Penalized for working.

[petros]

Why do we tolerate a tax system that penalizes working?

Would you be willing to pay a 25% GST type consumption tax if income tax were eliminated?

At first thought it sounds harsh to pay but keep in mind producer and import taxes would plummet and so would retail goods thus having little impact on the poor and finally including them in the tax scheme.

Our current system discourages overtime for those willing to earn more. A large number of tradesmen only work 3/4 of the year because it's pointless in the long run..

What do you think?

 

[bobnoorduyn]

What do I think? I recently opened an old pay stub, (I do that occasionally just to make sure they are actually paying me as much as they say they are), and this was a separate one for a small stipend of $425. The only deductions were for Federal and Provincial taxes, CPP and EI, my net was $198. WTF!!!!. I get less than half of what I worked for :angryfire:. Don't ask me what I think, and don't even dare claim I earn too much, (unless you want to try to do my job).

 

[petros]

What do I think? I recently opened an old pay stub, (I do that occasionally just to make sure they are actually paying me as much as they say they are), and this was a separate one for a small stipend of $425. The only deductions were for Federal and Provincial taxes, CPP and EI, my net was $198. WTF!!!!. I get less than half of what I worked for :angryfire:. Don't ask me what I think, and don't even dare claim I earn too much, (unless you want to try to do my job).

Sounds like a 25% tax would save you ****lodes and leave enough for saving money rather than going into debt through credit.

 

[VanIsle]

What do I think? I recently opened an old pay stub, (I do that occasionally just to make sure they are actually paying me as much as they say they are), and this was a separate one for a small stipend of $425. The only deductions were for Federal and Provincial taxes, CPP and EI, my net was $198. WTF!!!!. I get less than half of what I worked for :angryfire:. Don't ask me what I think, and don't even dare claim I earn too much, (unless you want to try to do my job).

Hi Bob,
Haven't seen you around in ages. How are things? We pay those taxes because we are the passive Canadians and - our government knows we will do little more than pay lip service to it.

 

[Cliffy]

Hi Bob,
Haven't seen you around in ages. How are things? We pay those taxes because we are the passive Canadians and - our government knows we will do little more than pay lip service to it.

So much for "Canadians Kick Ass!", eh!

 

[Slim Chance]

Why do we tolerate a tax system that penalizes working?

Would you be willing to pay a 25% GST type consumption tax if income tax were eliminated?

At first thought it sounds harsh to pay but keep in mind producer and import taxes would plummet and so would retail goods thus having little impact on the poor and finally including them in the tax scheme.

Our current system discourages overtime for those willing to earn more. A large number of tradesmen only work 3/4 of the year because it's pointless in the long run..

What do you think?

Talk to any economist that is objective and they will support the institution of a consumption tax. Even if there was a moderate tax rate >10% along with a consumption tax, the benefits to the community would be enormous.

As it stands right now, the middle income earners are in a grey-zone where earning more income ends up netting them only a slightly higher incremental net amount that it isn't worth the time or risk. On the high side of the income scale; tax shelters, offshore business' or outright physical relocation of the business, individual and capital to more tax-friendly jurisdictions makes a lot of sense.

The fall-out is that either less income tax is paid (relative to maximum potential) orthe money flees and pays into another community.

 

[petros]

The fall-out is that either less income tax is paid (relative to maximum potential) or the money flees and pays into another community.

In a consumer based economy like we have there is no way tax revenue would drop. It can only increase over a far broader range taxpayers. Municipal taxes would also drop as their costs are lowered or they can remain the same and offer more services and actually be able to fix the roads without some Bennet make work program from the 30's.

 

[TenPenny]

Our current system discourages overtime for those willing to earn more. A large number of tradesmen only work 3/4 of the year because it's pointless in the long run..

What do you think?

I think those tradesmen (and I know lots of them who say this) need to sharpen up their math skills.

In our present system, what's the difference in taxes between a guy who makes a salary of $125,000/year ($4,808.00 biweekly), and a guy who makes $75,000/year base ($2,885.00 biweekly), and does $50,000 in overtime during March, April, and May ($8,333.00 OT per pay period x 6 pay periods), assuming he gets paid biweekly?

 

[Slim Chance]

In a consumer based economy like we have there is no way tax revenue would drop. It can only increase over a far broader range taxpayers. Municipal taxes would also drop as their costs are lowered or they can remain the same and offer more services and actually be able to fix the roads without some Bennet make work program from the 30's.

My comment was based on the existing progressive tax system and the effects of increasing the burden on specific income earners.

I'm all for a consumption tax; I believe that it would spur growth in many sectors.

 

[JLM]

Why do we tolerate a tax system that penalizes working?

Would you be willing to pay a 25% GST type consumption tax if income tax were eliminated?

At first thought it sounds harsh to pay but keep in mind producer and import taxes would plummet and so would retail goods thus having little impact on the poor and finally including them in the tax scheme.

Our current system discourages overtime for those willing to earn more. A large number of tradesmen only work 3/4 of the year because it's pointless in the long run..

What do you think?

Probably a good idea. That way you have more to spend and hence you can decide just what purchases you want to pay tax on and which you don't and that way it would discourage those who are ripping us off marketing junk because while previously we might in a moment of weakness buy it would now refrain when we see it will cost us 25% more for the junk. I'm all for trying it.

 

[Johnnny]

i dont know what you mean by 25% tax idea there...

My last cheque i got paid for 11 days and they took off

$81.83 Gov Pen
$202.92 Federal Tax
$33.55 EI contribution

would i benifit if they get rid of income tax i dont know

 

[Machjo]

Why do we tolerate a tax system that penalizes working?

Would you be willing to pay a 25% GST type consumption tax if income tax were eliminated?

At first thought it sounds harsh to pay but keep in mind producer and import taxes would plummet and so would retail goods thus having little impact on the poor and finally including them in the tax scheme.

Our current system discourages overtime for those willing to earn more. A large number of tradesmen only work 3/4 of the year because it's pointless in the long run..

What do you think?

I could see a low income tax with most of the taxes shifted to a resource tax.

As for overtime, I'd say let each company decide for itself what the policy should be there. A simple solution would be co-determination legislation to create the necessary mechanisms to allow workers to negotiate a fair overtime policy for themselves. Some want to work overtime.

 

[YukonJack]

All this would irrelevant if income tax were replaced by consumption tax.

With the additional benefit of not paying thousands of drones who produce NOTHING, whose only justification of existance is running rough-shod over people whose work benefit the nation.

 

[Avro]

Wow, does this mean that someone may cry for real after they had been wronged?

Who knew.:roll:

....but you know those crazy emotional women always faking it to get their way.

 

[Machjo]

All this would irrelevant if income tax were replaced by consumption tax.

With the additional benefit of not paying thousands of drones who produce NOTHING, whose only justification of existance is running rough-shod over people whose work benefit the nation.

You say consumption tax, but that's ambiguous. There are various kinds of consumption taxes. Personally, I'd prefer a resource tax at the source over something like the GST and here's why:

A general consumption tax taxes not just the natural resources used, but the WORK put into it too, making it like an income tax then.

Let's compare:

A resource tax: the mining company, lumber company, petroleum company, etc. pays a certain tax on the minerals it digs from the ground, but then when it sells those same minerals to the processing plants, and then the car and airplane and bicycle companies etc., if they increase the value of those metals by actually making something out of them, then at least the work put into developing the natural resource isn't taxed.

A general consumption tax at the retail level: then that tax covers the cost not just of the natural resource, but of all the work put into it too, along with certain services that might make little use of those resources, essentially making it just another form of income tax.

So if the concern is with not taxing WORK, then a resource tax at the source is the only way to do that.

 

[Machjo]

To put it another way:

Let's say I discover gold in the field right behind my house. Is it reasonable to tax the gold? Sure it is, since I put no work into 'producing' the gold. It was just there. Also, since it's on public land, that gold is a public resource and all have a right to benefit from it. So yes, it's fair to tax the gold.

But once I start digging, pulling the gold out of the ground, melting it down, building semiconductors and other electronic components out of it, marketing it, establishing a distribution network for it, etc. etc. etc. all of that is work and should not be taxed. A moderate income tax might be fair enough, but otherwise it should primarily be a resource tax.

And this is the difference between a resource tax and a consumption tax. A resource tax taxes the resource alone. A consumption tax taxes the work put into it too.

So to support a general consumption tax because you don't want your work to be taxed merely reveals you didn't put too much thought behind it. To prevent the tax from affecting work, then it must be on the resource itself.

 

[YukonJack]

Machjo, since I am now retired (have been for seven years) I do not do any work to be taxed.

Yet, I am paying roughly 40% on my company pension, investment income and even on government provided Canada Pension and Old Age Security.

Now, my needs are small. Therefore I think it would be far more fair that I should be taxed on what I consume, rather than what my income is.

 

[Avro]

Talk to any economist that is objective and they will support the institution of a consumption tax. Even if there was a moderate tax rate >10% along with a consumption tax, the benefits to the community would be enormous.

As it stands right now, the middle income earners are in a grey-zone where earning more income ends up netting them only a slightly higher incremental net amount that it isn't worth the time or risk. On the high side of the income scale; tax shelters, offshore business' or outright physical relocation of the business, individual and capital to more tax-friendly jurisdictions makes a lot of sense.

The fall-out is that either less income tax is paid (relative to maximum potential) orthe money flees and pays into another community.

Steven Harper was one of those economists.....look what he did.

Raising a consumption tax would penalise the poor.

If that were offset somhow, I'd support a higher HST wth lower income tax or even a flat tax with zero loopholes.

My wife does all our accounting so I don't all of them but we benefit quite a bit with loopholes.....and if you own a buisness...it's just sick what you can get away with.

 

[Machjo]

Machjo, since I am now retired (have been for seven years) I do not do any work to be taxed.

Yet, I am paying roughly 40% on my company pension, investment income and even on government provided Canada Pension and Old Age Security.

Now, my needs are small. Therefore I think it would be far more fair that I should be taxed on what I consume, rather than what my income is.

I guess if you put it that way, a general consumption tax is still better than an income tax overall. But here's another way to look at it:

A general consumption tax: You pay no matter what you buy. Whether you pay a tour guide to walk you around town or a museum, or whether you're buying a car, you're paying the same tax.

A resource tax at the source: Since the tour guide is consuming about no more resources than the rubber on the sole of his shoes and, if indoors in a museum, electricity (unless it's daytime and the museum has big windows?), you'll be paying little to no tax for his services; if you buy a car, you pay indirectly for the metals and other resources used in its construction.

So with a general consumption tax, there is no way to avoid paying it. Essentially, unless you're planning on never spending your money, you'll pay the tax sooner or later. With a resoruce tax at the source, you can minimize the tax depending on how you spend your money, so with that you at least have the option of spending strategically so as to pay less tax if you want to.

 

[Machjo]

Steven Harper was one of those economists.....look what he did.

Raising a consumption tax would penalise the poor.

If that were offset somhow, I'd support a higher HST wth lower income tax or even a flat tax with zero loopholes.

My wife does all our accounting so I don't all of them but we benefit quite a bit with loopholes.....and if you own a buisness...it's just sick what you can get away with.

Yes a consumption tax penalizes the poor, but there are ways around it. In Europe, they have high consumption taxes too, but then again in Germany they also have co-determination legislation, in some countries post-secondary education of some kind is free for all, etc. There can be various ways of counterbalancing this.