Rich Taxed Less

Those very rich Canadians paid 30.5 per cent of their income in federal, provincial and municipal taxes in 2005, as opposed to the 30.7 per cent for those with incomes under $13,523, the lowest 10 per cent of family earnings. That's a big difference from 1990, when the top one per cent of earners paid 34.2 per cent of their incomes in taxes, as opposed to 25.5 per cent for families in the bottom 10 per cent. "The tax system as gotten less progressive," said the group's senior economist Marc Lee. ... Lee said although the lowest income earners generally pay no or very little income tax, they do pay a disproportionately high amount in relation to their income in sales taxes, property taxes and other government revenue generators, such as gaming and liquor sales. Tax cuts by provinces was the main impetus behind the flattening of the system, says Lee, although federal cuts, such as the elimination of the five per cent high income surcharge after 2001 also reduced progressivity. Provincial taxes are less progressive than federal levies because of their greater reliance on sales tax and fees for such things as driver's licences. As well, provinces generally have flatter provincial income tax rates. "Provincial income tax cuts are the major culprit behind Canada's eroding tax fairness, an important consideration given allegations by the provinces of a fiscal imbalance in Canadian federalism," the report finds. Lee said the study shows there is much more room for governments, particularly provinces, to levy higher taxes on upper income families. http://www.thestar.com/article/274517

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