Taxes for the Rich

The rich get a raw deal, right?

Photo by Geoff Brooks on Unsplash

A Canadian entrepreneur is moving to London, England. It seems income taxes in Canada are too high. Britain is attracting this wealthy economic class with an almost zero tax rate.

Let’s start this essay with a picture of taxes paid by all sorts of citizens.

Here are the 2016 marginal tax rates (with a little rounding to make my calculations a little easier):

From there, I calculated the federal taxes at different income levels:

I should add that the above table is for federal taxes. The provinces have their own income tax brackets and rates. As a general rule, provincial taxes are about 50% of federal taxes. When provincial taxes are considered, the $25,000 earner would take home about $22,000 and the $1,000,000 earner would take home about $550,000.

With provincial taxes, that $1,000,000 earner being taxed at 45%. If paying a 45% tax rate is too much from a moral perspective, a high-income earner has the freedom to reduce his or her workload. Other aspiring citizens will be happy to pick up this slack.