The super-wealthy will pay zero tax on $35 billion in profits

While income from employment, retirement benefits, interest… is fully taxable, only half of the income from capital gains is taxable.

Who will benefit the most from this attractive tax system? Wealthy taxpayers.

• Also Read: You will pay less tax from July 1

According to the latest tax data, 199,310 wealthy Canadian taxpayers, including 35,480 Quebecers, who made nearly $35 billion in capital gains in 2020, were completely sheltered from the tax. This represents roughly $175,600 in untaxed income per head for wealthy taxpayers.

Here’s a breakdown of the $35 billion in earnings with no tax withheld:

– $27.3 billion in capital gains on the resale of stocks and other investments;

– $2.8 billion in gains realized with stock options;

– $4.8 billion in capital gains with “small businesses”.

Even worse…

A fact worth highlighting with a big red line: In 2020, about 1,410 wealthy taxpayers (including 370 Quebecers) “succeeded” in not paying. Penny Their income is taxed at $250,000 or more.

We agree that this casts doubt on our tax system!

By “rich tax payer head”, we mean here those who have declared income of $250,000 or more. Revenue Canada counted a total of 373,110 Canadian taxpayers in this income bracket in 2020, including 65,380 Quebecers.

These “rich” represent only 1.26% of the total taxpayers.

Dividends

Another income category that the “wealthy” are very active in…is dividend income from taxable Canadian corporations. They collected 41% of the dividends paid to all Canadian taxpayers.

It should be noted that dividends benefit from favorable tax treatment as they are taxed at lower rates than income from interest, employment, pension benefits etc.

It says…

“Our” rich taxpayers of $250,000 or more should recognize that they are still paying a hefty tax bill.

Although they represent a small fraction (1.26%) of the 29.6 million Canadian taxpayers, they shoulder about 25% of the total federal tax bill. In 2020, they paid $42.4 billion in federal taxes out of a total of $170 billion.

In terms of total income, our “wealthy” declared a cool $202 billion (12.6% of total income), or an average per capita income of $541,395. It costs an average of $114,200 in federal taxes.

To this, we must add a provincial tax bill of course, at least $26 billion, or about $70,000 per taxpayer.

In short, on an average income of $541,395, our “richest” Canadian taxpayers paid an average of $184,200 in taxes for an effective tax rate of 34%.