I’ve written before about the issue of whether the rich pay their fair share of tax. Using data from the past on tax brackets and who paid what, I showed that prior to a whole range of tax cuts since 2005, the “rich” were already paying most of the taxes in Canada. The tax cuts that have come in since then have primarily been aimed at the lower end of the income spectrum – cutting the lowest tax rate but not touching the upper rates.
That hasn’t stopped Canada’s left from braying on about how the rich don’t pay their fair share.
Importing their thoughts and their slogans from the US, where even there the rich pay most of the tax and the bottom half pays next to nothing, Canada’s left is trying to reignite class warfare.
On Saturday I posted a column from John Robson that cast doubt on the Broadbent Institute’s claim, through a rather strange poll, that said Canadians want to pay more in tax.
Robson disputed the poll and that led to online comments regarding the need for the wealthy to “pay their fair share.”
It seems facts don’t matter in this argument, just a well worn slogan.
So what is the truth?
Well according to Stats Canada figures put forward by the Canadian Taxpayers Federation, Canada’s tax system does not squeeze the middle and let the wealthy off without “paying their fair share.”
The chart below breaks down how many people are in each income bracket according to their tax filings. It details how much each group earns, what share of the national income pie that amounts to and what their share of the tax pie is.
The top 10.3% of Canadians, by income – meaning people making $80,000 and up – paid 56.9% of all income tax in 2009. This group earned 36.7% of all income claimed on tax returns but paid 56.9% of all tax.
The top 2.1% of Canadians by income – meaning people making $150,000 and up – paid 29.9% of all income tax in 2009. This group earned 16.1% of all income claimed on tax returns but paid 29.9% of all tax.
In fact if you look at “Total tax paid” column and compare each income group to “Total income declared” you will see that all groups below $60,000 in income take a bigger share of the income pie than they pay into the tax pie. The disparity grows as you go down the income scale. The reverse happens as you go above $60,000, the share of the tax pie grows while the share of the national income pie shrinks by comparison.
Defenders of the so-called “progressive” tax system will claim that this is as it should be. But if the rich are already paying more, significantly more, how can these people then claim that the rich also are not paying their fair share.
It makes no sense.