government has done to impede this is getting rid of income splitting.

Edit: disclaimer... Do not do this before talking to a tax lawyer or accountant.
This is so wrongingly wrong, it's embarrassingly stupid.

First off, any money you put into the corp will be taxed as earnings. You can only invest earnings, not revenue.

Then, you're going to be taxed on dividends and cap gains because the money isn't tax sheltered.

Then, when you want to draw that money out, it's going to be either income or dividends for you. Either way, the tax rate is going to be just like you got a goddamned T4. BTW, if you pay as income, you have to pay BOTH employer and employee CPP. For dividends, since personal corps NEVER quality for special dividend treatment, the dividend withdrawal amount gets marked up massively, negating the lower dividend tax rates.

So if you want to save money in the absolutely worst way, go ahead and do this.

Your punishment is to go hide in a corner and wear a dunce cap.
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Old 09-22-2021, 10:51 AM   #47
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But don't they already pay more? 40% of 10 million is a lot higher than 40% of 100K.
LOL. No one making $10 million is paying 40%. That's naive. They probably pay less than you or I.
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Old 09-22-2021, 10:55 AM   #48
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But don't they already pay more? 40% of 10 million is a lot higher than 40% of 100K.
In this scenario, one person still has 6 million dollars to the other persons 60k, or 9900% more money

I'm sure theyll be fine even if it was 40%
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Old 09-22-2021, 10:59 AM   #49
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LOL. No one making $10 million is paying 40%. That's naive. They probably pay less than you or I.
Maybe I'm naive, but I highly doubt that. Is there any stats to back that up? I feel like a lot outrage is due to stories sensationalizing the few cases that do have people skirting the laws on taxes. If this was really a problem, how come the CRA is not on it like crazy?
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Old 09-22-2021, 11:01 AM   #50
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In this scenario, one person still has 6 million dollars to the other persons 60k, or 9900% more money

I'm sure theyll be fine even if it was 40%
Sure, but they also already paid $4M in taxes vs. $40K. That one person paid into a public benefits program 100 times more than the other person. So if the average person uses 40K of services from the government, the guy who made 10M just paid for 99 other people. Is that not enough?
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Old 09-22-2021, 11:02 AM   #51
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Maybe I'm naive, but I highly doubt that. Is there any stats to back that up? I feel like a lot outrage is due to stories sensationalizing the few cases that do have people skirting the laws on taxes. If this was really a problem, how come the CRA is not on it like crazy?
because the people who make the rules benefit from it being this way and we are okay with it because theres this real idea (that you can even see in this thread ) of rich people worship in most developed societies where people are terrified that if they tax the rich appropriately theyll move to Uganda or something and we will all be poor when the nice rich people leave
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Old 09-22-2021, 11:03 AM   #52
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Originally Posted by The Yen Man View Post
Maybe I'm naive, but I highly doubt that. Is there any stats to back that up? I feel like a lot outrage is due to stories sensationalizing the few cases that do have people skirting the laws on taxes. If this was really a problem, how come the CRA is not on it like crazy?
I have to wonder if the problem is that we conflate the stories we read on US tax policy with the reality of Canadian tax policy.
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Old 09-22-2021, 11:04 AM   #53
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LOL. No one making $10 million is paying 40%. That's naive. They probably pay less than you or I.
Do you have any specific examples?

Because my experience, in working with people that are making 7 digits, is that they are paying quite a bit.

Does everyone do everything they can to minimize or defer how much they pay? Of course - that is how it works, as long as you remain within the law. But if you make money, you are paying tax.
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Old 09-22-2021, 11:08 AM   #54
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Originally Posted by stone hands View Post
because the people who make the rules benefit from it being this way and we are okay with it because theres this real idea (that you can even see in this thread ) of rich people worship in most developed societies where people are terrified that if they tax the rich appropriately theyll move to Uganda or something and we will all be poor when the nice rich people leave
If you're referring to me as "rich people worshipping", you're sadly mistaken. All I'm pointing out is, people scream "tax the rich!" like they don't already. Again, proportionally, they pay a lot more for relatively the same services from the government, if not even less since they probably pay for better private services.

Are we saying it's not fair that high earners make so much? Who determines that? A free market and competition. If a company deems a CEO is worth $10M a year, should the government be intervening and tell the company no they aren't?
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Old 09-22-2021, 11:09 AM   #55
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In this scenario, one person still has 6 million dollars to the other persons 60k, or 9900% more money

I'm sure theyll be fine even if it was 40%
Well, if you want to use actual numbers:

Tax on $100k: $26k

Tax on $10M: $4.77M

So they are not both paying 40%

Just bringing more accurate numbers, if they are going to be thrown around
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Old 09-22-2021, 11:10 AM   #56
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because the people who make the rules benefit from it being this way and we are okay with it because theres this real idea (that you can even see in this thread ) of rich people worship in most developed societies where people are terrified that if they tax the rich appropriately theyll move to Uganda or something and we will all be poor when the nice rich people leave
yeah, no

the CRA is a hungry dog on a juicy bone for any source of tax revenue
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Old 09-22-2021, 11:15 AM   #57
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I mean, lets us a hockey player as an example. We all hear guys getting paid $9M per year to play hockey, but only get to keep roughly half of that as take home pay. Why? Because a big chunk goes to taxes. Are you saying those guys are all skirting the law and paying less taxes than you and me?
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Old 09-22-2021, 11:24 AM   #58
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LOL. No one making $10 million is paying 40%. That's naive. They probably pay less than you or I.
This is a load of crap - please give me your professional background as to how you can make this comment or alternatively some documented real examples.

My wife is a CPA and a tax practitioner dealing with very high wealth individuals. If they are making $10M in a year personally, they are paying MORE than 40% in their marginal tax rates. There are only so many levers that can be pulled here in Canada that can reduce your rates - ie. charities, income splitting, personal corps, RRSPs, TFSAs, etc.
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Old 09-22-2021, 11:24 AM   #59
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Do you have any specific examples?

Because my experience, in working with people that are making 7 digits, is that they are paying quite a bit.

Does everyone do everything they can to minimize or defer how much they pay? Of course - that is how it works, as long as you remain within the law. But if you make money, you are paying tax.
I'm saying just because the tax rate is 40%(or whatever), it's not like they are paying that. Anyone making that kind of money is going to use whatever methods they can to reduce below the 40%. Yes, it's all legal, but it also means throwing out that they pay 40% is not really accurate. And yes, it also applies to the person making 50k not actually paying what their tax bracket puts them at.


I have no idea what the rich actually pay, but I'd be pretty blown away if they actually pay out near the highest rate they could theoretically pay.
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Old 09-22-2021, 11:25 AM   #60
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I mean, lets us a hockey player as an example. We all hear guys getting paid $9M per year to play hockey, but only get to keep roughly half of that as take home pay. Why? Because a big chunk goes to taxes. Are you saying those guys are all skirting the law and paying less taxes than you and me?
For hockey players, it all counts as income. So deductions, other than the agent's fees, are minimal. Those guys pay a lot of tax.
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