none
2014-02-24 15:48:06 UTC
http://www.cbc.ca/news/business/taxes/how-tax-attitudes-change-over-
time-and-around-the-world-1.2510250
How tax attitudes change over time and around the world.
Canada once saw itself as the lower-tax alternative to the U.S.
By Sean Davidson, CBC News. Feb 24, 2014
If they happen to be from Saudi Arabia, there is a good chance new
arrivals to Canada will be surprised by: a) the nightmarish winters, b)
that any non-starving biped would willingly eat poutine and, perhaps
most of all, c) income tax.
They don't have income tax in Saudi Arabia or in Qatar, the United
Arab Emirates, Kuwait, Bahrain or Brunei Darussalam. No need, since the
streets are paved with petrodollars.
So, the concept comes as "more than a bit of shock" to any well-heeled
ex-patriates, says Abraham Iqbal, who lectures on management and
accounting at the Mississauga campus of the University of Toronto.
"When they come to Canada and are taxed on their worldwide income
that's something completely different for them," he said.
True, almost nobody likes tax. If you're a politician, just try saying
the word out loud without immediately adding "cuts" and see how well
you do at the polls.
Unless, that is, you happen to be running for office in France, a
country known for both its high individual tax rate and "tax morale"
the phrase economists use for the general level of willingness among
taxpayers to play by the rules.
High taxes, high tolerance
The French have one of the largest tax burdens in the entire eurozone
(the top marginal rate was 45 per cent in 2013, compared to an EU
average of 37.8) and in 2012 cheerfully elected the Socialist President
François Hollande on a promise of notching it up even higher at least
for those at the higher end of the income spectrum.
'We appreciate that taxes help put out our fires, keep our schools
clean and safe.'
- Abraham Iqbal, lecturer, University of Toronto
Last year, Hollande's government succeeded in gaining approval for the
so-called millionaire's tax that Hollande had championed in the
election campaign. The new tax will apply to companies not
individuals as originally planned and amounts to a 50 per cent levy
on any salary amounts above one million euros, or about $1.4 million, a
year. When taken together with companies' social benefit contributions,
the total tax rate will be about 75 per cent.
Had it been applied to individuals as originally intended, the 75 per
cent tax would have outdone even the famously tax-happy Swedes, who pay
close to 60 per cent in personal income taxes to fund their cradle-to-
grave social programs, one of the highest tax rates in the world.
***************************************
Global tax rates* 2013
Canada (federal only) 29%
China 45%
France 45%
Hong Kong 15%
India 33.99%
Israel 50%
Japan 50.84%
Russia 13%
Sweden 56.6%
U.K. 45%
U.S. 39.6%
Zimbabwe 46.35%
Source: KPMG (*All rates are the top marginal rate and do not include
state or provincial taxes.)
*********************************************
France's "fast trains, first-rate hospitals and public crèches
(daycares) do not come for nothing," noted a 2013 piece in the
Economist. The French, the weekly magazine said, are "the first to
defend a way of life subsidised by the public purse that can often only
be bought privately in Britain or America."
Programs like those help make taxes more palatable in Canada, too.
In contrast to Americans and taxpayers in some other parts of the
world, Canadians are "generally more aware of where tax dollars are
going," says Iqbal.
"We appreciate that taxes help put out our fires, keep our schools
clean and safe, keep our streets safe, keep our level of social
standing where it is, and our health care."
Other factors also cast the taxman in a rosier light. According to a
2013 report from the Organization for Economic Co-operation and
Development, tax morale tends to be higher among women, the educated,
the religious, older people and full-time employees, who are more
likely to have tax taken straight from their paycheques.
Trust in and satisfaction with the principles of democracy, with the
government in general, and specifically with any health and education
services it provides also help build up people's tolerance for the
taxman.
Real or perceived inequality and government corruption will drag tax
morale down.
"When people see the government taking steps to lessen the gap [between
rich and poor], it puts more trust in the government and people are
more open to paying taxes," said Iqbal.
Unless one happens to be rich, that is. Actor Gérard Depardieu left
France in a huff over Hollande's plans to redistribute the wealth and,
ironically, found greener and less-socialist pastures in Russia.
Changes in Canada
Canadians are often thought to be more tolerant of taxes than
Americans, but it wasn't always so.
********************************
Who pays the most?
Individuals in Sweden, Denmark and Aruba have the highest income taxes
in the world, according to global data compiled by the accounting firm
KPMG. People in the top income brackets in those countries paid tax
rates of between 55 (Denmark) and 59 per cent (Aruba) in 2013. The
global average for the top marginal tax rate that year was 32 per cent.
In Canada, individuals in the top income bracket paid 29 per cent to
Ottawa, plus another 10 to 21 per cent in provincial tax.
The lowest tax rates, among countries with income taxes, are in
Kazakhstan (10 per cent), Bulgaria (10 per cent), Belarus (12 per cent)
and Macau (12 per cent).
Low taxes were a point of pride among pre-Confederation Canadians, says
Mark Milke, a senior fellow at the Fraser Institute and author of Tax
Me I'm Canadian.
**************************
Some argued against joining Confederation because the new nation would
take too big of a cut out of their income.
George Beer, a P.E.I. politician at the time, once complained that a
united Canada would, "graciously allow us to expend about one half of
our earnings but will exact from us the other half, to be expended a
thousand miles away."
Early Canadians saw themselves as "more free" than Americans in part
because of their lower taxes, says Milke.
"There were arguments, in early Confederation debates, about making
sure taxes did not exceed the levels of the U.S, because of the
necessity to attract and retain immigrants," he said.
10 celebrities who tried to dodge the taxman
Millionaires, billionaires and Buffett: Paying enough taxes?
Canadians OK with higher taxes to fight inequality
That line of thinking persisted into the 1950s and 60s when post-war
confidence over-confidence in Milke's view saw governments on both
sides of the border take on new and more challenging problems, raising
taxes to help pay for these efforts.
"People believed that governments could organize to do just about
anything," says Milke.
In Canada, universal health care was established. In the U.S.,
governments declared war on poverty.
It helped establish the notion, among Canadians, "that taxes equal
compassion," says Milke.
"And who doesn't like to think of themselves as compassionate?"
Will the 'tax the rich' plan scare them away?
http://www.cbc.ca/news/canada/will-the-tax-the-rich-plan-scare-them-
away-1.1164620
Should Canadian millionaires pay more taxes?
http://www.cbc.ca/news/business/should-canadian-millionaires-pay-more-
taxes-1.1106636
Watch: Obama on rich tax
http://www.cbc.ca/player/Embedded-Only/News/ID/2221747138/
time-and-around-the-world-1.2510250
How tax attitudes change over time and around the world.
Canada once saw itself as the lower-tax alternative to the U.S.
By Sean Davidson, CBC News. Feb 24, 2014
If they happen to be from Saudi Arabia, there is a good chance new
arrivals to Canada will be surprised by: a) the nightmarish winters, b)
that any non-starving biped would willingly eat poutine and, perhaps
most of all, c) income tax.
They don't have income tax in Saudi Arabia or in Qatar, the United
Arab Emirates, Kuwait, Bahrain or Brunei Darussalam. No need, since the
streets are paved with petrodollars.
So, the concept comes as "more than a bit of shock" to any well-heeled
ex-patriates, says Abraham Iqbal, who lectures on management and
accounting at the Mississauga campus of the University of Toronto.
"When they come to Canada and are taxed on their worldwide income
that's something completely different for them," he said.
True, almost nobody likes tax. If you're a politician, just try saying
the word out loud without immediately adding "cuts" and see how well
you do at the polls.
Unless, that is, you happen to be running for office in France, a
country known for both its high individual tax rate and "tax morale"
the phrase economists use for the general level of willingness among
taxpayers to play by the rules.
High taxes, high tolerance
The French have one of the largest tax burdens in the entire eurozone
(the top marginal rate was 45 per cent in 2013, compared to an EU
average of 37.8) and in 2012 cheerfully elected the Socialist President
François Hollande on a promise of notching it up even higher at least
for those at the higher end of the income spectrum.
'We appreciate that taxes help put out our fires, keep our schools
clean and safe.'
- Abraham Iqbal, lecturer, University of Toronto
Last year, Hollande's government succeeded in gaining approval for the
so-called millionaire's tax that Hollande had championed in the
election campaign. The new tax will apply to companies not
individuals as originally planned and amounts to a 50 per cent levy
on any salary amounts above one million euros, or about $1.4 million, a
year. When taken together with companies' social benefit contributions,
the total tax rate will be about 75 per cent.
Had it been applied to individuals as originally intended, the 75 per
cent tax would have outdone even the famously tax-happy Swedes, who pay
close to 60 per cent in personal income taxes to fund their cradle-to-
grave social programs, one of the highest tax rates in the world.
***************************************
Global tax rates* 2013
Canada (federal only) 29%
China 45%
France 45%
Hong Kong 15%
India 33.99%
Israel 50%
Japan 50.84%
Russia 13%
Sweden 56.6%
U.K. 45%
U.S. 39.6%
Zimbabwe 46.35%
Source: KPMG (*All rates are the top marginal rate and do not include
state or provincial taxes.)
*********************************************
France's "fast trains, first-rate hospitals and public crèches
(daycares) do not come for nothing," noted a 2013 piece in the
Economist. The French, the weekly magazine said, are "the first to
defend a way of life subsidised by the public purse that can often only
be bought privately in Britain or America."
Programs like those help make taxes more palatable in Canada, too.
In contrast to Americans and taxpayers in some other parts of the
world, Canadians are "generally more aware of where tax dollars are
going," says Iqbal.
"We appreciate that taxes help put out our fires, keep our schools
clean and safe, keep our streets safe, keep our level of social
standing where it is, and our health care."
Other factors also cast the taxman in a rosier light. According to a
2013 report from the Organization for Economic Co-operation and
Development, tax morale tends to be higher among women, the educated,
the religious, older people and full-time employees, who are more
likely to have tax taken straight from their paycheques.
Trust in and satisfaction with the principles of democracy, with the
government in general, and specifically with any health and education
services it provides also help build up people's tolerance for the
taxman.
Real or perceived inequality and government corruption will drag tax
morale down.
"When people see the government taking steps to lessen the gap [between
rich and poor], it puts more trust in the government and people are
more open to paying taxes," said Iqbal.
Unless one happens to be rich, that is. Actor Gérard Depardieu left
France in a huff over Hollande's plans to redistribute the wealth and,
ironically, found greener and less-socialist pastures in Russia.
Changes in Canada
Canadians are often thought to be more tolerant of taxes than
Americans, but it wasn't always so.
********************************
Who pays the most?
Individuals in Sweden, Denmark and Aruba have the highest income taxes
in the world, according to global data compiled by the accounting firm
KPMG. People in the top income brackets in those countries paid tax
rates of between 55 (Denmark) and 59 per cent (Aruba) in 2013. The
global average for the top marginal tax rate that year was 32 per cent.
In Canada, individuals in the top income bracket paid 29 per cent to
Ottawa, plus another 10 to 21 per cent in provincial tax.
The lowest tax rates, among countries with income taxes, are in
Kazakhstan (10 per cent), Bulgaria (10 per cent), Belarus (12 per cent)
and Macau (12 per cent).
Low taxes were a point of pride among pre-Confederation Canadians, says
Mark Milke, a senior fellow at the Fraser Institute and author of Tax
Me I'm Canadian.
**************************
Some argued against joining Confederation because the new nation would
take too big of a cut out of their income.
George Beer, a P.E.I. politician at the time, once complained that a
united Canada would, "graciously allow us to expend about one half of
our earnings but will exact from us the other half, to be expended a
thousand miles away."
Early Canadians saw themselves as "more free" than Americans in part
because of their lower taxes, says Milke.
"There were arguments, in early Confederation debates, about making
sure taxes did not exceed the levels of the U.S, because of the
necessity to attract and retain immigrants," he said.
10 celebrities who tried to dodge the taxman
Millionaires, billionaires and Buffett: Paying enough taxes?
Canadians OK with higher taxes to fight inequality
That line of thinking persisted into the 1950s and 60s when post-war
confidence over-confidence in Milke's view saw governments on both
sides of the border take on new and more challenging problems, raising
taxes to help pay for these efforts.
"People believed that governments could organize to do just about
anything," says Milke.
In Canada, universal health care was established. In the U.S.,
governments declared war on poverty.
It helped establish the notion, among Canadians, "that taxes equal
compassion," says Milke.
"And who doesn't like to think of themselves as compassionate?"
Will the 'tax the rich' plan scare them away?
http://www.cbc.ca/news/canada/will-the-tax-the-rich-plan-scare-them-
away-1.1164620
Should Canadian millionaires pay more taxes?
http://www.cbc.ca/news/business/should-canadian-millionaires-pay-more-
taxes-1.1106636
Watch: Obama on rich tax
http://www.cbc.ca/player/Embedded-Only/News/ID/2221747138/