Xref: utzoo can.general:1280 ont.general:938
Path: utzoo!attcan!utgpu!watmath!julian!uwovax!gerard
From: gerard@uwovax.uwo.ca (Gerard Stafleu)
Newsgroups: can.general,ont.general
Subject: Re: income tax tips #23: new personal income tax rates
Message-ID: <2311@uwovax.uwo.ca>
Date: 14 Jun 89 09:02:31 GMT
References: <1989Jun12.133058.28912@lsuc.on.ca>
Lines: 49
Organisation: University of Western Ontario, Canada

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?