'Raise taxes on the rich' is a verse straight from the NDP hymn books.
Well, according to a new Ipsos Reid poll, released on Thursday, most of us feel that way.
Nine in ten (88%) Canadians ‘support’ (48% strongly/40% somewhat) the following resolution...the rich should pay more taxes. Just one in ten (12%) Canadians ‘oppose’ (3% strongly/8% somewhat) this resolution.
The survey also shows a similar proportion (89%) of Canadians also indicate they’d be ‘supportive’ (54% very/34% somewhat) of a ‘millionaire’s tax’, whereby families with a combined annual household income greater than $1,000,000 would pay a special or additional tax on all income over a million dollars.
The pollster also asked Canadians what they considered to be "rich". That answer —which might surprise you — is a household income of $195,000.
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Gregory Thomas of the Canadian Taxpayers Federation says that raising taxes on the rich won't work in the long term.
"The CD Howe Institute illustrated this recently in a study of Ontario’s tax hike [in their 2012 budget] for incomes over $500,000. CD Howe forecasts that hiking taxes to an effective rate of 49.73 per cent will bring the government extra revenue this year, because Ontario took taxpayers by surprise with the revenue grab," Thomas told Yahoo! Canada News.
"But within a few years, all that extra revenue will disappear, as taxpayers make adjustments, moving assets and income into other jurisdictions to avoid the high rates."
Charles Lammam of the Fraser Institute suggests higher personal income taxes would be a mistake and would lower our competitiveness in relation to the United States.
"Comparing our personal income tax system with the United States shows that our combined federal-provincial rates on upper-earners are generally higher than comparable rates down south. What’s worse, our marginal rates here kick in at relatively low levels of income. Consider that Canada’s top federal income tax rate applies to income beginning at CA$135,054 while the new top rate in the US applies at US$400,000 for singles," he told Yahoo! in an email exchange.
"It is important to have competitive personal income taxes for many reasons. Doing so allows us to better compete with other countries in trying to attract and retain entrepreneurs, investors, and skilled workers like doctors, lawyers, accountants, and engineers.
"Higher income taxes are also a poor way to raise revenue to close budgetary deficits. Higher tax rates almost always lead to lower than expected revenues, in part since higher-income earners respond by arranging their affairs in a way that minimizes their tax burden. Revenues can also be lower because higher rates discourage additional income earning activity."
The full Ipsos Reid Survey with detailed tables can be found here.
The poll was conducted online between May 16th and May 23rd, 2013 with 1,055 Canadians and is accurate to within +/- 3.4 percentage points.
Taxing statistics: (Source: Ipsos Reid)
- The top 1 per cent of income earners in Canada contribute 21.2 per cent of all federal, provincial and territorial taxes
- The bottom 20 per cent of income earners contribute just 1.6 per cent of all income taxes
- The bottom 50 per cent of Canadian earners pay approximately 17 per cent of all income taxes
(Photo courtesy of Reuters)
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