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To: AC Flyer who wrote (50868)	6/10/2004 8:37:16 PM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 74559

I know this is dated but seems Canada ain't so hard on the rich after all ;o) Who pays the income tax bill? While it is possible to calculate tax rates and amounts of tax payable on an "up-to-date" basis, analysis of the income tax system as a whole has to be based on two-year-old statistics. This arises because our conclusions about how much tax the average Canadian family pays is based partly on surveys of taxpayers which Statistics Canada conducts and partly on data which Revenue Canada collects and which are released with a two-year lag. Accordingly, our analysis of who pays the income tax - and of other related questions - must be based on 1991 data. For the most part, however, we can rest assured that the relative magnitudes involved will be stable over time and, hence, that conclusions reached are reliable for 1994. In 1991, a total of 84.3 billion dollars was paid by individuals in income taxes and, as Table 2.5 shows, 53 percent of it was paid by individuals with incomes below $50,000. Individuals with incomes below $60,000 paid nearly 65 percent of the total income tax bill. In fact, 46 percent of all income taxes were paid by individuals with incomes in the relatively narrow range, $20,000 to $50,000. As column 4 of Table 2.5 shows, over half of all taxable returns were filed by individuals with incomes less than $20,000. This proportion reflects the large number of part-time workers, students employed during the summer, and other intermittent workers earning low incomes. These taxpayers generated only 6.9 percent of total tax revenue, while the top 23.1 percent of taxpayers - those declaring income of $35,000 or more - contributed 71.7 percent of the total income tax bill. An interesting aspect of the information in Table 2.5 is the relationship between taxes paid and income declared. For example, as noted above, 28.3 percent of the total income tax bill was paid by individuals with incomes below $35,000. From column 6 we discover that this group of individuals earned 44.8 percent of all the income declared. So, income earners below $35,000 paid a smaller proportion of the total tax bill than their share of total earned income might suggest. On the other hand, the top 23.1 percent of taxpayers, who had incomes in excess of $35,000, paid about 71.7 percent of the total tax bill while receiving only 55.2 percent of total income earned. The reason for this, of course, is the fact that the income tax structure is "progressive." That is, it takes a larger fraction from high incomes than it does from low incomes, as is clear from the tax rates presented in Table 2.4. Sales taxes also contribute to progressivity because even though they hit everyone at the same rate, there are sales tax rebates which vary inversely with income. Furthermore, many income transfers from the state are indexed to the price of goods, so that as the price rises due to a sales tax, so do the transfers. This eases the burden of sales taxes to the poor. We will come back to this point in the next chapter where we bring sales taxes more fully into the picture. oldfraser.lexi.net What is wrong with you guys ? Are you dare I say it .... socialists ;o)