# Ontario Effective Income Tax Rates



## kcowan (Jul 1, 2010)

Tax rate discussion

While helpful for all Canadian taxpayers, this discussion will be very helpful to Ontario residents. It really illustrates how complex our tax system has become!


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## warp (Sep 4, 2010)

You dont have to convince me.

Ive posted many times on here about how ludicrously complex ourTax System has become.

And it just gets worse every year when govts keep addding new programs, new credits, etc, to try and hide hoe the average taxpayer is getting ruined by govt waste and spending.

Add in the "phantom income" thats produced when you have to gross up your dividends. This is income you NEVER actually received, yet it is used as your "taxable income" for all kinds of govt benefits and clawbacks.

Its a DISGRACE !!

We need a FLAT RATE tax system that the average taxpayer can easily understand and comply with....and that doesn't punish someone for working hard and getting ahead.

As for taxing the rich...thast such a joke.....Ive never seen a "poor" person create a job or create any value or prosperity for any society ever.

As you can tell, this stuff really gets my blood boiling, and it bothers me that NO politician has the balls to call it what it is, and fix the system.


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## andrewf (Mar 1, 2010)

"Ive never seen a "poor" person create a job or create any value or prosperity for any society ever."

Yikes.


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## OhGreatGuru (May 24, 2009)

The discussion makes some interesting points about how clawback of various credits and benefits affects a "true" marginal rate. But another way of interpreting it is that the marginal rate for the upper bracket is still under 50%, but lower-income people actually have lower marginal rates than commonly thought due to the various credits & benefits.

(Using the OP's methodology, once your income reaches a level where all the benefits have been clawed back, and the income-dependent credits have been reduced to zero, the "effective marginal rate" then drops down again. Ergo there is something wrong with the methodology.)

I think including CPP and EI is overstating the case, and spoils an otherwise interesting argument. You may as well throw in HST as well; and what about gas & liquor taxes?

PS: It also seeemed to me unusual that the "typical" tax payer is +65 years of age (collecting OAS and eligible for the age amount) but also has multiple minor children.

PPS: The "Step Function" of the Ontario Health Premium does induce a high marginal rate every time you cross a threshold, and that is one of the reasons why I dislike it too But is that really statistically meaningful? 

PPPS: By selecting your data you could probably prove that the death of a minor child or spouse suddenly propels you into a higher marginal tax bracket.

All that being said, I agree the analysis points up some inequities, not to mention ridiculous complexities, in all our income-tested credits and benfits.


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## slacker (Mar 8, 2010)

warp said:


> Ive never seen a "poor" person create a job or create any value or prosperity for any society ever.


@warp: I would give you the benefit of the doubt that you were not thinking straight when you typed this. I encourage you to apologize and retract your statement.


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## kcowan (Jul 1, 2010)

OhGreatGuru said:


> I think including CPP and EI is overstating the case, and spoils an otherwise interesting argument. You may as well throw in HST as well; and what about gas & liquor taxes?


I agree on CPP but EI is an income-oriented tax that provides most of the payors with zero benefit.

The last two are consumption taxes and cost nothing if you stop spending.


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## Square Root (Jan 30, 2010)

Yes it is pretty complicated. i am a resident of Alberta and it is a little better there. But in reality in my case with a very high income things are pretty simple. I can ignore all the minor stuff and just look at the max marg rates (reg income-39%, divs about 16%)


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## steve41 (Apr 18, 2009)

Here is the Ontario tax displayed graphically as an effective tax rate starting at $37000 and increasing by .002 The anomaly is not anywhere as graphic when looked at in terms of actual tax paid. This includes most of the ONT surtaxes, health care levies, etc. It is for a single/no dependants taxpayer.

 Ontario tax anomaly


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## warp (Sep 4, 2010)

slacker said:


> @warp: I would give you the benefit of the doubt that you were not thinking straight when you typed this. I encourage you to apologize and retract your statement.


Apologize?? and Retract?? Who are you, my Father?

Give me a break! I would encourage you to open your eyes, and get your head on staright.

I was thinking TOTALLY clearly when I wrote this.

What is it about this "statement", that offends you, or that is incorrect.
I assume you are saying it is "politically incorrect"...which I am sick of hearing about, to say the least.

Theres a lyric in an old rock song.....when I was younger.

" tax the rich.
feed the poor,
till there are,
no rich no more"

I think it was by AREOSMITH

It is when you DO NOT punish hard work and innovation through high taxes , that a society enriches itself.
How can it EVER be fair when the govt gets more of what you earn than you do? Where is the incentive to work,,,the incentive to acheive?

Before you think Im an ogre, I agree with the premise that the govt, thru taxes, should give a helping hand to the poor, seniors, disabled, or dissadvantaged, or anyone going through a rough patch.

However , what we have created is a society where everyone thinks they are ENTITILED to everything...and constantly with their hands out looking for just that....a handout.
As in, "we" are all entitiled to housing......NO YOU ARE NOT....you are entitiled to work, not be taxed to death, and house yourself.
The amount of sheer waste at all govt levels makes me SICK, because it is MY money they are wasting.

I have alwasys felt this way,,even when I was young and broke....and had many problems through University when I made these points in class, and was laughed at by my "professors", including my economics professors, who I now realize were in dream land, and couldnt punch their way out of a paper bag in the real world....and dont even get me started about "TENURE", or the public service unions....parasites on the public dime.

Remember this...NO society in the HISTORY of the world has ever taxed itself into prosperity.

In fact I would argue that the opposite is true.

good luck


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## Square Root (Jan 30, 2010)

Feel pretty strongly about this Warp? Relax there fella, things ain't that bad.


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## peterk (May 16, 2010)

Square Root said:


> Feel pretty strongly about this Warp? Relax there fella, things ain't that bad.


Perhaps not, but without loud persistent voices like Warp's things certainly will become that bad or worse! There's far too much apathy in this country regarding government spending and efficiency.


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## financialnoob (Feb 26, 2011)

peterk said:


> Perhaps not, but without loud persistent voices like Warp's things certainly will become that bad or worse! There's far too much apathy in this country regarding government spending and efficiency.


I certainly don't disagree with a lot of what Warp wrote. But I think the line that stood out, and is off-base, is the following:



> Ive never seen a "poor" person create a job or create any value or prosperity for any society ever.


One could argue the poor get an unfair amount of assistance. I would understand that. To claim that no poor person has ever created any value or prosperity for any society ever though is false.


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## andrewf (Mar 1, 2010)

It also ridiculous, and detracts from the rest of his argument. It makes it pretty easy to dismiss him as right-wing nutter with a poor grasp of grammar.


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## financeguru (Jan 18, 2010)

andrewf said:


> It also ridiculous, and detracts from the rest of his argument. It makes it pretty easy to dismiss him as right-wing nutter with a poor grasp of grammar.


It *is* also ridiculous....

Just saying.


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## andrewf (Mar 1, 2010)

financeguru said:


> It *is* also ridiculous....
> 
> Just saying.


Thanks for the nitpick. 

Forgot the 's. It's what I get for calling someone else on poor writing.


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## the-royal-mail (Dec 11, 2009)

Funny how those who disagree with warp can only come up with single-line brief snipe comments rather than to actually put in any amount of effort to their posts. Anyone can write one line comments. If you guys want to seriously discuss the issues as warp has done, then please put in the same amount of effort to your posts. Your one liners make you look lazy and I never take these comments with much more than a grain of salt.

I for one agree with warp and peterk. Those who disagree are basically those who are at the trough, depending on our tax dollars to fund their lobby efforts. Tax and spend, that's the Canadian left-wing way.


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## andrewf (Mar 1, 2010)

the-royal-mail said:


> Those who disagree are basically those who are at the trough, depending on our tax dollars to fund their lobby efforts. Tax and spend, that's the Canadian left-wing way.


I disagreed with the statement I quoted. The rest was just hyperventilating. I can also assure you that I'm on the end shoveling slop into the trough.

What bugs me is that angry rants about poor people don't do anything to advance our political debate. What do you want to do about it? Work camps for those on welfare? No welfare at all/leave people to starve on the streets? It's easy to moan and complain. Solutions are hard.

A flat tax isn't much of a solution. Unless you slash the size of government substantially (and how do we do that? It's easy to talk about cuts in general when you never name the programs to be cut), a flat tax means substantial increases in tax rates of low and middle-income payers.


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## Square Root (Jan 30, 2010)

andrewf said:


> I disagreed with the statement I quoted. The rest was just hyperventilating. I can also assure you that I'm on the end shoveling slop into the trough.
> 
> What bugs me is that angry rants about poor people don't do anything to advance our political debate. What do you want to do about it? Work camps for those on welfare? No welfare at all/leave people to starve on the streets? It's easy to moan and complain. Solutions are hard.
> 
> A flat tax isn't much of a solution. Unless you slash the size of government substantially (and how do we do that? It's easy to talk about cuts in general when you never name the programs to be cut), a flat tax means substantial increases in tax rates of low and middle-income payers.


Agree. The reason why the responses are dismissive is because the original post is just a "rant". Rants usually consist of sweeping generalizations that are sometimes difficult to refute. 
By the way, I'm pretty sure I pay more tax than most on this board. Since retirement my income have averaged about $3million per year. I don't mind paying taxes as I feel this is a great place to live.


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## LondonHomes (Dec 29, 2010)

warp said:


> You dont have to convince me.
> 
> Ive posted many times on here about how ludicrously complex ourTax System has become.
> 
> ...


Interesting.

The HST in BC & Ontario is an example of some politicians with some balls attempting to fix the system. Yet look what happened to Gordo and is probably going to happen to McGuinty.


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## Four Pillars (Apr 5, 2009)

Square Root said:


> Agree. The reason why the responses are dismissive is because the original post is just a "rant". Rants usually consist of sweeping generalizations that are sometimes difficult to refute.
> By the way, I'm pretty sure I pay more tax than most on this board. Since retirement my income have averaged about $3million per year. I don't mind paying taxes as I feel this is a great place to live.


Wow - you probably pay more taxes in one year than I will in my lifetime.


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## steve41 (Apr 18, 2009)

warp said:


> You dont have to convince me.
> 
> Ive posted many times on here about how ludicrously complex ourTax System has become.
> 
> ...


The disgrace is the fact that, because you are communicating on this forum using a single computer which has more computer power than all the computers which NASA used to put a man on the moon, you are complaining about _complexity_. Complexity has nothing to do with it.... all you want is a regressive tax system which will lower your taxes and raise the taxes of those below you on the income scale.


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## andrewf (Mar 1, 2010)

Square Root said:


> Agree. The reason why the responses are dismissive is because the original post is just a "rant". Rants usually consist of sweeping generalizations that are sometimes difficult to refute.
> By the way, I'm pretty sure I pay more tax than most on this board. Since retirement my income have averaged about $3million per year. I don't mind paying taxes as I feel this is a great place to live.


And I bet your tax bill averages about a million or even less. It's funny how people look at marginal rates and then scream loudly about how the government takes 50%! They have no concept or marginal vs. average tax rate. If the government took half of every dollar of income, then the government would necessarily have to account for 50% of GDP. It might crack 30% if you add all levels together.


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## kcowan (Jul 1, 2010)

warp said:


> However , what we have created is a society where everyone thinks they are ENTITILED to everything...and constantly with their hands out looking for just that....a handout.
> As in, "we" are all entitiled to housing......NO YOU ARE NOT....you are entitiled to work, not be taxed to death, and house yourself.
> The amount of sheer waste at all govt levels makes me SICK, because it is MY money they are wasting...


I have some former workmates who think they are entitled to OAS. They took offence when I referred to it as a welfare program. I said that it is by definition a welfare program because it is only available to people who need it. When you make 105k taxable it is a thing of the past. Plus it is supported out of general tax revenues.

You would have thought that I wanted to start a war. All I was doing was calling a spade a f*cking shovel...


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## Guest (Apr 4, 2011)

warp said:


> As for taxing the rich...thast such a joke.....Ive never seen a "poor" person create a job or create any value or prosperity for any society ever.


My son's a poor person, he works hard, he's on the Dean's List ... there's a lotta people out there working hard, bettering themselves, contributing ... ask not for whom the bell tolls


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## warp (Sep 4, 2010)

Everyone has a right to their opinion...However I take exemption to my thoughts being called " a rant", by soem posters here,

Howver , lets look at the facts.

We pay tax on income.
We pay tax on comsumption... PST/GST/HST/ excise tax etc etc
We pay tax on savings,( even though interest savings rates may not keep up with infaltion)
We pay tax on investments...And tax on "phantom" dividend gross ups.
We pay Gas tax, tire tax , air conditioner tax, environmental tax
We pay tax on top of tax.
We pay property tax, ( which, for some older people, is so onerous, they have to sell their own homes!!)
We pay tax on essentials, like fuel to heat our homes, or electricity to turn our lights on.
Seniors in Ontario have to wait till after 9 PM to cook dinner or it costs them more.
We have to pay tax on that utter essentail,,,TOILET PAPER!

Many of these taxes are paid with "after tax" money.

The whole thing is a mess. Is it a wonder people are fed up?
And even though the govt collects all these taxes..they still run HUGE DEFICITS, ( which my son will have to pay for)
Of course politicians can look forward to nice pensions and benefits.
Public service workers get pensions and benefits that ordinary working taxpayers, ( who pay their salaries), can't even DREAM about getting.

Whats wrong with this picture??......plenty!

Some day soon,,the govts at all levels will take 100% or your income as taxes, and decide what you need to live on, and send that amount back to you.

So it if makes you feel fuzzy to call me a radical etc...I beg to differ , and would advise you to open your eyes to the reality of whats going on here.

And when I said that the "poor" dont add any value to society...perhaps I should have instead said the "parasites" who are always looking for handouts from govt.......

I do know one thing for sure...
When someone gets something for nothing..( eg govt handouts)
Someone else is getting nothing for something...( eg high taxes)


I have respect for anyone who tries to make a living to raise their families..whether it be a million dollar a year earner...a $100 K a year executive, or a $20 K a year working person.
There is self respect in all work.....but the govt shouldnt punish anyone for working harder or achieving more.

good luck


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## warp (Sep 4, 2010)

rikk said:


> My son's a poor person, he works hard, he's on the Dean's List ... there's a lotta people out there working hard, bettering themselves, contributing ... ask not for whom the bell tolls


So after working hard, and bettering himself, and giving up several earning years to go to school, you are happy that your son will be taxed at almost 
50 %, if he gets a great job, or starts a successfull business, ( and creates jobs) ?

And after your son pays all these taxes, he should just be quiet as he watches govts at all levels sqander this money, and live beyond their means?

Where is your logic here?

I was a lot like your son, many years ago, going to school,.... poor and trying to get ahead.
I hated govt intrusion then, and I hate it now,

Again, where is your logic here?


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## Square Root (Jan 30, 2010)

andrewf said:


> And I bet your tax bill averages about a million or even less. It's funny how people look at marginal rates and then scream loudly about how the government takes 50%! They have no concept or marginal vs. average tax rate. If the government took half of every dollar of income, then the government would necessarily have to account for 50% of GDP. It might crack 30% if you add all levels together.


I understand marginal vs average tax rates. Most of my income is taxed at either Dividend rates(max marg 16% in 2010) or cap gains (19.5%). Regular income max marg rate in Alberta is 39%. If over time half is at max marg of 39% and half at 19% the average would probably work out to about 25% on income of $1million.


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## HaroldCrump (Jun 10, 2009)

warp may have been non-PC, however, he is expressing a sentiment that is shared by hundreds of thousands of working Canadians.
As Canadians we are a demure, docile and PC culture so we often don't express ourselves in this manner.
However, it is getting more and more common.
Anyone expressing such ideas is immediately branded as a "right wing extremist".

Just this past week, two annual studies came out which, when taken together, paint a rather grim picture of taxation and the "gravy train".
The CRA reported that based on tax filings, 75% of Canadians made less than $50,000 a year.
Only 5% made $100,000 or more.

Also, this week, the Ontario "sunshine list" for 2010 reveals that the number of public sector workers making more than $100,000 a year has increased by 11% and there are > 70,000 in Ontario.
And this is in the midst of one of the worst recessions since the pre-war period.

Expressed as % the data is staggering.
The public sector workers comprise the lion's share of the 5% high income earners in the country.
You can begin to see how taxing the private sector workers and businesses (esp. small and medium) is paying for the fatcats in the govt.

We pay too much in taxes (income as well as other types) and our govt. is too big.
The middle income, middle class folks get the worst of both worlds - they bear the brunt of the tax burden, don't get the social subsidies of the lower income folks, and don't enjoy the privileges of the rich.


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## the-royal-mail (Dec 11, 2009)

Well said Harold and warp. The trouble is the pro-tax people don't seem to understand how heavily taxed the middle class really is. As we're supporting all these social programs that we're ineligible for, I feel we do pay our fair share. We fight traffic and bust our humps all day, only to read that we're not paying enough tax. Based on the condition of our roads and other needed services, I could argue we're paying too much as well as not getting enough value for money. And as Harold knows, I'm all about value.


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## financialnoob (Feb 26, 2011)

the-royal-mail said:


> *Funny how those who disagree with warp can only come up with single-line brief snipe comments rather than to actually put in any amount of effort to their posts.* Anyone can write one line comments. If you guys want to seriously discuss the issues as warp has done, then please put in the same amount of effort to your posts. Your one liners make you look lazy and I never take these comments with much more than a grain of salt.
> 
> I for one agree with warp and peterk. *Those who disagree are basically those who are at the trough, depending on our tax dollars to fund their lobby efforts. Tax and spend, that's the Canadian left-wing way.*


Mr. Pot, meet Mr. Kettle.  I guess the only question is which one of us should be called Mr. Pot and which should be Mr. Kettle. I call dibs on Pot.

I don't get the political swipe either. I think the tax and spend gets ridiculous, but I'm not a big fan of the cut taxes but continue to spend so the deficit increases either. Left or right wing, history shows both sides can be fiscally irresponsible.



warp said:


> Everyone has a right to their opinion...However I take exemption to my thoughts being called " a rant", by soem posters here,
> 
> Howver , lets look at the facts.
> 
> ...


Parasites works a lot better, thank you for that clarification. 

As for the suggestion of the flat tax, I've always liked that proposal. I think I would be willing to add on a certain minimum to protect the poorest of people. Some would argue that's not a true flat tax. But I'm a firm believer in moderation.

And I understand your frustration and share it at times. But I also think it's common to think we have no control over these types of things because they're so big, they're so vast and complex and beyond us, what can we do? It's easy to be apathetic and think one single vote or phone call or email to a politician is meaningless. 

But look how BC has fought the HST while Ontario, for the most part, idly sat on our hands. Auto insurance was a major election issue in New Brunswick in 2003, where the PC went from a majority to barely holding onto power. Auto insurance! How boring is that?

I'm not saying it will be easy to do something like overhaul the tax code, but at the same time, I think it's not impossible either. And if you're really that frustrated about it, I'd encourage you to put that energy to a positive use. Get involved with the Canadian Taxpayers Federation or similar organization.


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## andrewf (Mar 1, 2010)

"I do know one thing for sure...
When someone gets something for nothing..( eg govt handouts)
Someone else is getting nothing for something...( eg high taxes)"

You're right. Part of what you get for your nothing for something is a lack of thousands of desperate, poor illiterate young men on your doorstep who riot, rob and murder. That's what you see in very unequal societies. The peace that Canada enjoys is in part due to aspects of the welfare state. You turn your back on the poor at your peril.


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## warp (Sep 4, 2010)

andrewf said:


> "I do know one thing for sure...
> When someone gets something for nothing..( eg govt handouts)
> Someone else is getting nothing for something...( eg high taxes)"
> 
> You're right. Part of what you get for your nothing for something is a lack of thousands of desperate, poor illiterate young men on your doorstep who riot, rob and murder. That's what you see in very unequal societies. The peace that Canada enjoys is in part due to aspects of the welfare state. You turn your back on the poor at your peril.


Thats a ludicrous statement. 

So we should work hard and pay off the criminals not to harm us?
Is that what you are implying?

Do you sleep with the blankets over your head? get real !

Whats unequal about Canada?
Everyone can LOOK for work.
And if you look...you might find work, instead of demanding govt handouts, and in the process have some self respect too.

What about the "homeless" begging young woman who was just yesterday sentenced to life in jail , with no chance of parole for 12 years, here in Toronto, for stabbing a young man to death who refused to give her money?
Maybe we should have paid her off first.

She was able bodied,,actually nice looking too..but I guess she liked life on the street and drugs too.
Should we just work harder, pay more taxes and give her money so she can enjoy her lifestyle and leave us alone?

Compassion has its place, and I definatly believe in helping people who are having a rough patch....but its gone way overboard here in Canada now.
Everybody , it seems , is entitled to everything.


A few years ago, before he died, my father told me that in this country, "the government is the mafia"

The more I think about it...the more Im wondering if he wasnt right!

And heres another thing I have come to believe without doubt:

The bigger the government gets....the poorer its citizens get.

Simple and to the point.


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## andrewf (Mar 1, 2010)

Canada has relatively mild income inequality, compared to some places like the USA, and especially to other places like many South American, middle-eastern etc. countries. But government/welfare state is the main way of reducing inequality. You want to roll government back significantly, and make taxation more regressive. This will increase income inequality. It will also increase intergenerational poverty, and reduce social and economic mobility. Societies that feature these characteristics tend to have large portions of their population that are desperately poor, have no hope and many are driven to crime to support themselves and their families and filled with rage at the injustice. That you equate this with a suggestion that we should bribe criminals is bizarre.

How is homelessness an argument against the welfare state? Those people are on the street, for the most part, due to inadequacy in the welfare state. It's our refuse heap of people deemed of no use to society.

I'm by no means a supporter of big governments and high levels of nanny statism. I do think it's important to the health of society that everyone has some opportunity to reach their potential and that we don't grind those who fail into the dirt below our feet.


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## HaroldCrump (Jun 10, 2009)

No one is arguing against a reasonable degree of "welfare" state (at least I'm not).
That is the foundation of democratic socialism.
It is important to have a certain degree of public health care, social program, elderly care, etc.

However, there is a big difference in present day Canada (and some West European countries) between that, and the bloated, fat-cat govt. that we have.

Our govt. officials (and public sector in general) has become addicted to the tax revenue and consider themselves "entitled" to the comfort, prosperity and security that they buy for themselves on the back of our tax dollars.
Someone up-thread was saying how certain people feel "entitled" to social benefits like OAS, etc.
IMO, the most entitled folks are the politicians, govt. officials and the fat cat bureaucrats.

Our taxes are high, not because we have an overly liberal welfare state, but more because our officials are addicted to their comfort and easy flow of tax revenue.


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## Guest (Apr 5, 2011)

warp said:


> So after working hard, and bettering himself, and giving up several earning years to go to school ...


You said ... "Ive never seen a "poor" person create a job or create any value or prosperity for any society ever" which is what I was responding to. As to taxes, geez, taxes ... 47% is the number I've seen ... holy crap ... 30% income tax + 13% HST is 43%.


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## andrewf (Mar 1, 2010)

Hey, I've advocated for scrapping OAS too. And I'm all for privatization, outsourcing, and user fees in whatever areas make sense from a cost and feasibility perspective. That includes outsourcing waste collection, transit system operation (contract out the drivers/cleaning/maintenance/etc.). The LCBO/Beer Store should probably be privatized/deregulated. Power generators should probably be operated by the private sector, and this is the case to an extent. Highways should be user-pay. We should pay the true cost of our electricity and water.

We should allow private health care operators to supply services to the public health insurance system if they can do it for the rate the public sector hospitals receives and meet service quality metrics. Alberta has a misguided program back in the '90s where they actually paid private sector operators more than the fee paid to hospitals -- that's just nuts.

There is a lot of room for private sector discipline in the provision of these services.

Because some of these moves would be regressive (ie, hurt the poor more than the rich), I support increasing existing income supports for low-income earners, much like the existing GST rebate.

I get painted as some kind of crazed tax-and-spend liberal by some people here--and it blows me away considering I'm to the right of the Conservative party on a lot of issues. I just don't want to leave people to rot in the streets.


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## andrewf (Mar 1, 2010)

rikk said:


> You said ... "Ive never seen a "poor" person create a job or create any value or prosperity for any society ever" which is what I was responding to. As to taxes, geez, taxes ... 47% is the number I've seen ... holy crap ... 30% income tax + 13% HST is 43%.


HST doesn't even apply to all your after-tax spending.

Let's say you earn $100k a year. Most people in this situation claim they pay nearly 50% income tax. Yeah, that's the marginal rate. Your overall tax bill is only 30% of your income, including CPP and EI payments. Let's say 75% of your after tax spending is on items subject to HST (it's likely less). That gives 70% (after tax)*13% (HST)*75% HST applicable = 6.8%. Let's say you pay another 1% in excise tax on fuel and 3% on property tax. That means 41% of your income went to taxes. Still nowhere near 50%, and that's for a fairly high income individual.


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## Toronto.gal (Jan 8, 2010)

I wasn't sure if I should enter this heated political discussion. 

I would agree that our taxes are high and that the argument is not against 'a reasonable degree of "welfare" state', however, there is no question that more reform is needed in order to decrease welfare dependency as well as outright abuse of the system [by those that know the ropes]. No matter which way you look at it, [illegitimate] dependency on the system translates into poverty.

Reform however, is neither easy to achieve nor popular because in that case, a high number of government workers would find themselves out of a job, so it's a vicious cycle and hence government expenditures will continue to increase.


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## andrewf (Mar 1, 2010)

I'm not fan of welfare in particular. It's a poverty trap. I'd rather a Guaranteed Income for everyone (a bit like GIS we have already). And there are all kinds of subsidies out there that shouldn't be in place. But I find people who say taxes are too damned high a bit tiresome. The problem isn't the level of taxation, it's misplaced spending. If all of the spending were appropriate, and budget were balanced, taxes are at just the right level. So let's focus on misguided spending and maybe some tax cuts can shake out of that.


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## HaroldCrump (Jun 10, 2009)

andrewf said:


> And there are all kinds of subsidies out there that shouldn't be in place. But I find people who say taxes are too damned high a bit tiresome. The problem isn't the level of taxation, it's misplaced spending. If all of the spending were appropriate, and budget were balanced, taxes are at just the right level. So let's focus on misguided spending and maybe some tax cuts can shake out of that.


I agree with you...overspending is the problem.

However, the reason it is such a difficult problem to solve is because (in a democracy) no one can agree which spending is misguided and which one is not.
What appears to be a wasteful program to you, may be someone else's livelihood.
What you consider expensive, someone else may consider a bargain.
Think of things like public transit, solar energy, etc.

I also agree with T.gal that there is rampant abuse and misuse of the social subsidies.
It is hard to put numbers to it and I suppose every country has to tolerate a certain degree of abuse and free-loaders.
Which is why broad based social programs, and tax cuts are better than specific, targeted tax cuts.
It reduces the scope for abuse of specific programs and tax cuts.

In addition to the question of social programs and benefits, there is the whole question of public sector compensation.
All countries, big and small (from the USA to Portugal) are facing the issue of an over staffed and over fed public sector.
Greece and Portugal may be a basket cases, but the UK and US both are now coming to terms with the problem and have started substantial cuts to both the number and compensation of public sector.

Folks complain about the million dollar bonuses of private sector CEOs whereas the problem is worse in the public sector given the fact that is funded primarily by private sector tax payers.


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## andrewf (Mar 1, 2010)

Well, to get around the problem of disagreeing about which policies are wasteful and which are not, we can rely on evidence based policy making. Identify a policy goal, and how much it costs to achieve that goal. Then you can compare the policy to others to help determine which are good policies (assuming you agree with the goal) and which are wastes of money.

A fantastic example is the public transit tax credit. Its stated goals were to reduce GHG emissions and reduce congestion. I didn't see any stats on the latter, but there is little evidence that transit ridership has increase appreciably because of this credit, so it's unlikely there was much impact on congestion. On GHG emissions, it's been estimated that this program costs ~$10,000/tonne of CO2e emissions avoided. That's an abysmal failure and a waste because there are any number of policies that cost much less per tonne CO2e offset. Same goes for congestion/ridership.

Same goes for the ECO/Energy retrofit program. It's better than the transit tax credit, but the cost per tonne of CO2 avoided is fairly high. If CO2 reduction is a priority, it's better to let the market find the cheapest ways to reduce emissions by setting a carbon tax and varying it until you attain your desired level of emissions reductions. If you use the revenues to reduce other taxes, there should be no net negative long-term economic effect (it might even be positive, depending on which taxes you cut).


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## warp (Sep 4, 2010)

EVERYTHING any government does will cost as least twice as much as it should , and will only work half as well as it was supposed to.

The reason is simple....they are not spending their own money....they are spending ours.

When the goverment says a project will cost, lets say, $200 Million, and they promise it will save money in the future.....RUN for the exits!!
It will ALWAYS go way over budget.....and will save nothing.

Just look around..there are examples everywhere.

Yet these politicians keep popping up.
Here's a perfect example : Bob Rae
He almost single handedly destroyed Ontario's economy as our NDP Premier in the 90's, was roundly and correctly thrown out of office , and now he's found religion and sits as a Liberal MP, and actually ran for the leadership of the Liberal Party! 
He actually wanted to be Prime Minister! What a joke!

As a last thought , whats wrong with a flat tax?
The first $ 20 K is tax free...then lets say 16 % of everything else you earn.
No deductions, no credits , no bullsh*t....no social enginerring.

Somebody makes 10 times as much as you....he pays 10 times as much tax as you......where is the problem there?

Ok,,want to tax the rich? Any income over , lets say, $ 300 K he pays 30%.. satisfied?

This is a simplistic example....but there surely is such a system that would work

Next , get spending under control.
Reduce the pensions of politicians at all levels if they run ANY deficit, period.

If they need more money...make them explain why, and make them have no option but to raise taxes to do it...not constantly go into more and more debt every year.
That should stop them because they'd never get re-elected, which is a politicians first concern anyway.

We have to live within your means,,,govt should do the same.
And cut out all the handouts designed to get votes.
Thats another disgrace.


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## andrewf (Mar 1, 2010)

That'll work just fine, warp, when you identify the 75% of government spending you want cut. 'Waste' is not an answer.


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## the-royal-mail (Dec 11, 2009)

andrewf said:


> That'll work just fine, warp, when you identify the 75% of government spending you want cut. 'Waste' is not an answer.


It won't "work just fine" because there is no high level political will to do the right thing as warp describes, regardless if he specifies his priorities or not. Priorities are set by opportunistic politicians and lobbyists, not by those who list their wishes on an Internet forum.


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## andrewf (Mar 1, 2010)

You're right. A more realistic option is to move to the Caymans.


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## the-royal-mail (Dec 11, 2009)

We all need to remember that what we see today is the result of over 100 years of meddling, tweaking, adding, taking away, vote buying, cut backs etc etc. We're not operating on a clean slate and the impact of revamping the whole thing, IMO would be significant. Systems, staff, process would all need to be modified and reorganized at great expense. Ultimately if the result/goal is for us to pay less tax, the gov't will never go for it because that does not benefit them. They care about the bottom line and the lobbyists each care about their little piece. What warp suggests would probably adversely affect these numerous lobbyists even though he is right and I agree with and share his sentiment. I hope I am proven wrong but I just don't see it happening.


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## HaroldCrump (Jun 10, 2009)

warp said:


> Next , get spending under control.
> Reduce the pensions of politicians at all levels if they run ANY deficit, period.


It is not just the elected politicians...the entire public sector over-compensation is a huge issue.
Just in the past couple of weeks, look at the amount of dirt that has been revealed about what's been going on in Ontario and the city of Toronto.
Examples: the ON deputy health minister at the time of the e-Health scandal was given a golden handshake goodbye worth $750,000.
When questioned at Queen's Park, Mr. McGuinty, simply said that he is unable to discuss the reasons due to "privacy and HR issues".
What a load of bull.

There's also the currently underway scandal of all city councilors and TTC executives being given a free lifetime pass for the TTC.

Leaving aside scandals, the overall compensations of the public sector, including salaries, benefits, sabbaticals, pensions, perks, golden handshakes, expense accounts, etc. are absolutely insane.

The latest sunshine list and the CRA report on average income of working Canadians proves that the public sector compensation is way out of line.
It is a system that has gone berserk and is out of control.


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## Toronto.gal (Jan 8, 2010)

andrewf said:


> You're right. A more realistic option is to move to the Caymans.


I would prefer Monte Carlo; less heat.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> Examples: the ON deputy health minister at the time of the e-Health scandal was given a golden handshake goodbye worth $750,000.


I can understand that at times, little can be done with respect to legalities concerning severance packages, however, this idiot *resigned* & he got rewarded for that, I mean where is the logic for that??!!!

Someone once said to me that the government was just another welfare system [paid/supported by us], or as warp called it, the mafia. 

That is why reform is so difficult and not so much because politicians disagree on the issues; they want to get paid for doing precious nothing and reforms would simply jeopardize their high paying jobs!


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## HaroldCrump (Jun 10, 2009)

Toronto.gal said:


> I can understand that at times, little can be done with respect to legalities concerning severance packages


I know what you mean, but in the case of elected politicians and public sector, I don't agree even with that.
If a politician or public sector bureaucrat screws up to this extent (eHealth was a > $1B fiasco), they need to be fired with cause and not be entitled to any severage pay.
All post employment perks such as free TTC passes, box seats at the ACC etc. should be reneged as well.
Don't like it - just don't work for the govt.
Go become a CEO at an investment bank where you can get million $ bonuses for losing billions, but leave the tax payers money alone.

In general, I don't understand why public sector total compensation needs to be so obnoxiously higher than private sector compensation for similar job functions.
Witness how the US, UK and other countries around the world are starting to realize this and clawing back.


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## warp (Sep 4, 2010)

Many here agree about the problems etc....wasteful government, a bloated and overpaid and over-perked public sector, out of control public service unions,
and a mandatory tax system that is ridiculously complex to the point that a majority of tax payers can't comprehend or understand it.

I do hear in many posts a fatilistic thread that says basically theres nothing we can do about it, as the system seems entrenched, and those gaining from it will never give ip up. I have had the same feelings.

However there is a way to change all this nonsense, and get back to the real world.
And that would be to vote for elect someone like me....someone who calls it like it is and goes about making the tough changes agaist any entrenched oppostion....( even though Im easliy labelled a "radical", though I can ASSURE you that the lunatic left has no monopoly on compassion).

Many, many, of my friends have asked me to run for political office.

I do hope that Rob Ford, the new mayor of Toronto will stick to his guns, and finally get things under control at City Hall.
I have spoken to him on several occasions and told him to keep working, even as the loony leftists ridicule him, and remind him thata majority of voters here in Toronto are quietly on his side.

What we need is someone who says and does the same things at the Provincial level....and ultimately on the National level.

I am holding my breath


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## the-royal-mail (Dec 11, 2009)

warp, I think you are referring to Mike Harris.


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## andrewf (Mar 1, 2010)

I'm mostly okay with Ford, as long as he lays off the sauce in public. It's unseemly for the mayor to get drunk, shout abuse at a woman and get thrown out of a Leafs game.


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## HaroldCrump (Jun 10, 2009)

warp, I'm very encouraged with some of the things Mayor Ford has been doing for Toronto.
The changes on expense account spending annouced earlier this week are a big step in the right direction.
What a dramatic and welcome change from the insane spending habits of David Miller.

The issue is...it often gets hard to scale out this type of strategy and value system at the provincial and federal level.
There you get bogged down into more politics, vote banks, very very powerful interests groups like the CAW etc.

It is also shameful but not surprising some of the insults and mockery that the ultra left throws at people like Ford (recent Now magazine fiasco).

Our current provincial leader (McGuinty) is very much a David Miller type personality and it'd be very good if we can have someone like Ford be the next premier of ONT.
However, not likely to happen given the choices we have.
The only contender is Hudak and I seriously doubt if he can even make a ripple come election time.

I will of course be more than happy to vote for someone like Rob Ford.

Also agree with TRM re. Mike Harris.
And that just further goes to show what happens when you try to scale a Rob Ford type personality and policies to the provincial and federal level and exactly how problematic and hard it gets.


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## slacker (Mar 8, 2010)

If there's a true fiscal conservative, without mixing in with the controversial religious conservatives, I can consider voting Conservatives. But today's Conservative Party are not true fiscal conservatives. They're every bit the vote buying populists as other parties.

The closest we had to true fiscal conservatives were the Chretien/Matin Liberals. (not withstanding the corruption and sponsorship scandal)


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## warp (Sep 4, 2010)

the-royal-mail said:


> warp, I think you are referring to Mike Harris.


I liked Mike Harris, and was involved in Provincial politics in Ontario when he was Premier. The voters kicked out loonie lefty Bob Rea, and wanted real change.

However, if you check the record, Harris did cut taxes, BUT he did NOT reign in spending. That was his flaw.
He talked a good game, but never did get the public purse strings under control.
Then Ernie Eves came in and was even worse, spending every dime he had, and every dime he didn't have, in a vain attempt to win re-election and remain Premier. This caused more public debt.

McGinty is a lefty, and more and more debt just keeps piling up.
He talks about how proud he is that he gets along with the teachers unions!
Guess what.....his WIFE is a TEACHER!! 
Think maybe she has some say on whether teacher's union demands are met at negotiation time?

You just get fed up with all of them.

What we need is a politician who has NO interest in re-election, and who comes in and cleans up this mess once and for all.

I'm still holding my breath.


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## financialnoob (Feb 26, 2011)

warp said:


> I liked Mike Harris, and was involved in Provincial politics in Ontario when he was Premier. The voters kicked out loonie lefty Bob Rea, and wanted real change.
> 
> However, if you check the record, Harris did cut taxes, BUT he did NOT reign in spending. That was his flaw.
> He talked a good game, but never did get the public purse strings under control.
> ...


My main concern with someone cleaning things up is that they don't do the short-sighted decisions. That's my biggest concern with Rob Ford in Toronto. I absolutely agree that we need to cut back the gravy train, but I hope he will not just focus solely on short-term, short-sighted results that save a dime today but cost us a dollar tomorrow. 

Our various levels of government are so poorly run that you could cut costs AND increase efficiency quite easily. But too often, politicians just slash department budgets and let each department figure it out how to deal with it on their own. No one wants to slash payroll, so they start slashing expenditures that impact the quality of service, frustrating government employees and taxpayers at the same time. 

Unfortunately, the type of things that need to be done will result in political suicide. You're right on the mark that we need someone who has no interest in being re-elected. Of course if anyone is smart enough to tackle this mess, they're probably smart enough to stay out of politics entirely


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## HaroldCrump (Jun 10, 2009)

financialnoob said:


> Unfortunately, the type of things that need to be done will result in political suicide. You're right on the mark that we need someone who has no interest in being re-elected.


Precisely!
And when such an official (mayor, premier, prime minister, etc.) gets voted out, the next dude coming in will immediately revert everything back to the old ways, usually with a vengeance.
Therefore the only true solution is voter awareness and voter action.
If the voters accept and agree that the "gravy" needs to be cut and consistently make voting decisions based on that, it will have a true long term impact.
As you say, it is always easy to cut the low hanging fruit of expense accounts etc.
It takes deeper analysis, political will and shrewd administrative capability to reduce overall public sector compensation without cutting services (or with minimal cuts).
And it cannot be done without voter support.


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## the-royal-mail (Dec 11, 2009)

HaroldCrump said:


> Therefore the only true solution is voter awareness and voter action.


Agreed - the only trouble is that the only ones who seem to be doing this are the fringe minority lobby interests, rather than those who are looking out for the greater good and that benefits the majority of the population. The left wing in this country is terrible for pandering to these "activists" at great expense to the rest of us.


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## slacker (Mar 8, 2010)

financialnoob said:


> My main concern with someone cleaning things up is that they don't do the short-sighted decisions. That's my biggest concern with Rob Ford in Toronto. I absolutely agree that we need to cut back the gravy train, but I hope he will not just focus solely on short-term, short-sighted results that save a dime today but cost us a dollar tomorrow.
> 
> Our various levels of government are so poorly run that you could cut costs AND increase efficiency quite easily. But too often, politicians just slash department budgets and let each department figure it out how to deal with it on their own. No one wants to slash payroll, so they start slashing expenditures that impact the quality of service, frustrating government employees and taxpayers at the same time.
> 
> Unfortunately, the type of things that need to be done will result in political suicide. You're right on the mark that we need someone who has no interest in being re-elected. Of course if anyone is smart enough to tackle this mess, they're probably smart enough to stay out of politics entirely


Sometimes a government house cleaning involve throwing out the baby along with the bathwater. Witness the Mike Harris government sold out the 407 on a dirt cheap price of $3.1 billion, all in the name of the right wing religious bent on privatizing.

The current valuation of the 407 is close to $9 billion dollars.

Thanks Mike Harris for your "common sense revolution".


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## financialnoob (Feb 26, 2011)

HaroldCrump said:


> Precisely!
> And when such an official (mayor, premier, prime minister, etc.) gets voted out, the next dude coming in will immediately revert everything back to the old ways, usually with a vengeance.
> Therefore the only true solution is voter awareness and voter action.
> If the voters accept and agree that the "gravy" needs to be cut and consistently make voting decisions based on that, it will have a true long term impact.
> ...


I agree with all of that. I only wish people truly understood that there are actual costs to things like freedom and democracy. We see people dying for these things overseas, yet many North Americans take it for granted. 

The thing about freedom and democracy is that it gives control of the country to the people. It's a very serious responsibility, yet few even realize that. I loved that Team America song about how freedom isn't free. If only it were $1.05.



the-royal-mail said:


> Agreed - the only trouble is that the only ones who seem to be doing this are the fringe minority lobby interests, rather than those who are looking out for the greater good and that benefits the majority of the population. The left wing in this country is terrible for pandering to these "activists" at great expense to the rest of us.


This is the second cheap-shot at the left I've seen from you and neither made much sense. I say that as someone in the middle who has voted left and right depending on the candidate. 

It always cracks me up when someone on one side blames the opposition for doing what all political parties do. Minority lobby interests are not exclusive to the left-wing. It's especially funny considering how many Tory staffers have become lobbyists after leaving the party. It's practically a stepping stone to becoming one. In fact, the Conservatives have even hired a few former lobbyists for their campaign. Everyone is guilty of it.


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## jmalias (Aug 10, 2010)

warp said:


> Apologize?? and Retract?? Who are you, my Father?
> 
> Theres a lyric in an old rock song.....when I was younger.
> 
> ...


Not that old, I had a boss many years ago that played this song to much, you made me look, even had a listen on youtube

cut and paste time
A Space in Time is the seventh album by the British blues-rock band, Ten Years After. It was released in October 1971. A departure in style from their previous albums, A Space in Time has more of a pop feel to it. It also contains their biggest hit, I'd Love To Change The World, the third track on the album. It is a song protesting capitalism and war, and features a speedy, 30-second guitar solo by lead vocalist Alvin Lee. 

They are still touring the world (minus Alvin), no early retirement for these guys.


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