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article imageCanada's top one percent paid 21.2% of all federal, prov. taxes

By Andrew Moran     Jan 28, 2013 in Politics
Ottawa - The top one percent in Canada paid 21.2 percent of all federal and provincial/territorial taxes, while accounting for 10.6 percent of the nation’s total income, a new Statistics Canada report released Monday found.
In 2006, the top one percent earned 12.1 percent of the country’s total income. In 2007, the top one percent paid 23.3 percent of all federal and provincial/territorial taxes. The share of income taxes paid by the rest of Canadians tax filers decreased from 86.6 percent in 1982 to 78.8 percent.
According to the report that tracked data from 2010, in order to become a member of the exclusive one percent in Canada, a worker has to earn an annual salary of $201,400, up from $147,500 in 1982.
The statistics agency observed the top 25.5 million tax filers in Canada, whose share of total income has increased gradually from 1982 to 2010. These figures reflect the concerns amongst poverty organizations and the Occupy movement that flooded the streets of the United States and Canada in 2011.
However, the rich in Canada are still paying an enormous sum of the taxes that fund social services that are important to many residents. The median federal and provincial tax paid by the top one percent was $60,900 in 1982 and increased to $90,100 in 2010, while the the rest of the tax filers declined from $2,800 to $1,800 in the same time period.
“Over time, the top one percent of tax filers have become more likely to remain in the group. Among those who were in the top one percent in 1983, two-thirds (67 percent) were also in the top one percent in 1982. By 2010, this one-year measure of high income persistence had risen to 72 percent,” the agency stated in the report. “The five-year persistence also increased. In 1987, close to 44 percent of the top one percent filers had also been in the top one percent five years earlier, that is, in 1982. This proportion rose to 48 percent in the early 1990s and to 52.7 percent in 2010.”
The five largest metropolitan areas in Canada consisted close to two-thirds of the nation’s one percent. Calgary, Edmonton, Montreal, Toronto and Vancouver had 62 percent of them and 42 percent of the rest of all tax filers.
(All figures are reported in 2010 dollars).
When looking at data, it can be concluded that the rich are getting richer and the poor are getting poorer. However, what should be understood with economic data is that Canadians start off poor but then they get richer over time.
Another important factor is that who actually comprises of the income distribution. Young people who come into the labor market and immigrants enter the income distribution at low levels, but gradually become wealthier. Therefore, these individuals become the new poor, while the old poor slowly gets richer.
Like most data, similar to the Statistics Canada study, it doesn’t provide absolute incomes. If someone has a smaller share of the national income it doesn’t necessarily mean that they are absolutely poor. For instance, if someone is asked would they prefer to have a quarter of a cheesecake or one-third of a cheesecake, an answer would depend on how big the cheesecake is in the first place – a quarter of the cheesecake would be better if the pizza was larger than having a third of the cheesecake if it was smaller.
More about Canada, one percent, Taxes, Income, Statistics canada
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