dave@lsuc.on.ca (David Sherman) (06/12/89)
What with the recent federal budget (April 27, more or less:-)
and Ontario budget (May 17), it might be useful to remind people
of what the current tax brackets and rates are.
First, here are the raw numbers for 1989:
Federal tax on taxable income (after all deductions): 17% on
first $27,803; 26% on excess up to $55,605; 29% on excess.
Federal surtax: 4% of federal tax. (Will be 5% in 1990.)
Ontario tax (1989): 52% of federal tax. (Will be 53% in 1990.)
Additional federal surtax: 1.5% of federal tax over $15,000.
(Will be 3% in 1990.) So the total federal surtax is 5.5% for
income over about $72,000. Additional Ontario surtax: 10% of
Ontario tax over $10,000. This brings the total Ontario tax to
52x1.1 = 57.2% of federal tax for incomes over about $80,000.
Other provinces' provincial tax rates vary, but all except
Quebec are calculated as a percentage of federal tax.
Some provinces also have a so-called "flat tax" on net income,
and other surtaxes.
What does this mean in terms of tax brackets? You can use the
table below to figure out your marginal tax rate (ie., for purposes
of calculating what you get our of one more dollar earned, or what
one more dollar of deduction is worth to you). To calculate what
it means in terms of tax payable, you need to factor in all deductions
and credits, of course. This table is for Ontario residents.
Taxable income Total tax (federal + Ontario)
============== =============================
$0 - $27,803 26.52%
$27,803 - $55,605 $ 7,373 + 40.56% on excess over $27,803
$55,605 - $72,105* $18,649 + 45.24% on excess over $55,605
$72,105 - $80,694* $26,114 + 45.675% on excess over $72,105
$80,694 and up $30,037 + 47.183% on excess over $80,694
NOTE: the $72,105 applies for a single taxpayer with no other credits.
Because the surtax applies to federal tax after credits, someone
with more credits (e.g., dependents, charitable donations, old age,
tuition, UIC and CPP) will have lower tax and the extra surtax on
federal tax over $15,000 will kick in later. The extra Ontario
surtax will also kick in later than $80,694 for the same reason.
The bottom line is still that the marginal rate stays under 50%,
meaning that even with a high income you'll keep over half of
extra money you earn.
David Sherman
--
Moderator, mail.yiddish
{ uunet!attcan att utzoo }!lsuc!dave dave@lsuc.on.cagerard@uwovax.uwo.ca (Gerard Stafleu) (06/14/89)
In article <1989Jun12.133058.28912@lsuc.on.ca>, dave@lsuc.on.ca (David Sherman) writes: [Interesting article and table deleted] > The bottom line is still that the marginal rate stays under 50%, > meaning that even with a high income you'll keep over half of > extra money you earn. Well, the marginal _income_ tax rate stays under 50%. But do we keep over half of the extra money we earn? As an example, lets us take someone in the 27,803 - 55,605 bracket. This person has a marginal income tax rate of (rounded) 40%. Now let us look at the various sales taxes. Provincial: 8% in Ontario, a little more or less elswhere (ok, a _lot_ less in Alberta!). Federal: 11%. Of course we don't pay these taxes on everything. And the national sales tax is coming. As a round figure though, let us say an "average" sales tax of 15%. This means that of the 60% our example person has left, 15% goes to sales taxes, which comes to 9% of total. We are now up to a 49% marginal tax rate. Then there are property taxes, which you also pay if you rent (part of your rent goes to the landlords property taxes). I only have my property taxes to go by, they are about 3%. So we are now up to 52% marginal tax rate. And the list no doubt goes on. One can argue about UIC and provincial health plans. There are gas taxes, all the "sin" taxes, and all the other federal, provincial and municipal taxes, fees and levies. All in all, I would say that of every extra dollar our example person earns, more than 50% goes to some form of goverment as some form of taxes. I realize that this reasoning tends to cross the border between "marginal tax rate" and "total tax pressure". There are two numbers I would be interested to know. The first is the total tax pressure, defined as: GNP ------------------------------------------------------------------------ Total of all taxes, fees and levies collected by all levels of goverment Also interesting is the "total personal tax pressure": Sum of all personal income --------------------------------------------- Taxes etc. payed by people having such income I would be inclined to call this number the "real" marginal tax rate, although I realize I'm open to accusations of terminological confusion. Unfortunately, I don't have these numbers. Does anyone?
chk@dciem.dciem.dnd.ca (C. Harald Koch) (06/14/89)
In article <1989Jun12.133058.28912@lsuc.on.ca> dave@lsuc.on.ca (David Sherman) writes: >[...] >The bottom line is still that the marginal rate stays under 50%, >meaning that even with a high income you'll keep over half of >extra money you earn. Although this has little to do with the original posting... It is interesting to subtract federal and provincial sales taxes from the remaining 50+% to see how much you are *really* paying to the government. Also, if you smoke, drive, drink beer, etc. calculate the (huge) taxes etc. on those expenses. Pretty soon you find that everyone works for the government about 9 months of the year... :-) -- Grandpa Charnock's Law: | C. Harald Koch NTT Systems, Inc., Toronto, Ontario You never really learn | chk@gpu.utcs.utoronto.ca (long-term address) to swear until you learn | chk@zorac.dciem.dnd.ca (my current job) to drive. | chk@chkent.UUCP (my AMIGA at home)
sccowan@watmsg.waterloo.edu (S. Crispin Cowan) (06/15/89)
In article <2311@uwovax.uwo.ca> gerard@uwovax.uwo.ca (Gerard Stafleu) writes: >In article <1989Jun12.133058.28912@lsuc.on.ca>, dave@lsuc.on.ca (David Sherman) writes: >[Interesting article and table deleted] >> The bottom line is still that the marginal rate stays under 50%, >> meaning that even with a high income you'll keep over half of >> extra money you earn. [nifty analysis] > GNP >------------------------------------------------------------------------ >Total of all taxes, fees and levies collected by all levels of goverment > > >Also interesting is the "total personal tax pressure": > > Sum of all personal income >--------------------------------------------- >Taxes etc. payed by people having such income > >I would be inclined to call this number the "real" marginal tax rate, >although I realize I'm open to accusations of terminological confusion. >Unfortunately, I don't have these numbers. Does anyone? I believe non-voluntary taxes (i.e. most of them) to ba a form of armed extortion: pay them, or else armed people will come to take you away. "Never shoot at tax collectors while drunk--you might miss." (or something to that effect) Lazarus Long (a.k.a. Robert Heinlen) Does anyone know of a serious lobby group pushing for lower taxes (and spending, of course) that one could join? I'm really tired of paying for expensive government services that I didn't ask for and don't want. ---------------------------------------------------------------------- Login name: sccowan In real life: S. Crispin Cowan Office: DC3548 x3934 Home phone: 570-2517 Post Awful: 60 Overlea Drive, Kitchener, N2M 1T1 UUCP: watmath!watmsg!sccowan Domain: sccowan@watmsg.waterloo.edu "Everything to excess. Moderation is for monks." -Lazarus Long
dan@sparkles.dcss.McMaster.CA (Dan Trottier) (06/15/89)
In article <2311@uwovax.uwo.ca> gerard@uwovax.uwo.ca (Gerard Stafleu) writes: >In article <1989Jun12.133058.28912@lsuc.on.ca>, dave@lsuc.on.ca (David Sherman) writes: >[Interesting article and table deleted] >> The bottom line is still that the marginal rate stays under 50%, >> meaning that even with a high income you'll keep over half of >> extra money you earn. >[List of taxable items deleted] > So we are now up to 52% >marginal tax rate. > >And the list no doubt goes on. One can argue about UIC and provincial >health plans. There are gas taxes, all the "sin" taxes, and all the >other federal, provincial and municipal taxes, fees and levies. All in >all, I would say that of every extra dollar our example person earns, >more than 50% goes to some form of goverment as some form of taxes. You can added import duties to that list. This indirect tax results in much higher prices for many goods that are produced outside the country. The part I hate is having to pay sales tax on top of the duties levied against some imported goods. The result is paying tax on taxes. For an item that costs $100.00 you're paying $111.00 after federal sales tax and then you have to pay 8% of that in provicial sales tax. That raises the price to $119.88. So the combined federal and provicial sales tax is not 19% but rather closer to 20%. -- Dan Trottier dan@maccs.McMaster.CA Dept of Computer Science ...!uunet!utai!utgpu!maccs!dan McMaster University (416) 525-9140 x3444
landolt@yunexus.UUCP (Paul Landolt) (06/16/89)
In article <27113@watmath.waterloo.edu> sccowan@watmsg.waterloo.edu (S. Crispin Cowan) writes: >I believe non-voluntary taxes (i.e. most of them) to ba a form of >armed extortion: pay them, or else armed people will come to take you >away. [...] >Does anyone know of a serious lobby group pushing for lower taxes (and >spending, of course) that one could join? I'm really tired of paying >for expensive government services that I didn't ask for and don't >want. > Everyone wants to reduce taxes, but, I have yet to see a party that will do anything about it. In fact, they all _say_ they will cut taxes. As a Heinlen reader, you might remembe the quote from one of his books. he was talking about a Governor that, if elected, promised "an above- average income for all". Think about it. But, I digress. The Libertarian party is one of the few parties who's mandate is "Good government is less government". It believes in gettint the government out of where it doesn't belong, and having corporate (and private support) of some services. If you want to get more information, you can write to: The Ontario Libertarian Party #1 St Johns Road Suit 301 Or, better yet, call (416) 769-3223 (thats area code 416, SUX-FACE :) I would like it known that I neither endorse nor support this party. Although I happen to know the address, its because I have contacts. -- J. Paul Landolt | It'll be done in another week, so Computing Services | GET OFF MY BACK! York University - Toronto, Canadia | --------------------------------- InterNet: landolt@nexus.YorkU.CA | My opinions. All mine. So sue me.