![]() ![]() Meanwhile, nobody who pays their share understands a bit of it. The rich still get richer, they still don't pay their portion, and everyone else is still left holding the bag. I fail to see the logic in sustaining a system bloated with bureaucracy and riddled with loopholes, all built to serve those with the power to influence the policies, and merely divert the general public. The cons mentioned are presented under the assumption that the rich and super rich actually do end up paying what the brackets would indicate. Using our previous example, because of the doctor’s higher annual income, the doctor will have to pay more taxes than the retail worker based on Canada’s federal tax rates of 2022.A flat tax, or something using the flat rate as its base, just makes sense. Canada has a progressive income tax system therefore, high-income taxpayers pay a progressively higher percentage of tax than low-income taxpayers. Progressive taxes increase based on your taxable income. Progressive taxes are the opposite of regressive taxes. The GST is 0.17% of the retail worker’s income The GST is 0.03% of the doctor’s income This is known as a regressive tax because it has a larger percentage impact on lower income individuals. Although the $50 GST amount is the same for both the doctor and the retail worker it is a higher percentage of the retail workers overall income. They both purchase a laptop for $1,000, and are charged $50 GST ($1,000 X 5%). For example, say a doctor earns $175,000 annually and a retail worker earns $30,000 annually. A regressive tax system affects low-income taxpayers more than high-income taxpayers because it takes a higher percentage of their earnings.Ī great example of a regressive tax is the 5% Goods and Services Tax (GST). Regressive taxes are applied uniformly, and they do not change based on an individual’s level of income. ![]() ![]() 3 Describe the differences between a regressive, progressive and flat tax. ![]()
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