this post was submitted on 15 Jan 2024
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[–] dangblingus@lemmy.dbzer0.com 3 points 10 months ago* (last edited 10 months ago) (1 children)

I don't know any doctor or high earning professional that makes millions of dollars per year. You're still thinking about the wrong bracket. We're talking about the mega wealthy, hundreds of millions to billions in net worth. Also, no, the effective tax rate never actually decreases in Canada. You get taxed at higher percentages the more money you make. Someone making $750k a year gets taxed at a higher rate, both marginally and effectively, than someone making $50k. You're assuming that all of this extra money is just coming from capital gains. It's not.

[–] EmergMemeHologram@startrek.website 1 points 10 months ago

Fair point about marginal vs effective rates. My criticism is two points:

  1. The top tax bracket is still in the employed professional income range, like a doctor or lawyer type job. Those people are wealthy but not problematically so.
  2. The capital gains exemption and incorporation loopholes allow wealthy people to lower their effective taxes by a lot. For example a CEO with a $1 salary -- their income is grants of shares and the capital gains on those shares, resulting in a lower effective tax rate than their real earnings should. It gets more nebulous when you incorporate your finances and "reinvest" gains or use other tax loop holes like lending against stock.

Those are the things where I think just increasing income tax ends up burdening the middle class the most. Adding new brackets would help, updating capital gains based on income like the US does would too, so would closing loop holes and exploring new taxation strategies.