Should the ultra-rich pay more taxes?
Okay, forget this post’s title for a second.
Because, to sit here and ask if the rich should pay more taxes is kind of a loaded question. It’d be like wondering, “Does Stephen Harper have a helmet for a head of hair?” or “Should the Russian World Junior squad hire its own team orthodontist?” Doesn’t really promote an honest, thorough discussion.
Yet, surprisingly, there’s one to be had here. On paper, it makes sense to charge the rich through the nose on taxes, but is that the way the world should really work? Let’s look through each side of this:
As you might recall, super-investor Warren Buffett came out near the end of 2010 and said, flatly, that he should be paying more in income taxes.
“I think that people at the high end, people like myself, should be paying a lot more in taxes,” he told ABC News. “We have it better than we’ve ever had it.”
Indeed, the compensation gap between the ultra-rich and average consumer has rarely been larger, but is it in the public’s best interest to raise tax rates at the highest level to squeeze more dollars for government programs?
Your gut reaction: of course it is! Who needs to be paid $24.2 million per year when the national employment rate hovers around eight per cent? Tax the fat cats and pave a road or two, for crying out loud.
The flip side, though, at least has to be acknowledged. The thinking among the rich appears to be, Be careful over-taxing us. When we’re left at a regular tax rate, the more we spend and the more dough trickles down to the rest of consumers. (Buffett, however, dismisses this notion: “That has not worked the last 10 years, and I hope the … public is catching on.”)
Further, the argument goes, raising tax rates among the rich and their corporations is a sure-fire way to scare North American industry into packing up shop and moving to the Indias and the Chinas of the world. You think unemployment is bad now, big companies appear to be saying, watch what happens when we leave.
Do those latter points hold any weight? Do you see any real negative – any genuine reason of caution – to raising tax rates for the super-rich?
By Jason Buckland, MSN Money
Posted by: Education | Jan 6, 2022 11:00:33 PM
Even with the same tax rates, the ultra-rich people are already paying more. 10% from a 10K salary and 10% from a 10 000 000 salary give significantly different numbers. The question is, "why should we penalize the ultra-rich people for being successful?" Do they use more of our public resources? No. I think it's ridiculous to tax some people 20% of their salary while taxing others 60% of theirs. This is the type of attitude that promotes mediocrity and that has people wondering: "Why should I work harder if the government penalizes me more for my success? I will just go do the minimum"
Posted by: Lilly | Jan 7, 2022 12:24:23 AM
Making and having more money does not necessarily mean that you are working harder. The most hard-working people that I know work at minimum wage but precious few executives or big business leaders get into the office to delegate before 10 AM and can leave whenever they wish.
If the rich do not pay their share of taxes (proportionate to their income) then the whole burden falls on the every shrinking middle class who have to make up for the shortfall in government revenue in tax cuts to the very rich and other perks. Let us face it , the "Trickle down" Chicago School of Economics economy is a dismall failure and has been the bulwark of all Rightist government for the last 4 decades which has seen the rich increasingly getting richer and the poor getting poorer.
The same thing happend in the Dark Ages - the Feudal Lords were exempt from paying taxes on (on the excuse that they would be there to defend the realm when the monarch needed them) but the serfs were taxed and lived in Misery. And that is why everything stagnated and they are called the Dark Ages.
The trouble is that those making $100-200K think they are in the leagues of the Bill Gateses of the world. When government say they are cutting taxes, what they really mean is they are cutting more taxes from the Ultra-Rich and from multinational corporations.
Posted by: Cliff | Jan 7, 2022 9:30:23 AM
Yes, the ultra rich should pay more. As stats show, the rich are gettting richer and the poorer are getting poorer. Some will argue that the ultra rich should not pay more or even anything, because they create jobs. BS. At that top end of the money scale, the big companies and ultra rich do not create jobs. Their main thing is to make more money and this causes less jobs. People need to look back in history as to what created an economic boom and properity. It was when there was a large middle class. This group created the biggest economic boom. They bought all of the products that is being manufactered. Ultra rich only buy luxury items which only supports the minor niche manufacturing industry. If you doubt me, look a China right now. The boom is due to a large growth in their so called middle class. Their economy is being supported by their upcoming middle class without the western world help. Ultra rich have not provided anything useful to the rest of the people in the world. They sit back and influence our governement officials which a majority of them should not be in the government. Tax breaks in back ecnonomic times will not create the many jobs we need now.
Posted by: carl | Jan 7, 2022 10:39:56 AM
Anybody that falls into the" why tax the ultrarich just because they're successful" needs to realize they've been fed a line of bull. First of all recentlyI listened to a reseacher that correlated successful people such as Mr. Gates and through study and reseach has concluded that they have had the benefit of being in the right circumstance at the right time. In the case of Mr. Gates he was uniquely the recipient of free computer time at a local university where he grew up, barring that it was concluded, that he probably would not have succeeded to the extent that he did. However we do have to admire him for crawling out his bedroom window at various times of the early morning to take advantage of that free (mainframe) computer time. So does success hinge on fate as well as smarts and if that is the case maybe they should pay more taxes! What the rich don't realize is that either by fate or smarts they are rich because they've been in a situation(country) where these things are possible with rights and freedoms that protect them. This might not be the case if they were to move off shore to other countries to avoid paying their fair share.
However I am of the mind that the rich should pay more but not through tax rates but taxes on extragances. For example, so you want to drive around town in Hummer worth $100,000 then maybe you should pay an extra little luxury tax of 20%.
I think that this way the incentive is there to motivate people to succeed while capturing the tax money when they decide to show off their success.I think that this would be fair all around.
I get a real charge out of the bumper sticker on vehicles " he who has the most toys at the end wins" which is symbolic of the mindset in our society, well in my mind, that sticker should have "and i've paid the taxes" added to it.
Posted by: Josh | Jan 7, 2022 10:54:02 AM
I don't but the whole "taxing the ultra rich promotes mediocrity" argument. I use to, but not any more. We're not talking about the small business owner who's made a few million, or the successful manager who makes a nice wage, or the doctor who's paid well because he/she provides an essential service and spent 10 years at school. We're talking about the billionaires who make a lot of their money because the economy is played with loaded dice when it comes to compensating them. I will not deny that some of them work hard and have self made riches. That's really not material to my argument. As stated in the article even Warren Buffet agrees it's not fair how easy it is for him to make money on the backs of the workers. It would be stupid of him to quit doing it ... but he'd rather be taxed more so he can be doing his part. That's why Bill Gates and Mark Zuckerman are actively calling for the rich to donate over half their wealth during their lives. Honestly, when the ultra rich are starting to feel so bad about how much money they're getting aways with that they insist on giving half of it back (although notice how the billionaires insisting on giving their money back are all self made billionaires), then it's time the government taxes them more.
Posted by: John | Jan 7, 2022 10:57:55 AM
I'm of the thinking that everyone should pay the same percentage of tax, no layered approach as everyone is suppose to be equal. I'm also of the thinking that all the tax breaks that the ultra rich exploit need to be taken away. An example would be the lower tax they pay on their stock options, where most senior officers make most of their yearly income.
Posted by: Buck | Jan 7, 2022 11:31:44 AM
Everyone should pay at the same precentage of income. Every tax payer should be able to have the first $25,00 of their income tax exempt so the disadvantaged and pensioners are not burdened. The tax rate would only have to be about 20% if enough people paid their taxes
Posted by: John | Jan 7, 2022 11:32:50 AM
If they demonstrably earned it (like Steve Jobs) I wouldn't say tax'em at much higher rates, but hedge fund managers, bankers, I for one don't see how they contributed to the economy to the level that justifies their exorbitant wealth.
Anyway if they want to leave our economy let'em, we should thereafter close our doors and see how the developing economies treat them, and to what level their governments and people will protect their property rights.
to John above: I don't think we should tax individuals, but the position or the level of wealth is what should be taxed. It's not like back in the day where a person built their own products, or grew all their on food to be put to market. Almost everyone works interconnected within a huge economic system, so tax the positions within the system. Individuals can change their status whenever they feel, if they feel they are being treated unfairly.
Posted by: Claude | Jan 7, 2022 11:42:03 AM
Forget taxing anybody, income taxes we're only suppose to be for the war effort, that's over remember, no taxes I say, consumer taxes only, taxes would be balanced on income then. Purchase a luxury yatch pay the taxes, purchase a canoe pay the taxes, everything is balanced.
Rich or Poor.
Posted by: Andrew | Jan 7, 2022 11:53:08 AM
First of all the ultra rich do pay more, they earn income at higher levels and overall they pay more tax dollars than the poor person or middle class. Though the middle class may pay the majority of the tax revenues it is because their shear numbers outweigh the ultra rich. But make no mistake the ultra rich pay far more taxes in a year than most will pay in a lifetime simply because they earn more. It always brings me back to the story of the group of $10 friends who used to go to a local restaurant once a week and they always paid the bill as a proportion of their wealth. 4 of the friends only paid $2.50 each, 3 paid $4.00 each, 2 paid $5.00 each and 1 paid $68.00 for their weekly bill. This happenned weekly for several years and everyone was happy to pay his share. Then one day the waitress said today we are going to give them all 20% cash back on today's bill for being loyal customers. They were all happy. When she returned with the cash she gave 4 of them $0.50 each, 3 of them $0.80 each, 2 of them $1.00 each and the last guy received $13.60. The 9 others could not believe how unfair this was why should he get so much money back more than double what they all received collectively. So they decided to take their friend outside and teach him a lesson and they beat him up and took his $13.60. The next week came along and only 9 of them were there. The waitress presented them with their $100 bill for their meal and they all quickly brought out their usual money totalling $32. The waitress told them they were $68 dollars short and wanted to know who was going to pay the rest. This is when they realized that their old friend who they had all turned on had been carrying them all this time. Keep in mind that the rich already pay more than the poor and middle class and if ever they are to forced to pay more than their fair share they have the means to get up and leave and move to another country that treats them fairly. Leaving the rest of us to have to cover their share. Any of you who think we should still tax them more should have your heads examined and don't actually understand for a second how our tax system actually works.
Posted by: Chazztbay | Jan 7, 2022 11:53:29 AM
Carl kind of has the right idea. It is folly to think you can just keep raising taxes on the wealthy without repercussions.
Here is a link for all of you who think those better off don't pay their fair share. It is a direct link to a Stats Canada site from the Federal government. Yes the data is a little bit older (2002) but the trend is the same today as it was then.
Scroll down to the section titled: Shares of total income tax by income quintile
You will see that the top quintile (top 20%) of earners paid 53% of the TOTAL tax bill.
Do the higher earners use 53% of our schools, roads and hospitals ? No. But they pay for them.
There are millions of people who pay no tax, and yet they use a much higher proportion of resources than the wealthy. It is widely documented that poorer people use more medical services, they often have more children using more school resources, ect.
I am not advocating they pay more, I am just trying to educated people to look at the big picture.
You simply cannot reasonably expect these people to pay more than they already pay.
As Carl stated, if you want to attempt to make the wealthiest pay more you need a VAT (Value Added Tax). That is what PST/GST are and we all know how those went over. As we have seen however those type of consumption taxes tend to discourage spending on a variety of things.
I don't have all the answers, and I don't pretend to. What I do know, is you cannot keep asking a small group of people to pay an increasing disproportionate share of the total tax bill and then bash them and try to punish them when they refuse to pay more.
Posted by: Chazztbay | Jan 7, 2022 12:00:40 PM
Lol, I see Andrew has taken Intro Economics. I remember that story. Too bad that isn't mandatory reading for everyone.
And John, I don't know why you think the wealthy will have to go to a third world or dictator type country. Our neighbours to the South with a much less punishing tax rate will welcome them with open arms.
So will tax havens like Switzerland and the Cayman Islands.
Sidenote: Steve Jobs did not earn anything. iSheeps gave him his wealth. Charging inflated prices for inferior products is not earning it.
Posted by: Feda | Jan 7, 2022 12:14:37 PM
Lets not forget, who is creating jobs ? isn't it the rich ? by expanding exsisting business or by spending money or even simply keeping it in the bank and let the bank manage it.
Whats the government going to do with that extra money from over taxing ? they seems to talk about bad budget planning and all the debts the got us into in the first place - but how deep did they think about shipping the low - middle class jobs to Asia - specially when this country's revenue depends on immegration and the immegrants that are being promised a future in Canada. So now that we took jobs away from the low- middle class lets go ahead and over tax the rich ones !! Canada - wake up - did you ever hear about reverse immegration ?
Posted by: Colin French | Jan 7, 2022 12:32:17 PM
A bumper sticker in my neighbourhood reads "Don't believe everything you think". The assertion that there are any real or durable benefits to any society of protecting access to wealth is only based on the interests of those who are already wealthy. Their interests have been advanced steadily by lobbying government for laws that protect their access to wealth, but expose others to increased risk of financial hardship through dismantling effective social safety nets. Just look at the current speculation on the sustainability of Canada's CPP and universal healthcare by those who are seeking to dismantle them in order to speculate on the financial opportunities they could provide to entrepreneurs. Question is, what happens when people start gambling with their pensions or can't afford health insurance?
Posted by: Ken | Jan 7, 2022 12:39:40 PM
A few things to take into consideration, first, the rich buy more, and more high end items than the rest of us so they pay more in that way. Second, they pay more at the civic level because their homes are more valuable and are taxed accordingly. The third is the richer you are, the more ways there are to hide/establish write offs to pay less income tax.
The problem we have isn't that the government isn't collecting enough taxes, the problem is the lack of financial management of those tax dollars.
Posted by: 48Mick | Jan 7, 2022 12:41:18 PM
What they should tax is corporations that outsource jobs. Make it unprofitable for them to stick us with shoddy crap made in India and China. As for raising the fatcat's taxes. Yeah, listen to Warren Buffett, he's smarter than the rest of you schmucks.
Posted by: Chazztbay | Jan 7, 2022 12:55:25 PM
Warren Buffet has already indicated that he is going to give 98% of his wealth back, so yes he is probably going to admit he should pay more. That doesn't mean everyone feels the same or that it should be forced on everyone.
In North America, many of our very wealthy give back. To the arts, schools, medicine ect. When Bill Gates and Warren Buffet went to China to ask the Billionaires there to join their commitment to giving back the wealthy in China wouldn't even meet with them.
Some of you people show no ability whatsoever to see beyond what is right in front of you. Punishing a corporation for outsourcing some jobs just means they will move the entire company elsewhere (not necessarily a third world) and still just sell those products to us. Except without the jobs we do have and the tax the company pays, oh and the tax the employees pay. Oh and also the spin-off jobs ect, ect. We live in a global world where jobs and resources are portable. This is fact. This is reality. No more Unions creating maintenance men making $25 an hour and other jobs that had artificially inflated wages. And before any of you thinks about saying we should just close our doors to the global economy, let me remind you of a country that does that. North Korea.
Posted by: Jerry | Jan 7, 2022 12:57:14 PM
I think those who have more should contribute more. When the cost of living index is at a certain point, those who have less, have less to give. Very simple here. I believe in a fair system, but for those of us who can't afford a penny in taxes, we do still pay. At my level of pay right now, I do believe I pay my fair share in Employment tax, but when you add in all the other taxes, fees, licenses etc, it ends up too much. I can't make ends meet. I don't have much to begin with. I have a car loan, some credit card dept, (very little) and a small student loan being paid off, and modest child support. At the end of every pay, I have little or non left. Living beyond my means????
I am angry at people who give a blanket statement like this for everyone. I need a car to get to work, and I live with my wife who lives about 40 minutes from her work and I live about 45 to 50 minutes from my work, opposite directions. We both need cars. I am looking for work in the area, but not easy.
So there are my circumstances and I could pay less tax, but I can't of course. I am not complaining, because I want to do my part, but I have to be able to afford to. Too much taxes is "killing" the lower income earners. Would it be fair to say the minimum cost of living expenses is in the neighborhood of 25 000 per year? I think so, but with everyting else, I have to go to the food banks now and then, and I shouldn't have to do this. But there you are. The HST should be abolished completely. We don't need it. I follow tihe news all the time, and if you knew the billions of dollars that are wasted by our government every year, you would see where I am coming from.
Posted by: Jerry | Jan 7, 2022 1:01:19 PM
"Posted by: Education | Jan 6, 2022 11:00:33 PM
Even with the same tax rates, the ultra-rich people are already paying more. 10% from a 10K salary and 10% from a 10 000 000 salary give significantly different numbers. The question is, "why should we penalize the ultra-rich people for being successful?" Do they use more of our public resources? No. I think it's ridiculous to tax some people 20% of their salary while taxing others 60% of theirs. This is the type of attitude that promotes mediocrity and that has people wondering: "Why should I work harder if the government penalizes me more for my success? I will just go do the minimum""
Those who have more, can give more. They have more opportunities for tax deductions, which when you have less money, you don't. And I am talking about those reductions that are just not available to the poor. You can't say something out of context like that. Percentage wise, those with more money pay less taxes, not the same. Initially, yes, the tax bracket is there, but with the availability and loopholes of tax breaks, they very often pay less.
Posted by: Saskboy | Jan 7, 2022 1:02:42 PM
It's a mistake to think of it as taxing the super rich more, based on how many services they access, or how much work and value their work provides. They can be super rich in part due to capitalism, and in greater part to their use of what was once the public good. If their land were owned still by the crown, then anyone - the poor included - could be making money from that land or feeding themselves. But rich people own more real estate, and that gives them more power over people who own less property. It is equitible to the vast majority of citizens for the rich to pay more, for owning more of what rightfully belongs to every citizen.