"Raise taxes on the rich to pay for social programs" is a verse straight from the NDP and Occupy movement hymn books.
"Make the rich pay," they like to chant.
But according to a new study called Ontario's Tax on the Rich: Grasping at Straw Men, the 'lefties' have it wrong: raising taxes on the rich does not equate to higher government revenues.
The study, released Wednesday by the C.D. Howe Institute, claims wealth levies — such as Ontario's two per cent tax increase on high-income earners — can actually have a detrimental effect on the economy.
Alexandre Laurin, the author of the report, predicts that the ease with which high-income earners can adopt strategies to reduce their taxable income means the new levy will be applied to a diminishing pool of individuals.
"Some [wealthy individuals] may choose to substitute more leisure for overtime work, to migrate to a lower tax jurisdiction, to engage in more aggressive tax planning, or to modify forms and timing of compensation, use of tax deductions, and tax avoidance or evasion," he writes.
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Laurin concludes that a decade from now Ontario's NDP championed tax will lead to combined federal and provincial government revenue loss of over $800 million a year. Moreover, contrary to the Occupiers' refrain, Ontario already has a progressive wealth redistribution system in place.
"The top one per cent of earners shoulder more than one-quarter of all income taxes, while the bottom 75 per cent shoulder about 12 per cent," Laurin writes.
"The share of taxes paid by the wealthiest earners is more than double their share of taxable income, while the top 10 per cent pay two-thirds of all net income taxes."
The top one per cent in Ontario, it seems, is already paying its fair share.
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