Incomes for the richest 1% increased almost 10% in Canada in 2021
November 22, 2023 12:16 PM Subscribe
While incomes in the top 1% went up in 2021, incomes in the bottom half of the distribution decreased, according to tax filing data reported by Statistics Canada.
The threshold to be in the top 1% was $271,300, with a median income of $378,900 and an average of $579,100.
Income of the top 0.1% and 0.01% increased even more, with reporting by the CBC, Global News, and others outlining increasing income inequality as the rich continue to get richer.
The threshold to be in the top 1% was $271,300, with a median income of $378,900 and an average of $579,100.
Income of the top 0.1% and 0.01% increased even more, with reporting by the CBC, Global News, and others outlining increasing income inequality as the rich continue to get richer.
To be fair, those Hitler portraits are expensive. Or is that just an American billionaire thing?
posted by dances_with_sneetches at 1:17 PM on November 22, 2023
posted by dances_with_sneetches at 1:17 PM on November 22, 2023
I didn't realize this was also an issue in Canada like it is here in the US! What roadblocks keep you guys from taxing the rich?
posted by pelvicsorcery at 1:26 PM on November 22, 2023
posted by pelvicsorcery at 1:26 PM on November 22, 2023
That is a shockingly low threshold to be in the top 1%.
Also, setting aside income inequality problems, is this actually news? Above a certain level, money makes more money which makes more money... on and on. I don't think it's surprising that people that already have a lot of money have managed to make that money make more money.
posted by tubedogg at 1:28 PM on November 22, 2023 [4 favorites]
Also, setting aside income inequality problems, is this actually news? Above a certain level, money makes more money which makes more money... on and on. I don't think it's surprising that people that already have a lot of money have managed to make that money make more money.
posted by tubedogg at 1:28 PM on November 22, 2023 [4 favorites]
I think the problem is that the people with those incomes are the ones setting salaries for both the people at the lower end of the pay scale as well as themselves.
posted by any portmanteau in a storm at 1:30 PM on November 22, 2023 [9 favorites]
posted by any portmanteau in a storm at 1:30 PM on November 22, 2023 [9 favorites]
> That is a shockingly low threshold to be in the top 1%.
This article is talking about income, but often when people talk about "the 1%" they're talking about total wealth. The truly wealthy don't have income from jobs; they collect rent on assets (literal rent, or stock dividends and sales, etc.). Musk (*spit*) for example, has no income. He takes out loans using Tesla shares as collateral and spends that money. Debt isn't classified as income, so he also pays no income tax.
posted by riotnrrd at 1:34 PM on November 22, 2023 [6 favorites]
This article is talking about income, but often when people talk about "the 1%" they're talking about total wealth. The truly wealthy don't have income from jobs; they collect rent on assets (literal rent, or stock dividends and sales, etc.). Musk (*spit*) for example, has no income. He takes out loans using Tesla shares as collateral and spends that money. Debt isn't classified as income, so he also pays no income tax.
posted by riotnrrd at 1:34 PM on November 22, 2023 [6 favorites]
I think one problem is that Canada's richest don't have as many politicians and judges to buy off, so they naturally accumulate wealth a bit faster in that way.
posted by They sucked his brains out! at 1:39 PM on November 22, 2023 [2 favorites]
posted by They sucked his brains out! at 1:39 PM on November 22, 2023 [2 favorites]
On the CBC this morning there was a story about couples deciding not to have children because they literally cannot afford it.
We were created as a colony, we still are, but the rich and corporations are our masters now. The insane gouging in so many sectors is literally destroying people's ability to live in this country and birth rates are declining as well.
posted by Phlegmco(tm) at 1:48 PM on November 22, 2023 [3 favorites]
We were created as a colony, we still are, but the rich and corporations are our masters now. The insane gouging in so many sectors is literally destroying people's ability to live in this country and birth rates are declining as well.
posted by Phlegmco(tm) at 1:48 PM on November 22, 2023 [3 favorites]
Shit is so bad that in some ways I can't blame people who are talking about voting CPC in the next election. Thing is, that won't solve the problem, it'll just make it worse with a side order of "Freedom Convoy" shit.
posted by The Card Cheat at 2:09 PM on November 22, 2023 [3 favorites]
posted by The Card Cheat at 2:09 PM on November 22, 2023 [3 favorites]
That is a shockingly low threshold to be in the top 1%.
This may be a fairly unpopular opinion but I think all the discourse around the "1%" is actually another manifestation of the class war between people who are truly in the upper class (their wealth is in ownership not income) and everyone else. It's easier to get people who are angry about inequality to resent someone making $300k CAD a year because those people are closer at hand to hate, and the people who own the media companies who measure the growth of their wealth on scales of six digits per week or per month are very happy to have the doctors, lawyers, and engineers all around hated by the people who are getting stepped on by the 0.01%. It's Elon Musk telling minimum wage victims to hate the university professor who happens to make $300k CAD a year.
posted by tclark at 3:57 PM on November 22, 2023 [5 favorites]
This may be a fairly unpopular opinion but I think all the discourse around the "1%" is actually another manifestation of the class war between people who are truly in the upper class (their wealth is in ownership not income) and everyone else. It's easier to get people who are angry about inequality to resent someone making $300k CAD a year because those people are closer at hand to hate, and the people who own the media companies who measure the growth of their wealth on scales of six digits per week or per month are very happy to have the doctors, lawyers, and engineers all around hated by the people who are getting stepped on by the 0.01%. It's Elon Musk telling minimum wage victims to hate the university professor who happens to make $300k CAD a year.
posted by tclark at 3:57 PM on November 22, 2023 [5 favorites]
> That is a shockingly low threshold to be in the top 1%.
This article is talking about income, but often when people talk about "the 1%" they're talking about total wealth.
Agreed, but also, to the point of that comment,in the US the threshold to be in the 1% for household income is around $650k nationally, and much higher in some states.
However, all the reporting on that threshold in the US is around household income, and the Stats Canada page seems to be reporting on individual filers, if I'm reading it correctly. So I'm not sure if those numbers are directly comparable.
posted by Dip Flash at 4:00 PM on November 22, 2023 [2 favorites]
This article is talking about income, but often when people talk about "the 1%" they're talking about total wealth.
Agreed, but also, to the point of that comment,in the US the threshold to be in the 1% for household income is around $650k nationally, and much higher in some states.
However, all the reporting on that threshold in the US is around household income, and the Stats Canada page seems to be reporting on individual filers, if I'm reading it correctly. So I'm not sure if those numbers are directly comparable.
posted by Dip Flash at 4:00 PM on November 22, 2023 [2 favorites]
Shit is so bad that in some ways I can't blame people who are talking about voting CPC in the next election. Thing is, that won't solve the problem, it'll just make it worse with a side order of "Freedom Convoy" shit.
I am assured that Prime MinisterConstipated Ratface Poilievre will be a friend to the working class as well as making sure that Those People know their place. /hamburger
I know Charlie Brooker was talking about a different country’s political landscape, but I concur with his statement, “I've instinctively hated the Tories since birth. If there was an election tomorrow, and the only two choices were the Nazis or the Tories, I'd vote Tory with an extremely heavy heart.”
posted by ricochet biscuit at 4:42 PM on November 22, 2023 [1 favorite]
I am assured that Prime Minister
I know Charlie Brooker was talking about a different country’s political landscape, but I concur with his statement, “I've instinctively hated the Tories since birth. If there was an election tomorrow, and the only two choices were the Nazis or the Tories, I'd vote Tory with an extremely heavy heart.”
posted by ricochet biscuit at 4:42 PM on November 22, 2023 [1 favorite]
(the university professor who happens to make $300k CAD a year.
The what now? Is this a thing on a technicality, where upper administration are often hired/appointed as professors technically on top of their administrative position, to maintain the illusion of academic governance, even though they never see the inside of a classroom?)
posted by eviemath at 4:53 PM on November 22, 2023 [2 favorites]
The what now? Is this a thing on a technicality, where upper administration are often hired/appointed as professors technically on top of their administrative position, to maintain the illusion of academic governance, even though they never see the inside of a classroom?)
posted by eviemath at 4:53 PM on November 22, 2023 [2 favorites]
I happened to listen to the evening news today, and they were playing some bits of Pollievre speaking in Parliament, where he was trying his hardest to do some sort of branding catchphrase about “common sense conservatives”. He probably actually means it as “common cents” - cents for us common folk while billionaires accumulate more billions.
posted by eviemath at 4:56 PM on November 22, 2023
posted by eviemath at 4:56 PM on November 22, 2023
He probably actually means it as “common cents”
Maybe he meant aucun sens conservatives.
In related news, a Brit is shocked by our grocery prices...
posted by Ashwagandha at 5:38 PM on November 22, 2023 [1 favorite]
Maybe he meant aucun sens conservatives.
In related news, a Brit is shocked by our grocery prices...
posted by Ashwagandha at 5:38 PM on November 22, 2023 [1 favorite]
the Stats Canada page seems to be reporting on individual filers, if I'm reading it correctly
It's hard to tell. But I guess married Canadians don't file jointly, making it possible?
posted by praemunire at 5:46 PM on November 22, 2023
It's hard to tell. But I guess married Canadians don't file jointly, making it possible?
posted by praemunire at 5:46 PM on November 22, 2023
>(the university professor who happens to make $300k CAD a year.
The what now? Is this a thing on a technicality, where upper administration are often hired/appointed as professors technically on top of their administrative position, to maintain the illusion of academic governance, even though they never see the inside of a classroom?)
Prestige hire at a business or law school maybe?
posted by Dip Flash at 5:46 PM on November 22, 2023
The what now? Is this a thing on a technicality, where upper administration are often hired/appointed as professors technically on top of their administrative position, to maintain the illusion of academic governance, even though they never see the inside of a classroom?)
Prestige hire at a business or law school maybe?
posted by Dip Flash at 5:46 PM on November 22, 2023
It's Elon Musk telling minimum wage victims to hate the university professor who happens to make $300k CAD a year.
Look, I am very sorry, but if you are near or above this cutoff, you need to suck it up and accept that some opprobrium is justly coming your way instead of stammering about how you're not like Elon Musk.
posted by praemunire at 5:48 PM on November 22, 2023 [1 favorite]
Look, I am very sorry, but if you are near or above this cutoff, you need to suck it up and accept that some opprobrium is justly coming your way instead of stammering about how you're not like Elon Musk.
posted by praemunire at 5:48 PM on November 22, 2023 [1 favorite]
Look, I am very sorry, but if you are near or above this cutoff, you need to suck it up and accept that some opprobrium is justly coming your way instead of stammering about how you're not like Elon Musk.
Yeah I get it, 300k is alot, but its not like these people have significant power (beyond voting or other civic activites). They have to work like the rest of us. The people with power are the ones without income, who use their money to make money, who can actually afford to lobby/bribe/start a think tank to write new laws.
You'd think it would be a good thing, that the 1% is so low. In an ideal world, wages would be on a shorter spectrum, so that the 1% is actually more attainable and not so far away from the bottom. But no, its actually the case that even that low of an amount is mostly unnattainable.
So yeah, I feel way more class solidarity with the people making 300k than the people so wealthy as to not have to work. 300k is not world power creating money.
posted by LizBoBiz at 8:37 PM on November 22, 2023 [6 favorites]
Yeah I get it, 300k is alot, but its not like these people have significant power (beyond voting or other civic activites). They have to work like the rest of us. The people with power are the ones without income, who use their money to make money, who can actually afford to lobby/bribe/start a think tank to write new laws.
You'd think it would be a good thing, that the 1% is so low. In an ideal world, wages would be on a shorter spectrum, so that the 1% is actually more attainable and not so far away from the bottom. But no, its actually the case that even that low of an amount is mostly unnattainable.
So yeah, I feel way more class solidarity with the people making 300k than the people so wealthy as to not have to work. 300k is not world power creating money.
posted by LizBoBiz at 8:37 PM on November 22, 2023 [6 favorites]
And also, the math on this is interesting to think about. Just speaking about the 1% actually means very little unless you know the shape of the distribution. There will always be a 1%, but the bigger question is what is the distribution of incomes?
Like if there's a town of 100 people and 99 of them make $10 a year and one makes $11 per year, that one person is in the 1%. Same as if 99 make $0.01 and one makes $11 per year. However one of these scenarios is fair and the other is not.
If the town is 200 people and 198 make $10 and one makes $11 and one makes $1000, the person making $11 is in the 1% but is it fair to lump them in with the person making $1000? If the town is 198 people making $0.01 and one making $11 and one making $1,000, is it more fair to put the $11 person with the $1000 person?
Remember that it only takes $60k (USD i think) to be in the global 1% of income earners. How much power do you have in the US at $60k? Is it fair to lump someone who makes $60k together with the Waltons or Hiltons?
posted by LizBoBiz at 8:51 PM on November 22, 2023 [7 favorites]
Like if there's a town of 100 people and 99 of them make $10 a year and one makes $11 per year, that one person is in the 1%. Same as if 99 make $0.01 and one makes $11 per year. However one of these scenarios is fair and the other is not.
If the town is 200 people and 198 make $10 and one makes $11 and one makes $1000, the person making $11 is in the 1% but is it fair to lump them in with the person making $1000? If the town is 198 people making $0.01 and one making $11 and one making $1,000, is it more fair to put the $11 person with the $1000 person?
Remember that it only takes $60k (USD i think) to be in the global 1% of income earners. How much power do you have in the US at $60k? Is it fair to lump someone who makes $60k together with the Waltons or Hiltons?
posted by LizBoBiz at 8:51 PM on November 22, 2023 [7 favorites]
Prestige hire at a business or law school maybe?
Prestige hires aren’t historically or typically as much of a thing at Canadian universities. They exist, but are very rare. Faculty at all but a couple Canadian universities are unionized and salaries tend to follow standard pay grids, with starting salaries tending to be higher than at comparable US institutions but the upper end being lower (so, a more equitable salary profile and more balanced across lifetime earnings per individual than is often the case for comparable US institutions). Exceptions tend to be positions like the Canada Research Chairs (which have a set salary award from the federal government, though I believe that individual universities can add on to that) or named chairs. But it looks like some places, such as the University of Toronto (which has pretty much the highest faculty salaries in Canada), perhaps have competitive bonuses for faculty in areas where non-academic salaries are much higher (eg. business, law, engineering) - judging by their Ontario Sunshine List results, which do show some professors making over CA$300,00(*) in 2022 along with different average salaries by discipline(**).
CAUT (Canadian Association of University Teachers - the umbrella union for faculty unions across Canada) and StatsCan have more comprehensive data that give a clearer picture of the Canadian faculty salary landscape. On the upper end, from StatsCan:
posted by eviemath at 9:00 PM on November 22, 2023 [6 favorites]
Prestige hires aren’t historically or typically as much of a thing at Canadian universities. They exist, but are very rare. Faculty at all but a couple Canadian universities are unionized and salaries tend to follow standard pay grids, with starting salaries tending to be higher than at comparable US institutions but the upper end being lower (so, a more equitable salary profile and more balanced across lifetime earnings per individual than is often the case for comparable US institutions). Exceptions tend to be positions like the Canada Research Chairs (which have a set salary award from the federal government, though I believe that individual universities can add on to that) or named chairs. But it looks like some places, such as the University of Toronto (which has pretty much the highest faculty salaries in Canada), perhaps have competitive bonuses for faculty in areas where non-academic salaries are much higher (eg. business, law, engineering) - judging by their Ontario Sunshine List results, which do show some professors making over CA$300,00(*) in 2022 along with different average salaries by discipline(**).
- (* This almost certainly includes academic administrators, who technically get appointed as faculty in addition to their administrative position, but don’t ever actually teach any classes, however.)
- (** Though the relative proportion of early versus late career faculty in a discipline will also impact the average salary. Background: there are three main levels (rank) of university professor. Assistant professor is the starting, non-tenured position in North American universities; with promotion to associate professor generally coming at the same time as receiving tenure (generally after seven years at the assistant level, not counting any non-continuing appointments before folks get a tenure-track position); then promotion to full professor later in one’s career. But there may be from five to ten (or more, at the upper end) annual grid steps within each level at typical Canadian universities, so that each individual will typically go up a grid step (get a promotion) every year, until they max out on the upper end of the full professor grid; but that maxing out takes at least 15 years, sometimes up to 25 years. And due to professional training requirements, that career progression will start when someone is in their late 20s to early 30s typically. So reaching a top salary by, say, age 50, or spending a major chunk of one’s career at a top salary, is relatively rare.)
CAUT (Canadian Association of University Teachers - the umbrella union for faculty unions across Canada) and StatsCan have more comprehensive data that give a clearer picture of the Canadian faculty salary landscape. On the upper end, from StatsCan:
- 90th percentile of salaries (not sure if these are mean or median?), by university, for the past two academic years - note that this includes “annual rate of salary plus administrative stipends”, and the data includes deans (the first level of administration above individual departments, deans are typically full-time administrators who don’t teach (though might supervise graduate students, unlike higher levels of administrators )
- About a third of Canadian professors are full professors, with 21.7% above 65 (so, at the upper end of salary ranges). Additionally: Full professors who are men ($179,175) had a higher median salary in 2022/2023 than their women counterparts ($172,525). Salaries for full professors ranged from $143,400 (10th percentile) to $230,925 (90th percentile). These salary ranges were slightly larger for men than for women, with men earning $145,200 to $235,550 and women earning $141,175 to $221,400.
posted by eviemath at 9:00 PM on November 22, 2023 [6 favorites]
(Clarification: that was 21.7% of the about a third of faculty who are full professors - which makes them somewhere around 8% of all faculty. That will largely overlap with the 90th percentile of salaries for each university.)
posted by eviemath at 9:05 PM on November 22, 2023
posted by eviemath at 9:05 PM on November 22, 2023
For fans of stats and graphs, here is the World Bank's comparison of the Gini coefficients* of Canada vs the US over the past half century or so.
* Gini coefficient explained (Wikipedia)
posted by senor biggles at 9:24 PM on November 22, 2023 [2 favorites]
* Gini coefficient explained (Wikipedia)
posted by senor biggles at 9:24 PM on November 22, 2023 [2 favorites]
The truly wealthy don't have income from jobs; they collect rent on assets (literal rent, or stock dividends and sales, etc.). Musk (*spit*) for example, has no income. He takes out loans using Tesla shares as collateral and spends that money. Debt isn't classified as income, so he also pays no income tax.
Lots of people not in the 1% collect income (which it is) from stock dividends and sales. It's an income tax, not a 'job-having' tax. Musk does have an income, he does pay tax. He doesn't pay enough tax. Also 'work' is an abstract word. Elon Musk has 3 jobs - the guy may suck but he works.
Also people who earn $200-300k for a while get things like stock income, even if they don't get it in year number 1. And it doesn't take all that long at $200k before your stock income dwarfs your actual income. Unlike say $50k - it takes like 40 years to make enough money from stock type investments to surpass your income, due to the majority of your income being spent on things to keep you alive. That doesn't scale to $200k linearly.
posted by The_Vegetables at 9:31 PM on November 22, 2023
Lots of people not in the 1% collect income (which it is) from stock dividends and sales. It's an income tax, not a 'job-having' tax. Musk does have an income, he does pay tax. He doesn't pay enough tax. Also 'work' is an abstract word. Elon Musk has 3 jobs - the guy may suck but he works.
Also people who earn $200-300k for a while get things like stock income, even if they don't get it in year number 1. And it doesn't take all that long at $200k before your stock income dwarfs your actual income. Unlike say $50k - it takes like 40 years to make enough money from stock type investments to surpass your income, due to the majority of your income being spent on things to keep you alive. That doesn't scale to $200k linearly.
posted by The_Vegetables at 9:31 PM on November 22, 2023
"Also [some] people who earn $200-300k for a while get things like stock income"
FTFY
I work in an industry where it isn't unbelievable to make that much toward the end of your career, but my bonuses are paid in cash not stock. Its only the C-suite that gets paid in stock. Doctors, lawyers, engineers generally get paid in cash and not stock. Actually, who gets paid in stock options? Isn't that more of a thing with start-ups that actually can't afford to pay salaries?
Or do you mean that with that amount of money you can invest in the stock market? Sure, I guess, but they're not professional stock brokers, I would expect that most of them do not end up making enough to live off of stock income only.
posted by LizBoBiz at 9:41 PM on November 22, 2023 [3 favorites]
FTFY
I work in an industry where it isn't unbelievable to make that much toward the end of your career, but my bonuses are paid in cash not stock. Its only the C-suite that gets paid in stock. Doctors, lawyers, engineers generally get paid in cash and not stock. Actually, who gets paid in stock options? Isn't that more of a thing with start-ups that actually can't afford to pay salaries?
Or do you mean that with that amount of money you can invest in the stock market? Sure, I guess, but they're not professional stock brokers, I would expect that most of them do not end up making enough to live off of stock income only.
posted by LizBoBiz at 9:41 PM on November 22, 2023 [3 favorites]
engineers generally get paid in cash and not stock. Actually, who gets paid in stock options? Isn't that more of a thing with start-ups that actually can't afford to pay salaries?
IDK if we're keeping this Canada specific, but in the US, big tech has moved to Restricted Stock Units as equity comp. RSUs vest into actual stocks over time. Half my income these days is those shares vesting, and I am not only not in the C-suite, I have zero employees reporting to me. Startups still use options, with all the tax rules and chaos that can engender.
2021 was a weird year, even in Canada -- remember the whole lumber shortage? -- and I wouldn't be surprised if "pandemic fueled tech boom" was part of the explanation. You had a ton of service and hospitality firms in trouble, the price of oil actually went negative in 2020, and tech firms went on hiring sprees. A few cities in Canada have a reputation as a 'staging area' for tech firms who run into trouble getting visa approvals for headcount in the US. And even without the US brain drain dynamic, remote work vs not was presumably a strong factor in 2021.
posted by pwnguin at 10:10 PM on November 22, 2023 [1 favorite]
IDK if we're keeping this Canada specific, but in the US, big tech has moved to Restricted Stock Units as equity comp. RSUs vest into actual stocks over time. Half my income these days is those shares vesting, and I am not only not in the C-suite, I have zero employees reporting to me. Startups still use options, with all the tax rules and chaos that can engender.
2021 was a weird year, even in Canada -- remember the whole lumber shortage? -- and I wouldn't be surprised if "pandemic fueled tech boom" was part of the explanation. You had a ton of service and hospitality firms in trouble, the price of oil actually went negative in 2020, and tech firms went on hiring sprees. A few cities in Canada have a reputation as a 'staging area' for tech firms who run into trouble getting visa approvals for headcount in the US. And even without the US brain drain dynamic, remote work vs not was presumably a strong factor in 2021.
posted by pwnguin at 10:10 PM on November 22, 2023 [1 favorite]
Like if there's a town of 100 people and 99 of them make $10 a year and one makes $11 per year, that one person is in the 1%. Same as if 99 make $0.01 and one makes $11 per year. However one of these scenarios is fair and the other is not.
They both sound unfair to me, just to varying degrees.
posted by Dysk at 12:50 AM on November 23, 2023
They both sound unfair to me, just to varying degrees.
posted by Dysk at 12:50 AM on November 23, 2023
Remember that it only takes $60k (USD i think) to be in the global 1% of income earners. How much power do you have in the US at $60k? Is it fair to lump someone who makes $60k together with the Waltons or Hiltons?
A grown person making CAD$300K who cannot deal with the facts of their relative economic position in society is actually still a child. Please, people, just deal with it. If it makes you uncomfortable to think about the facts, work on changing the facts, not the having to think about them honestly. It's embarrassing as hell to watch people tapdance like this, and it happens every time this topic comes up.
posted by praemunire at 1:09 AM on November 23, 2023 [2 favorites]
A grown person making CAD$300K who cannot deal with the facts of their relative economic position in society is actually still a child. Please, people, just deal with it. If it makes you uncomfortable to think about the facts, work on changing the facts, not the having to think about them honestly. It's embarrassing as hell to watch people tapdance like this, and it happens every time this topic comes up.
posted by praemunire at 1:09 AM on November 23, 2023 [2 favorites]
I pulled together more granular data a few years ago for Australian Tax Office actual tax return data that might answer a few curious questions.
Imgur link
If you had $50,000 of taxable income you're the median taxpayer, and you paid 14.0% of it as tax
If you had $180,000 of taxable income you're the 96.4th percentile, and you paid 31.1% of it as tax
If you had $500,000 of taxable income you're the 99.6th percentile and you paid 41.9% of it as tax
If you had $1,000,000 of taxable income you're the 99.9th percentile and you paid 45% of it as tax
I've included a breakdown of the main components of taxable income, there's many more of them hence they don't sum to 100%.
Some trends are expected - higher income taxpayers generally show rental losses due to recently purchasing an investment property and claiming negative gearing. People with positively geared houses are generally pensioners with lower incomes.
Some were interesting as I wasn't sure what to expect. The super rich (top 0.1%) declared in roughly equal proportion salary, dividends, capital gains and partnership and trust income.
The top 0.4% pay roughly 12% of income taxes.
The bottom 50% pay roughly 7% of income taxes.
You might ask about taxable income versus total income before deductions - I think it would unnecessarily complicate the chart. The whole point is to smooth out the recognition of expenses to match against revenues, eg a sole proprietor which bought a $100k machine that gets used for 5 years should recognize a deduction of $20,000 per year for each of the 5 years rather than an upfront $100k tax loss on year one and then nothing for the 5 years they're actually using the machine.
posted by xdvesper at 3:45 AM on November 23, 2023
Imgur link
If you had $50,000 of taxable income you're the median taxpayer, and you paid 14.0% of it as tax
If you had $180,000 of taxable income you're the 96.4th percentile, and you paid 31.1% of it as tax
If you had $500,000 of taxable income you're the 99.6th percentile and you paid 41.9% of it as tax
If you had $1,000,000 of taxable income you're the 99.9th percentile and you paid 45% of it as tax
I've included a breakdown of the main components of taxable income, there's many more of them hence they don't sum to 100%.
Some trends are expected - higher income taxpayers generally show rental losses due to recently purchasing an investment property and claiming negative gearing. People with positively geared houses are generally pensioners with lower incomes.
Some were interesting as I wasn't sure what to expect. The super rich (top 0.1%) declared in roughly equal proportion salary, dividends, capital gains and partnership and trust income.
The top 0.4% pay roughly 12% of income taxes.
The bottom 50% pay roughly 7% of income taxes.
You might ask about taxable income versus total income before deductions - I think it would unnecessarily complicate the chart. The whole point is to smooth out the recognition of expenses to match against revenues, eg a sole proprietor which bought a $100k machine that gets used for 5 years should recognize a deduction of $20,000 per year for each of the 5 years rather than an upfront $100k tax loss on year one and then nothing for the 5 years they're actually using the machine.
posted by xdvesper at 3:45 AM on November 23, 2023
The truly wealthy don't have income from jobs; they collect rent on assets (literal rent, or stock dividends and sales, etc.)
Quite so. And since collecting rent on an asset has zero social utility to anybody but the actual rent collector, it's assets we should be levying taxes against on a progressive basis, not incomes.
Assets are fewer in number than incomes, their ownership is harder to hide, and the fact of ownership is enforced by the State in the first place which makes hiding the owners of any given asset a risky proposition; any asset whose owner refused to identify themself could simply be reverted to public ownership. Administratively, it should be quite a lot easier to total up and tax an entity's assets than its income.
But, but, but, I hear you say, what about my house? I live in that thing, and it's the most expensive asset I own, and I absolutely could not afford to pay taxes on it year on year on year, that would bleed me dry and ruin me!
So apart from the simple fact that landowners already pay some form of land tax in most places (where I live, for example, local government is funded by these) the key thing to consider here is the tax rate. The value of an asset that returns any given rent over a year is in general going to be a large multiple of that rent. So a tax on assets can be levied at a vastly lower percentage than a tax on incomes and still yield the same net revenue for the State.
Consider an entity whose sole source of income is a portfolio of assets that yields 3% of its value yearly as a return on investment. Charging that entity a 1% yearly asset tax, then, would leave both it and the State in the same position as charging a 33% income tax instead.
Income tax rates are progressive in most places, so people on very high salaries will generally be paying quite a lot more than 33% of those as income taxes. But what if we phased out income taxes and phased in progressive rates of asset taxes to replace them?
What if we had a progressive asset-value tax rate that started at zero for asset portfolios worth less than a million, gradually rising above that level and topping out at say 5% for entities whose asset portfolios add up to billions?
What this would do is counteract the positive feedback inherent in an untaxed-assets economy, where money buys assets that make money to buy assets that make money to buy assets to make money. There would exist some level of asset ownership, depending on prevailing business conditions, at which buying more assets reduced not only the owning entity's rate of return on investment but the absolute amount of such returns, because the State would be charging more in taxes than the assets returned in rents. This would create a direct financial incentive to sell off some assets to entities that owned less of them in total. Financial gigantism would become expensive rather than advantageous, economies of scale would no longer be anywhere near as dominant a factor in business planning as they are right now, and the creation of monopolies would become much, much harder.
The standard way to get around any progressive tax rate regime is for the taxable entity to restructure into multiple parts, because smaller entities own less assets and earn less income and therefore attract lower tax rates. But if a monster corporation tried to split itself into multiple subsidiaries in order to avoid an asset tax, this wouldn't work - subsidiaries themselves would be assessed as assets of the entity that owned them, and the entity at the top of the heap could well find itself charged a higher rate of assets tax than if it had just paid what it owed and avoided the restructuring shenanigans. The only way for a monster to pay less tax overall would be to genuinely break itself apart into independent businesses, none of them owned by any other entity.
There should be no disincentive to charging extreme amounts of money for the exercise of extreme amounts of skill. Income taxes are a direct disincentive to that, which is why so many people think of them as unfair and unreasonable.
An assets tax, on the other hand, is probably best thought of as a relatively small fee that the State charges for the service of operating the enforcement mechanisms that enable private ownership. It's a bit like an insurance premium in that regard.
Private ownership is generally a good thing, but it's not the absolute good that the libertarians would have you believe and nor is it in any way God-given or as-of-right; it's merely a part - a fairly major part, for sure - of a generally accepted social contract. Excessive concentration of private ownership is unqualifiedly a bad thing, and re-jigging taxation law to discourage it can only improve matters.
posted by flabdablet at 4:26 AM on November 23, 2023 [3 favorites]
Quite so. And since collecting rent on an asset has zero social utility to anybody but the actual rent collector, it's assets we should be levying taxes against on a progressive basis, not incomes.
Assets are fewer in number than incomes, their ownership is harder to hide, and the fact of ownership is enforced by the State in the first place which makes hiding the owners of any given asset a risky proposition; any asset whose owner refused to identify themself could simply be reverted to public ownership. Administratively, it should be quite a lot easier to total up and tax an entity's assets than its income.
But, but, but, I hear you say, what about my house? I live in that thing, and it's the most expensive asset I own, and I absolutely could not afford to pay taxes on it year on year on year, that would bleed me dry and ruin me!
So apart from the simple fact that landowners already pay some form of land tax in most places (where I live, for example, local government is funded by these) the key thing to consider here is the tax rate. The value of an asset that returns any given rent over a year is in general going to be a large multiple of that rent. So a tax on assets can be levied at a vastly lower percentage than a tax on incomes and still yield the same net revenue for the State.
Consider an entity whose sole source of income is a portfolio of assets that yields 3% of its value yearly as a return on investment. Charging that entity a 1% yearly asset tax, then, would leave both it and the State in the same position as charging a 33% income tax instead.
Income tax rates are progressive in most places, so people on very high salaries will generally be paying quite a lot more than 33% of those as income taxes. But what if we phased out income taxes and phased in progressive rates of asset taxes to replace them?
What if we had a progressive asset-value tax rate that started at zero for asset portfolios worth less than a million, gradually rising above that level and topping out at say 5% for entities whose asset portfolios add up to billions?
What this would do is counteract the positive feedback inherent in an untaxed-assets economy, where money buys assets that make money to buy assets that make money to buy assets to make money. There would exist some level of asset ownership, depending on prevailing business conditions, at which buying more assets reduced not only the owning entity's rate of return on investment but the absolute amount of such returns, because the State would be charging more in taxes than the assets returned in rents. This would create a direct financial incentive to sell off some assets to entities that owned less of them in total. Financial gigantism would become expensive rather than advantageous, economies of scale would no longer be anywhere near as dominant a factor in business planning as they are right now, and the creation of monopolies would become much, much harder.
The standard way to get around any progressive tax rate regime is for the taxable entity to restructure into multiple parts, because smaller entities own less assets and earn less income and therefore attract lower tax rates. But if a monster corporation tried to split itself into multiple subsidiaries in order to avoid an asset tax, this wouldn't work - subsidiaries themselves would be assessed as assets of the entity that owned them, and the entity at the top of the heap could well find itself charged a higher rate of assets tax than if it had just paid what it owed and avoided the restructuring shenanigans. The only way for a monster to pay less tax overall would be to genuinely break itself apart into independent businesses, none of them owned by any other entity.
There should be no disincentive to charging extreme amounts of money for the exercise of extreme amounts of skill. Income taxes are a direct disincentive to that, which is why so many people think of them as unfair and unreasonable.
An assets tax, on the other hand, is probably best thought of as a relatively small fee that the State charges for the service of operating the enforcement mechanisms that enable private ownership. It's a bit like an insurance premium in that regard.
Private ownership is generally a good thing, but it's not the absolute good that the libertarians would have you believe and nor is it in any way God-given or as-of-right; it's merely a part - a fairly major part, for sure - of a generally accepted social contract. Excessive concentration of private ownership is unqualifiedly a bad thing, and re-jigging taxation law to discourage it can only improve matters.
posted by flabdablet at 4:26 AM on November 23, 2023 [3 favorites]
For non-Canadians, the Sunshine List mentioned above was started by the 1996 Conversative Government of Ontario. (Alberta and Nova Scotia followed suit in 2014 and 2016, respectively.) It's an ideal way of gin up hatred for high-paid public service employees whilst ignoring the undoubtedly more enormous private sector salaries. Because it's much easier to froth at the mouth about a prof or health sciences preisdent rather than the people who make so much more money and do so much less. (Looking at you, Galen Weston, Jr.)
posted by Kitteh at 5:51 AM on November 23, 2023 [3 favorites]
posted by Kitteh at 5:51 AM on November 23, 2023 [3 favorites]
1 in 10 Torontonians now rely on food banks. Double the year before.
https://www.cbc.ca/news/canada/toronto/one-in-10-torontonians-now-rely-on-a-food-bank-1.7027318
I guess it's on brand that MeFites would be fighting over stocks and income tax facts, what constitutes the 1% or being "rich," and not discussing that more and more Canadians are going hungry and struggling to be housed. Working people with full time jobs are going to food banks because wages are the the same they were a decade ago. People relying on social assistance are still getting the same tiny amount of money they were years ago despite huge rises in costs of living. We are in a crisis.
posted by Stoof at 6:01 AM on November 23, 2023 [8 favorites]
https://www.cbc.ca/news/canada/toronto/one-in-10-torontonians-now-rely-on-a-food-bank-1.7027318
I guess it's on brand that MeFites would be fighting over stocks and income tax facts, what constitutes the 1% or being "rich," and not discussing that more and more Canadians are going hungry and struggling to be housed. Working people with full time jobs are going to food banks because wages are the the same they were a decade ago. People relying on social assistance are still getting the same tiny amount of money they were years ago despite huge rises in costs of living. We are in a crisis.
posted by Stoof at 6:01 AM on November 23, 2023 [8 favorites]
My local subreddit has a post right now about a Kingstonian who just lost her apartment in a fire, and is looking at being potientally homeless, despite working 40 hours at week at $19/hr. Apartments are outrageously priced for our area so it's not as easy as "hey, just get a new place."
posted by Kitteh at 7:12 AM on November 23, 2023 [3 favorites]
posted by Kitteh at 7:12 AM on November 23, 2023 [3 favorites]
What if we had a progressive asset-value tax rate that started at zero for asset portfolios worth less than a million, gradually rising above that level and topping out at say 5% for entities whose asset portfolios add up to billions?
Government policies generally recognize the need for economies of scale to ensure their nation retains its competitiveness against foreign nations, while ensuring fair consumer practices using relevant laws.
Eg if a America became fully dependent on China for critical technologies, then China can dictate whatever terms it likes to America.
It's just not possible for small firms to compete with larger firms. I've been working on a project with multiple billions of dollars of upfront R&D spending over 4 years before yielding a single cent in revenue, and we are barely keeping pace with competitors in China, Middle East, Korea, Japan, etc. A smaller firm wouldn't have 20 other multi billion dollar projects in various stages (pre-production, production, wind down) which allows the funding of early stage projects, never mind the 50+ years of accumulated technical knowledge and ability to harness a global scale engineering and supplier base.
Even if you say, break up a firm into 20 pieces then ask them to work together - trying to get multiple small firms to work together on a mega project is pretty much impossible, even a 2 company joint venture incurs massive amounts of pain. There's a whole lot of compliance involved in dancing around all the grey areas of what kind of information we're legally allowed to share with each other, and consulting with very highly paid lawyers in the meantime - anti-trust and competition laws are very strict about two competitors working together (now there's an oxymoron).
China makes 80% of the world's solar panels and 70% of the worlds EV batteries due to scale. That number is going to go higher if we tell our firms to break up and become less competitive, or get taxed more and be less competitive anyway.
Even if you heavily tax all imports into the country and become something like Argentina, you still need some kind of viable export industry to generate foreign currency.
posted by xdvesper at 7:13 AM on November 23, 2023 [2 favorites]
Government policies generally recognize the need for economies of scale to ensure their nation retains its competitiveness against foreign nations, while ensuring fair consumer practices using relevant laws.
Eg if a America became fully dependent on China for critical technologies, then China can dictate whatever terms it likes to America.
It's just not possible for small firms to compete with larger firms. I've been working on a project with multiple billions of dollars of upfront R&D spending over 4 years before yielding a single cent in revenue, and we are barely keeping pace with competitors in China, Middle East, Korea, Japan, etc. A smaller firm wouldn't have 20 other multi billion dollar projects in various stages (pre-production, production, wind down) which allows the funding of early stage projects, never mind the 50+ years of accumulated technical knowledge and ability to harness a global scale engineering and supplier base.
Even if you say, break up a firm into 20 pieces then ask them to work together - trying to get multiple small firms to work together on a mega project is pretty much impossible, even a 2 company joint venture incurs massive amounts of pain. There's a whole lot of compliance involved in dancing around all the grey areas of what kind of information we're legally allowed to share with each other, and consulting with very highly paid lawyers in the meantime - anti-trust and competition laws are very strict about two competitors working together (now there's an oxymoron).
China makes 80% of the world's solar panels and 70% of the worlds EV batteries due to scale. That number is going to go higher if we tell our firms to break up and become less competitive, or get taxed more and be less competitive anyway.
Even if you heavily tax all imports into the country and become something like Argentina, you still need some kind of viable export industry to generate foreign currency.
posted by xdvesper at 7:13 AM on November 23, 2023 [2 favorites]
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posted by rodlymight at 1:09 PM on November 22, 2023 [2 favorites]