How Much Income Tax Could Canada's Top 1% Pay?

October 29, 2015
840.17 KB50 pages

How much more could Canada's richest 1% be paying in income tax? This study concludes that there is more than enough scope for the federal government to raise the top marginal income tax rate on those earning $200,000 or more to 33%. In fact, during Canada’s high growth years between 1940 and 1980, the top marginal income tax rate was well over 70%.

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.