How Much Income Tax Could Canada’s Top 1% Pay?, by internationally respected CCPA Research Associate Lars Osberg, shows Canada’s richest now pay a lower tax rate than in the 1990s even though their share of total income has increased dramatically.
The study, released in the wake of a federal election that handed the Liberals a majority government, concludes there is plenty of room for the new government to make good on its election promise to raise the top marginal income tax rate on those earning $200,000 or more to 33%. In fact, the findings suggest there is room to do more higher up the income scale.
The findings find that a new 65% marginal tax rate for top earners could yield between $15.8 billion and $19.3 billion in additional tax revenue. To put these revenue gains in context, in 2012-2013 the total tuition revenue of Canada’s colleges and universities was $8.1 billion and federal infrastructure spending was $5 billion.
The paper finds scant evidence that higher top tax rates would prompt a rush of “job creators” or “the best and brightest” to emigrate. Tax law could also be amended to deter tax avoidance and tax evasion, as well as implement tax on capital gains.