Future taxation

[someone123]

Why should we be paying any OAS to people who make $100,000 a year, which is well above the median income in Canada?

[Truenorth00]

Originally Posted by WarrenC12

.
Alberta favors higher income earners, it's that simple. They think flat taxes are better than more progressive marginal rates.

https://www.eytaxcalculators.com/en/2020-personal-tax-calculator.html

Looks like if you make more than $146k, Alberta taxes you less.

[MonctonRad]

Originally Posted by Truenorth00

Slightly off-topic but I've always wondered why doctors have always wanted to be contractors and not state employees with pensions and benefits.

Freedom, pure and simple.

Freedom to practice medicine as you see fit, as long as it is accordance with professional standards.

Freedom to work as hard as you want, as long as you fulfill your professional obligations (hospital and group on call responsibilities). Some physicians (mostly female GPs) only want to work part time. Others (mainly male surgeons) want to have 80 hour work weeks.

Freedom to retire when you want. Some physicians like Freedom 55 (again mainly female GPs), while other want to die with their boots on. I have one male colleague in my group who is still going strong at 80. He does good quality work too.

Freedom to organize your work day, and to concentrate on the areas of your specialty that you enjoy the most, or the procedures that you prefer doing, again ensuring through agreements with your colleagues that all areas under your department's jurisdiction are covered. This is usually easier to arrange internally than it is by a managerial edict from above.

Freedom to act as a patient advocate regardless of what official government policies and directives are. The government's chief goal is to provide minimal health care services at the lowest possible cost. Physicians advocate for their patients to receive somewhat better service than what the government wants. Sometimes we are successful. Sometimes not.

Above all, the infinite desire to distance ourselves from any form of government bureaucracy whatsoever. We know what a horror show most regional health authorities are. We have to deal with them every day during the course of our hospital work. We have no desire to be any further under the government's thumb than we already are.

[WarrenC12]

Originally Posted by Zmonkey

Progressives in BC like low-income taxes in this country too.

BC pays a ton of other taxes and fees. MSP was recently replaced with an employer health tax. We have a carbon tax that is only refunded to low income individuals. Of course the PST has no comparison in Alberta.

Not sure what your point it. We had a right leaning government in power for 16 years who made dramatic changes to the provincial income tax rates.

There is a crossover in provincial income tax rates between BC and Alberta around $150k, and above that, it starts to get dramatically higher for the super high income earners in BC.

[Truenorth00]

Originally Posted by someone123

Why should we be paying any OAS to people who make $100,000 a year, which is well above the median income in Canada?

We shouldn't. But find me a party that is willing to pass up the votes of seniors.

[theman23]

Originally Posted by MonctonRad

Freedom, pure and simple.

Freedom to practice medicine as you see fit, as long as it is accordance with professional standards.

Freedom to work as hard as you want, as long as you fulfill your professional obligations (hospital and group on call responsibilities). Some physicians (mostly female GPs) only want to work part time. Others (mainly male surgeons) want to have 80 hour work weeks.

Freedom to retire when you want. Some physicians like Freedom 55 (again mainly female GPs), while other want to die with their boots on. I have one male colleague in my group who is still going strong at 80. He does good quality work too.

Freedom to organize your work day, and to concentrate on the areas of your specialty that you enjoy the most, or the procedures that you prefer doing, again ensuring through agreements with your colleagues that all areas under your department's jurisdiction are covered. This is usually easier to arrange internally than it is by a managerial edict from above.

Freedom to act as a patient advocate regardless of what official government policies and directives are. The government's chief goal is to provide minimal health care services at the lowest possible cost. Physicians advocate for their patients to receive somewhat better service than what the government wants. Sometimes we are successful. Sometimes not.

Above all, the infinite desire to distance ourselves from any form of government bureaucracy whatsoever. We know what a horror show most regional health authorities are. We have to deal with them every day during the course of our hospital work. We have no desire to be any further under the government's thumb than we already are.

There are definitely perks to be an employee, but on the whole I do wonder if it’s better this way. The biggest barrier I see is the obligation the employer that come with being a salary earner.

Health authorities spend an excessive amount of time on buffing the numbers. Patient move outs and discharges are their performance metrics. It’s of no interest to them if a patient goes home and is trapped on the floor for two weeks on a pile of their own excrement, as long as they don’t come back early enough to be captured in the statistics as a bounce back.

Okay, that’s maybe a bit of an exaggeration, but it certainly seems that way at times. Physicians are largely shielded from this single minded obsession because they are independent.

[Me&You]

Originally Posted by Truenorth00

...
Most are entrepreneurs or working professionals. Particularly medical professionals.

So trying to tax their income, in particular, is going to have some adverse effects. We'll be back to the 90s when doctors, engineers and anyone with a decent idea was fleeing the country.



We need to decide what the purpose of our tax system is. If it's just to pay for services, that simplest and broadest taxes are best. ie consumption taxes.

If we're trying to address income inequality, then progressive taxation, which we already do.

But the problem that a lot of people have is with wealth disparity. Not income disparity. Though a lot of people conflate the two. And the largest part of that wealth disparity comes from capital gains... And at a certain point that goes well beyond what somebody can actually earn through skill. In other words the return on capital is substantially surpassing the return on labour. The only way I can think of addressing that is through 100% inclusivity on capital gains. How to implement that without hurting investment though is an important question. Especially in an era where startups often reward early investors and employees with shares.

Originally Posted by Truenorth00

Probably the safest way to tackle wealthy inequality is inheritance taxes. Doesn't hurt the person when they are alive. And compels the offspring to actually compete a bit more on skill than wealth. But these are also easy to game and dodge.

I see a bit of a logical disconnect here, or at least, a lack of understanding of perspective of those you're looking to affect.

On one hand you argue that we should be careful not to scare away professionals and entrepreneurs through income taxation, but then argue for an inheritance tax. From where I sit, an inheritance tax is far more likely to chase away professionals or move some to 'creative accounting', than raising income taxes. The grand motivation for most professionals and entrepreneurs isn't to be able to make lease payments on the Bentley; it's to be able to provide long term (financial) security for your family.

[Truenorth00]

Originally Posted by Me&You

I see a bit of a logical disconnect here, or at least, a lack of understanding of perspective of those you're looking to affect.

On one hand you argue that we should be careful not to scare away professionals and entrepreneurs through income taxation, but then argue for an inheritance tax. From where I sit, an inheritance tax is far more likely to chase away professionals or move some to 'creative accounting', than raising income taxes. The grand motivation for most professionals and entrepreneurs isn't to be able to make lease payments on the Bentley; it's to be able to provide long term (financial) security for your family.

You ever been involved in a startup? I don't know anyone who does that who thinks about saving for their family. If they did, they'd be working 9-5. Maybe once they get wealth.....

I'm not particularly wedded to any particular idea though. I'm just curious what the goals are or should be of the tax system. I personally have no issues paying higher sales taxes or income taxes to balance the books.

[someone123]

People mean different things when they say startup, but if you're talking about potential billion-dollar tech startups which lead to multi-million dollar exits for founders and perhaps early employees, it's an industry where the odds of success are low but the payout is large if you are successful.

You might have a 90% chance of making $0 or a 10% chance of making $10,000,000 or more after 5 years as a founder.

An inheritance tax doesn't change the expected payoff of this much. Either you "make it" and you are pretty well off either way, or you don't and the taxes don't matter. Also, even if there is an inheritance tax, you will ideally provide for your family before the inheritance. Even if the inheritance tax is 100% you can still pay for school for your kids, etc. This is a much more important way that parents ensure the success of their children than whether the richest pass down $10M or $5M.

The biggest problem of an inheritance tax seems like it wouldn't be a good way of raising money. It must be one of the most easily avoided taxes out there.

[khabibulin]

Originally Posted by ssiguy

I think the days of the Zoomers & Boomers considering themselves the untouchable Patricians of society are finally coming to an end. They have enjoyed the highest wages, standard of living, and wealth accumulation in history and have used it to their political advantage exceptionally well. Now of course they are starting to kick the bucket and younger people are starting to get pissed off at governments treating Boomers with kid gloves while they struggle to pay rent and pay off their student loans.

I think many new taxes are going to be aimed at this very spoiled demographic as their political power starts to {finally} come to an end.

Are you aware that almost one-third of Canadians are 55 and older? That's a lot of votes, from the age group that is most likely to vote. Any political party will be reluctant to aim new taxes at seniors.

[lubicon]

Originally Posted by Truenorth00

Slightly off-topic but I've always wondered why doctors have always wanted to be contractors and not state employees with pensions and benefits.

On top of what MonctonRad stated (absolutely true) also keep in mind the chances of a pension are probably zero. I can't see any government bringing on a new group of employees and offering a defined benefit pension. So doctors would be doing what they are doing now and that is contributing to their own retirement.

[kwoldtimer]

Originally Posted by someone123

Why should we be paying any OAS to people who make $100,000 a year, which is well above the median income in Canada?

At that level of taxable income, about half your OAS would be "clawed back", no?

[whatnext]

Not strictly taxation, but I fail to see why Canadians continue to have to subsidize the CBC to a tune of $1 Billion a year. I'm not a rabid Tory CBC-hater but I just don't see that they do anything the private sector couldn't do, without costing tax dollars.

[khabibulin]

Originally Posted by swimmer_spe

The GST was supposed to be temporary. Over 20 years later, it still exists. I would argue that saying it is temporary is the only way that they can make themselves electable.

The GST was never intended to be temporary.

"In 1989, the Progressive Conservative government of Prime Minister Brian Mulroney and his finance minister Michael Wilson proposed the creation of a national sales tax of 9%. At that time, every province in Canada except Alberta already had its own provincial sales tax imposed at the retail level.
The purpose of the national sales tax was to replace the 13.5% Manufacturers' Sales Tax (MST) that the federal government imposed at the wholesale level on manufactured goods. Mulroney claimed the GST was implemented because the MST was hindering the manufacturing sector's ability to export competitively. Manufacturers were concerned that the tax hurt their international competitiveness. The GST also replaced the Federal Telecommunications Tax of 11%."

https://en.wikipedia.org/wiki/Goods_and_services_tax_(Canada)

[SkeggsEggs]

Originally Posted by someone123

People mean different things when they say startup, but if you're talking about potential billion-dollar tech startups which lead to multi-million dollar exits for founders and perhaps early employees, it's an industry where the odds of success are low but the payout is large if you are successful.

You might have a 90% chance of making $0 or a 10% chance of making $10,000,000 or more after 5 years as a founder.

An inheritance tax doesn't change the expected payoff of this much. Either you "make it" and you are pretty well off either way, or you don't and the taxes don't matter. Also, even if there is an inheritance tax, you will ideally provide for your family before the inheritance. Even if the inheritance tax is 100% you can still pay for school for your kids, etc. This is a much more important way that parents ensure the success of their children than whether the richest pass down $10M or $5M.

The biggest problem of an inheritance tax seems like it wouldn't be a good way of raising money. It must be one of the most easily avoided taxes out there.

US numbers on how many people paid an estate tax:

In 2017 only about 5,000 who died paid an estate tax (2 of 1,000 deaths) ($5 million exemption)
In 2018 only about 1,800 who died paid an estate tax (1 in 1,000 deaths) ($11 million exemption)

It brought in more than $20 billion in 2008 and less than $10 billion in 2012. I would expect a lot less now since the exemption has been increased so much. Though when the returns get audited they tend to be recommended an additional tax of $532,542 per return in 2018.

The gift tax only brought in $1,7 billion in 2017 from 240,000 returns filed. Probably a lot less in 2018 with the doubling of the exemption.\

Considering Canada's population I can't imagine it would really be worth the effort especially not until the US lowers their exemption significantly.

[theman23]

Originally Posted by lubicon

On top of what MonctonRad stated (absolutely true) also keep in mind the chances of a pension are probably zero. I can't see any government bringing on a new group of employees and offering a defined benefit pension. So doctors would be doing what they are doing now and that is contributing to their own retirement.

I can’t imagine any government being too eager to add on a bunch of medical office assistants, nurses, lab and radiology techs etc. to their government employee roll.

[khabibulin]

Originally Posted by Loco101

I work in the federal public service and envy what Ontario public servants make compared to us for equivalent work. If there was a federal sunshine list, there wouldn't be very many people on it considering how many federal public servants there are.

The National Capital Region is crawling with AS and PM 05's and 06's which would be on the list, or will be very soon.

[Truenorth00]

Originally Posted by khabibulin

The National Capital Region is crawling with AS and PM 05's and 06's which would be on the list, or will be very soon.

Some of those categories are just insane. Intelligence analysts with graduate degrees international relations are AS. Same as administrative assistants.

[Doug]

Originally Posted by WarrenC12

Guys....

OAS:


CCB:

Im saying push OAS eligibility back to 67 as per the Harper plan. Canceling the planned increase in the age was probably the most regressive move made by the Trudeau government. Also, claw back all of OAS and Child Tax Benefit at $75K.

OAS is an incredibly expensive program.

[Truenorth00]

Originally Posted by Doug

Im saying push OAS eligibility back to 67 as per the Harper plan. Canceling the planned increase in the age was probably the most regressive move made by the Trudeau government. Also, claw back all of OAS and Child Tax Benefit at $75K.

OAS is an incredibly expensive program.

What's also crazy is how much these programs benefit seniors while reducing assistance to working families. Why is the CCB and OAS thresholds not the same? Nothing says we support seniors more than working parents line skewing support to seniors.