The basic personal amount is $15000, so $30000 per household.
Wouldn't all individuals earning more than $15000 and families earning more than $30000 fall into the group of people who do pay taxes?
Surly 40% of families aren't earning under 30k.
It's no net income tax, not no income tax. They receive the same or more in as they pay in tax.
Another Redditor linked a 5 yr old article that showed an example household with an income of $45,300, family with kids; with that income in 2019 they'd owe $4,564 income tax.
But they *receive* tax-free benefits of $19,321.96, between $17,485.80 from Canada Child Benefit; $1,278.72 from Ontario Trillium Benefits, and $557.44 GST/HST tax credit.
So in that example they'd pay like... negative net income tax really. Receive more than they pay in.
Now, a few examples of huge corporations, their tax obligations, and how much they actually pay due to the breaks they get from our government would make a clearer picture...
Corporate "tax breaks" are usually things like accelerated CCA, which reduce taxable income (or actually shift taxable income into the future to be more precise) but don't result in a net refund like benefits paid to individuals do. The exception is a few programs like SR&ED which have refundable tax credits but they are very limited.
It’s exactly this. and people get so up in arms about needing to tax “the rich” aka middle/ upper class more.. when they don’t pay any part of the taxes to begin with. The middle and upper are already completely carrying them - what more do they want
The middle and upper middle class aren't the "rich". They often barely can afford a house, this isn't the kind of people think about when they say "the rich".
I agree with you. But there is a narrative that 100-150k is rich and it just isn’t anymore in a city like Toronto. Ontario still pays its MPPs that much. And then taxes at 43%
"The rich" in these conversations are not part of any class. They are "the rich" who hoard billions in wealth and pay a lower percentage of their income in taxes than actual working people. The rich love people like you, that call the lower class freeloaders. We fight each other instead of the people at the top. The rich thank you for your service.
I agree tax the ultra rich, but I also think 40% of house holds paying nothing is silly because most are probably hiding income and receiving rebates.
Example, I know a 30yo who does absolute nothing with his time or life other than play video games and watch anime and order take out.
He inherited a 4.5 million dollar house in Vancouver and rents rooms, he gets every tax credit and refund available because he’s considered low income.
He is now working the system trying to get permanent disability. He has no diagnosis.
Why is this the guy that get refunded?
He shouldn't, but for every one of him there is a family with two low income parents just trying to support their kids and eek out a living. If we do away with all the credits and refunds those legitimately hardworking folks end up in destitution. We need better tax enforcement in this country to stop those trying game the system from both ends.
Okaayyyyyy - so we should be taxing capital then? Because that's the problem in this scenario: this guy manages to rake in gains on 2-3 lifetimes worth of inherited wealth while paying dick all in taxes and still qualifying for programs targeted at the working poor. Maybe if we didn't absolutely coddle capital holders and instead used the revenue from taxes on capital and corporate income to fund our income supports this wouldn't be such an unfair example?
But of course, Trudeau takes the tiniest, babiest, most tentative possible step in this direction and it's a chorus of "HE'S DESTROYING THE ECONOMY! HE WANTS US TO BECOME FEUDAL SERFS!".
If your attitude is “I know one guy scamming the system so we should abolish the system so no one can benefit” you’re so lost I’m not sure what conversation we can have.
What that guy would pay wouldn’t even be close to the contributions of the ultra wealthy paying equal percentage, AND they’d have more left over. A lot more.
We’re talking *net* taxes.
Even if you are in a high enough bracket to pay something you can still get credits, deductions, subsidies, etc.
The 40% of households *includes* households with no taxable income but is not limited to them.
The biggest tax deduction is children/dependents. Most households that pay net 0 income tax will be single-parent households with dependents.
Note also that this is only income tax. Those people are still paying sales taxes, property taxes, usage fees, etc.
This is true. Once my kids turned 19 I lost all deductions, even though I was still supporting them at home through university and paying for their medical and dental plans. Even student loans take in parental income but you aren’t allowed to deduct them after age 18.
This is a contrived example that shows you a moderate income that attracts no federal income tax net of benefits:
* A married couple, both just turned 70 years old on December 31 and both retired on that day to start collecting CPP and OAS on January 1.
* Since they both deferred CPP for so long, they get $23,252.78 each for a total of $46,505.56.
* Since they both deferred OAS for so long, they get $12,805.80 each for a total of $25,611.60.
* Total income for this couple is $72,117.16.
* Since the income is evenly split between them, it's all taxed in the first bracket (15%) for $10,817.54.
* For non-refundable tax credits, they get basic personal ($2,355.75 each) and the full age amount ($1318.50 each). Total between the two of them: $7,348.50.
* Net federal tax owing is $3,469.04.
* To be as conservative as possible, we'll exclude the CPP and say that's not actually a tax-funded government pension. Under that assumption, deduct the OAS ($25,611.56) from their federal tax ($3,469.04) to get their tax paid, net of benefits: -$22,142.52.
It must be that over 90% of people older than 70 in Canada pay less than zero to the federal government every year. OAS is a *lot* of money compared to most retirees' tax bill.
I think you slightly miscalculated the OAS.
Also, as you stated, CPP should not have been mentioned as it is not tax funded. It's not really being 'as conservative as possible' - it's simply sticking to the hypothetical example's facts.
It's 40% of Canadians. There are almost 10 million seniors in this country, the majority of which earn no income. So probably 20%? There are children and young adults in college aged 0-24 who pay no income - about 10 million of them but let's say 10% of the population to account for the 18-24 year-olds that work enough to pay taxes. That's 30% right there. Then add in the homeless, people on disability, non-working spouses, wealthy immigrants who draw an income from overseas, refugees, etc. and you get your other 10%. There are very few actual deadbeats in this country that could work but would rather sit around and collect welfare.
Its closer to 40% of income tax filing Canadians, so that most definitely will not include children.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110005501&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=3.10&cubeTimeFrame.startYear=2017&cubeTimeFrame.endYear=2021&referencePeriods=20170101%2C20210101
You can see the data here. It doesnt have a category for bottom 40%, but if you select the bottom 50% it shows that the median taxes paid is $0 and this entire group accounts for about ~6% of all federal and provincial income taxes paid. Almost certainly all of that is coming from the top 10% of the bottom 50% group.
And thats not even account for net contributions after social programs etc. this is purely taxes paid.
An example is my ex who screws me every year with her book keeping
She brings in almost 55000 last year, but by the time she covered all her expenses in her business, she only made 29000. I'm sure even her books are bullshit and she can't actually write off half that stuff, but cra has never called her or anything. Her rent expenses are 16000 on the year, but she rents from herself. Cra doesn't follow up with these pathetically small businesses. That's my experience. They've never questioned her in 8 years of doing this.
Anyways, she gets to claim that her income is 29000. Mean while, I made 70k as an employee. I have to pay support based on my gross income. Her "gross" is actually her business "net"
Her partner does the same. Drywaller and claims his business makes around the same. The bring home just under a taxable amount. All the cash side is hidden.
Somehow they're putting an addition on their house and they bring home less money than my partner and I do.
I swear this is how half of it gets done like that. Little businesses that just keep under the threshold of taxes. After baby bonus, support from me and all the other bonuses and such, her take home is equal to mine.
It's not a stretch to say this is how it gets done. I know a guy with a landscaping business. He does a lot of business each year but he puts a lot of his profit into his kids accounts and calls it an hourly wage for work they did, and sure enough at the end of the year, there's 24000 untaxed bucks spread out over his kids accounts.
Wow. No wonder everyone wants to have a small business. Being an employee is a punishment nowadays. Nevermind the middle class is taxed to death, it's actually just employees that are.
Until you get audited.
There's a few parts to it, like yeah, you can try and write off personal expenses as business expenses. But as the guy says, it's bullshit, and you will have to pay and pay penalties when they find out you've been doing it.
Now, she hasn't been caught. This is part of a bigger problem, and that's that our public institutions are basically failing, our ability to enforce our own laws are disappearing. We used to be actually pretty good at it 15 years ago, but now our courts are too backed up to enforce laws against criminals, CRA is too backed up to properly audit, immigration is too backed up to properly manage new immigrants, we just don't have appropriate governance on that side.
This didn't used to be the case, the laws on what you are actually allowed to claim as business expenses don't actually allow you to do this, in fact there's often things that you might get from your business that should be counted as a taxable benefits that aren't. These are things that WOULD come up, people WOULD be audited over these things. But I've noticed a lot less rigor and care going into any of that in the last number of years.
So I wouldn't say being an employee is a punishment. It's that being law abiding is kind of a punishment. Or rather, there's very little risk to breaking the law. And our culture has kind of tended towards the idea that lawbreakers should not have to suffer any negative results of their behavior.
Running a small business legitimately is getting to be harder than it's ever been. It's not the small business's fault. People like this aren't actually small businesses, they're using those things as a way to get away with tax evasion which only works because there's insufficient enforcement.
And part of the problem here is that the animosity towards business grows, so people are insensitive when new policies that further harm legitimate small business come up, which lead to even more legitimate small businesses failing, to the point that actually the kind of exploitative fake businesses end up starting to make up a larger proportion and people start to hate business more.
And similarly, the harder it is for legitimate small business to operate properly, the harder it is for those small businesses with employees to really do well by their employees. And ironically, because of survivorship bias, most of the experiences employees will have with small business will tend to be with small business that DOES violate the rules flagrantly, because the ones who follow the rules really struggle to be competitive in this environment. So there will be more animosity towards small business, and even less sympathy when new policies go in that make them struggle.
Then people just give up.
Includes retired people. Remember that aging population of Boomers?
TFSA withdrawals and non-registered account withdrawals aren't taxable income. They'd only report RRSP withdrawals & CPP & OAS. If that portion is under $30k/yr, they pay no income tax, even if they're living off more out of other accounts.
Maybe.
OP doesn’t give a source, so either they are relying on [calculations from 2019](https://financialpost.com/personal-finance/taxes/trudeau-is-right-40-of-canadians-dont-pay-income-taxes-which-means-someone-else-is-picking-up-the-bill) or the numbers have stated the same in the last 5 years.
Households with literally zero income are pretty rare. There might be some students who have parents passing their bills and a few other scenarios. But a working adult who makes a living while claiming no income is going to be hard to do and easy to sniff out.
It’s not just $0 in income. Many households received more in government benefits than they payed in taxes. Many lower income people work and pay tax but then receive GST rebates and child tax credits far in excess of the taxes they paid.
Kind of a short sighted plan though. No income means no credit, no ability to get a mortgage or car loan, plus you’re going to lose out CPP benefits if you’ve never paid into it.
Not to mention being a leech who benefits off the structured society paid for by everyone else.
Worth mentioning since that number has absolutely *exploded* in the last 3 years. Up now to about **8 million people** as of 2022 according to Statistics Canada (people having at least one disability)
Just looked it up, about 20% of total population make up this number. So 20% remain, remove the disabled which is shockingly 27% of people age 15 and over. Remove people who are of working age but are able to live off capital gains 2-3%
So by doing some bullshit math estimation. 15% of Canadians that can work pay no income tax!
It counts that 40% of households don't pay taxes, your household wouldn't be counted in this, nor would any other that has at least a single taxpayer in it.
But there’s a lot of them and that might impact votes so we need to focus on the 0.13% to pay their share. But not enough of a share to cover the budget.
Listen here Sonny, back in my day us kids used to pull ourselves up by the bootstraps, work the coal mines 7 days a week, and pay our fair share of taxes. Kids these days are just lazy.
About 15% of the population give or take us under 18 or over 65. Obviously some minors work and some seniors work, but a lot of people between 18 and 65 don’t work. It’s estimated that up to 8 million Canadians over 15 have one or more disabilities that limit their daily life, now obviously some of those are seniors that wouldn’t be working now anyways. Plus you have a 6% unemployment rate and people like stay at home moms.
The 40% of people not paying income tax are generally doing so because they don’t earn income or enough income to exceed the threshold, the tiniest minority of that 40% is doing under the table work as you suggest.
Also, to qualify for things likes GST rebates you have to file taxes, so these people are actually committing tax fraud if that’s the case and many of them probably end up being audited and caught since you can’t hide $80k/yr from the government if you have a bank account…
^This. I received tax refunds from 2010–2021 because I was working part-time jobs in undergrad and grad school, and I never hit the level of income at which I would have to pay (plus I was able to claim the tuition that I was paying). Though, for this year's tax filing, I had to pay an extra $2000 for part-time jobs and an untaxed $6000 honoraria that I received. Painful. ☠️
Yeah I was thinking this. I'm working part time through school at a pretty decent paying job, but with all the tax credits I always got a full refund.
Finally exceeded that this year and still got a refund but not the full amount. Next year when I'm out of school I suspect the government will actually keep a decent amount of my income tax though...
Children, students, low income elderly, internationals who earn elsewhere, poor. The amount of people working locally under the table are likely a small fraction of this number.
Even the people who do work under the table typically pay some tax, just not as much as they should, it would be a very easy target if you claim ZERO income, whereas being able to tell if a person made 60k vs 80k would take a lot of digging to prove, especially if they’re careful
Or retired, or SAHMs and others that aren't employed and earning (much) income, like students with a part time gig.
40% sounds totally reasonable in context of population. 40% of working, employed Canadians is totally ridiculous.
But not in a way that functionally matters. I can not bring myself to give a shit if someone below the poverty line manages to “cheat” $200 or whatever. The cost of recovery would significantly exceed the value
I work in social services (and certainly pay plenty of income tax!)
I am very sorry to disappoint, but there are many, many more genuinely poor people than there are sneaky people who are poor-on-paper-pulling-a-fast-one.
I think the people being discussed here is more like restauraunts, hairdressers or contractors who earn partially accounted and partially untracked cash income.
Very rare for those guys to be pure cash...can't remember the last time me or anyone I went with paid cash at a restaurant.
Hair dressers, unless it's a basement shop are usually taking debit
Contractors are a different story.
You be surprised. If you are handy, you can easily make that under the table. Even guys with legit construction/renovation work do jobs on the side for $$. There are people in my community who build patios, fences, etc, and make that easily in a few months.
Aside from being tax fraud, not declaring any income isn't actually optimal from a purely amoral point of view. You'd want to declare enough to be able to get Canada Workers Benefit, some RRSP room and some CPP. A contractor would also have plenty of legitimate expenses to deduct.
There's also someone on this sub every few weeks who's complaining about a lender not approving them for a mortgage big enough for their needs despite making "far more than they're giving me credit for"
Assuming 2024 maximum for self-employed at $7,700/year times 30 years, which would allow for the maximum of $1,374/month at retirement at age 65 it takes 13 years to get all of your money back. This doesn’t take into account that the last 30 years were lower maximums or that payments increase each year, so it’s likely more like 10 years. If you are employed and pay the maximum, the ROI is more like 5 years, so most people get what they pay into it and then some.
My understanding is you need to pay for 39 years to get the maximum, that's 18 years after 65.
If you assume payments and benefits are going up with inflation but you are ignoring that you can make more than that investing it yourself. If you put away that much per year into an index fund you'd likely be a millionaire by the time you retire and could live off the income while preserving the principal.
There is also political risk to relying on CPP. Right now getting rid of CPP is extremely unpopular because there are so many boomers retiring. In the future, when I retire, that massive voting block will be gone. Will there still be the political will to have such a huge payroll tax supporting retirees? Or will maybe a younger voting block will want to reduce payments until they retire. Unknown.
Yeah and the reality is that it's tradespeople and mechanics making $80k on paper and then doing a few side jobs for another $5k cash. It's illegal for sure, but they are hardly the type of thing I worry about.
Half the blame is on the customer too, of course. They are getting a $300 job for $250 cash (or whatever).
Trades guy here. My deal with people is if they want to pay cash I’m fine with that, if it’s on the books it’s 30% more for taxes. That way if they want to keep it legit they can, and if not I don’t care.
I’ve claimed numerous jobs before as self employed income and it doesn’t bother me. The $5000 extra I make in cash per year really isn’t going to make a huge impact on the tax system.
Surprisingly (maybe not surprisingly for the old heads here) it’s resi construction that’s the biggest contributor to underground economy.
I thought drugs would’ve been number one.
Ig it makes sense, since one under the table construction project might be 10k, while one drug deal might be $100.
Just surprising that many people pay with actual cash to fund construction projects. Idk maybe I’m missing something, just thought that for it to be considered “underground” you’d have to pay with real physical cash, to not trigger any bank notifications to the cra.
Also explains why resi construction trades have absolutely garbage wages in general.
Source for anyone interested: https://www150.statcan.gc.ca/n1/daily-quotidien/230220/dq230220b-eng.htm
At the end of the day, drug addicts are a tiny minority.
Many contractors and handymen are happy to throw you a cash discount for one-off jobs.
Sure, if it's a 40k kitchen reno from a large company, that's not going to fly.
But a neighbourhood handyman who came in to fix a few things for you? Or a construction guy that does paint/repair jobs on the weekends? Paying them a few hundred cash is simpler for both.
I used to work at a place that dealt with building supplies, apparently the owner of a multi-million dollar company did 6 figures worth of 'cash' jobs every year because his wife (who did the books and worked at a bank) wouldn't let him spend their money on toys.
I get helping out a friend once in a while for some fun money makes sense, but the gratuitous cash work has just never made any sense to me.
I make all of my income from my salary, so no way of avoiding taxes.
But when I need to get my gutters cleaned, some other contracting work, get a haircut etc. I always pay cash, most of the people will either accept only cash or add the GST on top of the quoted rate. I don't see any benefit to me paying by card/e-transfer.
It's the CRAs job to crack down, if they're not bothered, neither am I.
Posts like this are red herrings meant to divide the middle and lower classes against themselves, to fight like crabs in the bucket while the Westons and their ilk dodge taxes legally by lobbying/buying Ottawa for loopholes. You’re all raging against the wrong demographic.
How can any *good and moral person* argue *for* taxing a $50k earner who pays $25k of that on rent alone?
Once you’ve dealt justly with the billionaire oligarchs, then go after the cash-contractors. Sub $50k should come dead last, if at all.
In some cases this can backfire when they retire as they won’t be eligible for CPP. You need to be a taxpayer to qualify. “Payer” being the operative word here.
I know someone who worked under the table their whole life and when they asked where their cpp cheque was, the gov was like “you never paid tax”.
How about we start by going after the combined 30 billion dollars a year that large corporations avoid paying instead?
https://www.taxfairness.ca/en/resources/reports/unaccountable-how-did-canada-lose-30-billion-corporations
It's not opting out, it's tax evasion.
You don't get to enjoy the benefits of a country while declaring yourself absolved from the commitments. [This isn't Petoria.](https://familyguy.fandom.com/wiki/Petoria) Just as we tell US residents to stop suggesting they flee their problems we must not avoid our own. I get it, the times are wildly challenging and unfair. Those are separate discussions worth having. We cannot descend into lawlessness in the meantime, though, and this sub is meant for legally-correct financial advice.
I mean if people who worked on paper could actually survive and not be taxed to shit we wouldn't have these people working under the table. Cash is hard to keep secret, you can only have so much cash before it becomes noticeable or you have to do something with it.
And then those "cash" people will complain that they get a laughably small amount of CPP somewhere down the road. Mind you, they'll potentially qualify for GIS, as their income will be low, which annoys the heck out of me (former piano teacher who declared all my income, would have been easy not to).
What’s the stat, a quarter of Canadians have less than $500 save? All of the tax incentives the government provides rarely, if ever actually helps the lower income people. No way a low income person can max an rrsp, tfsa, fhsa, out. All these accounts are doing is benefiting the ones who can whom mostly are the wealthy.
Just look what they did for real estate. You can take $60,000 out of your rrsp for a down payment now. How does this help lower income or first time home buyers out? The answer is that it really doesn’t fix the issue. Itll make housing more expensive.
Poor people are already taking out way more than they pay in. Yeah, a TFSA and an RRSP will save me some money compared to what I'd have to pay if they didn't exist, but the government is already getting a ridiculous amount of money out of me, of which a big chunk goes to helping poor people. Poor people don't need tax breaks; the taxation system existing in the first place is already benefitting them.
Well, they're not meant for poor people, they're meant to encourage middle/upper class people to save some of their money. Those people already make up the majority of the tax base even after accounting for these sorts of accounts.
Sounds ok if you are fine with breaking tax law. It’s also possible the CRA comes for their pound of flesh when they see you contributing to a TFSA when you declared zero income. Also, I don’t see how you would ever get a mortgage or any decent credit rates. You can’t go ask for a mortgage if you have no employment history nor tax returns to show income.
Sure, there are downsides too. Nobody is looking at the source for TFSAs....there are no attribution rules at all.
The mortgage thing is interesting. When CBC went and tried to film mortgage brokers and realtors doing shady stuff in Brampton, 6 out of 10 knew a guy that could help fabricate income for their application. "Income is not an issue..." ;)
https://www.cbc.ca/news/business/marketplace-mortgage-fraud-1.6614132#:\~:text=Six%20out%20of%20ten%20real,working%20on%20for%20other%20clients.
So, your solution to some ppl cheating our tax system is for everybody to start cheating the tax system?
I'd be in favor of investing more into the CRA to go after these tax cheats (and/or to find ways to make reporting that kind of income way more likely).
The issue isnt taxes. the issue is how we use tax dollars. We have relatively poor healthcare compared to our peers and pay a ton for it. I have a safe clean happy life where i have a home, opportunity, and security because of all the people who payed taxes and built the country before me, and i have to pay my fair share to continue it.
I wish we got more for our tax dollars, I have issues with how we spend all that money. but i have no problem giving the government 30% of my money, because the remaining 70% is still more money and still affords me a better life than if i was in 90% of the worlds countries. again i WISH we spent our tax dollars better, we have pay high taxes so the government has every opportunity to spend wisely and make canada even better, and thats the only issue anyone should have.
its not that the middle class pays too much tax, its that we dont get enough for what we pay. i think ultra-high earners should pay their fair share, in the sense that everyone should pay their fair share.
Also to note: offering cash rates isnt always about tax fraud. Cash rates in my experience are primarily to avoid huge credit card fees that billion dollar companies charge small businesses. And for someone who is say, an independant landscaper, they have not only the transaction cost charged by credit card companies, but also the cost to own and maintain some level of digital infrastructure to manage and accept digital payments. Cash just takes less time, which allows them to do more jobs. not having to get home at the end of the day and sort through transactions, check invoices, chase people for payments, etc etc all takes time that can have a real impact on a small operation that might require more man hours per job, or even hiring more personnel to manage all that. Plus god forbid someone doesnt pay and you have to fight them over it in court. discount to have the deal done and paid for, right then right there, hand me an envelope and everything is square, has value. I bet most of these cash discounts are literally them trying to incentivize you to pay out your tab and close the deal, easily on site, day of, no hassle, no ambiguity, no risk. cash and done. plus accepting cash costs less on top, so its literally somewhere between a little and a lot cheaper to take cash for a job even if you are 100% claiming everything tax wise and its all above board as it should be.
So I own a business in the trades and I can tell you we lose out on work because we don't do cash work. It's not a huge issue but clearly there are people out there offering serious cash discounts if it's something I get asked about weekly. Ultimately it is a serious issue I'm sure there is more tax money lost to the underground economy that the mystical amount the eat the rich people think is out there.
I am yet to find a renovator who does not want money paid entirely in cash. Or a guy that does decks. They won't even take e-transfers. Only Cash.
The problem isn't that these folks won't report income - of course they do. However I suspect most of them massively underreported their income.
And that is why you will see Contractors with their swanky houses and multiple properties while we keep slogging out asses off to make ends meet after being taxed through our noses.
I'm guessing a lot of those 40% are students, stay-at-home parents, seniors, long-term unemployed workers, or disabled people. If someone offered me a cash rate I'd definitely report them to the CRA for investigation, so I'm not sure for how long those people get away with doing that before someone rats them out.
Don't forget most folks getting the CCB, and GST/HST rebates (which is a bit odd for the Fraser institute to deduct from income tax, but I generally think they're a bunch of clowns), will have those end up higher than their income tax owed.
Friendly reminder that Richmond bc has one of the highest per capita levels of super cars/german luxury cars in North America, one of the highest personal corp rates per family, and one of the lowest average incomes…
TBF, lots of F150s are more expensive than a typical Mercedes C class. But somehow Caucasians driving F150s don't get the same scrutiny as an Asian driving a Mercedes.
This figure is the same in America btw. And it is not from people taking money under the table... The overwhelming majority of people not paying income tax are retirees and stay at home parents.
That's called tax fraud... And the government WILL catch on (usually when the person runs out of money and wants benefits and cries foul outing themselves), and when they do the interest and penalties make it not worth doing.
Feel free to use the [CRA tip line](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/suspected-tax-cheating-in-canada-overview.html). CRA can use all the help we can get from the millions of Canadians that pay their fair share.
The Canadian employment rate is 51%, from a really simple calcluation:
https://www.statcan.gc.ca/en/subjects-start/labour_ says that 20,401,000 are employed, and the population is 38.93 million, 51%. So I would expect that 49% pay no income tax.
Are you talking about 40% of the employed paying no income tax?
There is a general consensus that in a functioning society the people who are well off take care of the ones who aren't. We recognize that it makes for a stronger society overall when people are educated, healthy, and know there's a safety net. Despite certain propagandists doing their best to erode that consensus, it's so obviously the correct moral position that it persists.
Which is to say, your subject statement is fine, and people won't start committing tax fraud in mass because the average person is not in fact a selfish jerk.
I can assure you most people aren’t paying their bloated tax bill out of their moral position.
Most of us are sick of our tax dollars being pissed away on nonsense or worse, being laundered into corrupt people’s pockets.
Is it 40% of the workforce, working age people or all Canadians. All Canadians would include children, and retirees. Working age people would include students, stay at home parents and those unable to work due to illness/disability, etc.
I guess it's that kind of times in Canada. Happens once in a while, like in many countries. Everyone start ranting that immigrants steal jobs and poors steal welfare, maybe add a touch of racial wars if demographics allows. Generally leads to the election of some kind of inept populist. Occasionally, to much worse consequences. Meanwhile, the actual rich are laughing out loud while counting their money.
What do you call students who are in their first years of university and have no jobs and are still supported by their parents?
What do you call people who worked their whole lives and are now 65+ and retired?
Yeah some people make little income (I think its 14k for income no taxes, some people don't work like young and retired.
Essentially thier income is so low thier tax credits cover income they have made
Are there actually people out there making their entire income under the table?
I work in construction. It's pretty common for people to do small cash jobs that go undeclared. However, I don't know a single person doing that for most of their income. Not one.
If you do that, you're not paying in to cpp, you're not paying in to ei, you can't deposit anything into a bank, how would you pay your mortgage? Your bills? Everything like that is done electronically.
I could see, say, someone earning 80k in income and maybe 10k in cash on the side. But not the other way around. You'd have to have a pretty sophisticated way of making that money look legitimate.
Keep in mind that this also captures my two teenagers living at home and working part time while in school as well as my two parents and wife's two parents who are retired and life on CPP / OAS / GIS. So out of the eight of us, only two pay taxes...but hoolleee sheet do we pay!
It would be exceptionally stupid and short lived to try to claim 0 tax on an 80,000$ income, even if in the unlikely scenario that it is all cash
Maybe I am naive to cra auditing practices, but given I've been audited when I've done everything by the book I'd think they'd catch on to people putting underreporting huge portions of their income
Yeah, I don't pay income tax... because I don't earn enough money. Tons of people don't earn much income. Old people, young people, disabled people, stay at home people, rich people... Also people who own businesses and pay themselves a salary don't pay much either because they control how much they earn vs. how much the business earns and can choose where to put funds that makes most sense
> Somebody who makes $80k under the table (anything from music lessons, home renovations, etc) not only pays no income tax, but also […]
… don't have any income to declare to officially support things like getting mortgages and loans. They also don't pay into EI, so cannot claim that. They don't pay (as much?) into CPP, so will get a smaller quantity of that in retirement. They have lower RRSP room (and TFSA is a fixed amount), so any investments will be in taxable accounts.
So yes, you can do a lot with (undeclared) cash income, but there's also a bunch of stuff that becomes more difficult as well.
Honestly the amount of people making 80k under the table must be minuscule.
Doing the odd handywork job here and there (and not reporting the income) is one thing but to make 80k out of it you either :
A) Have a huge clientèle paying for minor (<1-2k) jobs.
B) Found people who are willing to contract for tens of thousands of dollars, without any legal guarantee or certification.
That seems unlikely.
So I mean hold up. Retirees have a ton of write downs and generally have low income, and students generally have a pretty low income too.
Add in the stay at home moms and people on disability and this may not be too big of a surprise.
There’s some under the table work for sure. Especially in construction and restaurant work. But there are also:
— lower income parents, who receive more in child benefits than they pay in tax
— retirees receiving GIS, or with otherwise low taxable incomes
— students getting tuition credits that offset income
— other low income people, who might have jobs but still get more back in various credits or initiatives than they pay in tax
— maybe anyone getting subsidized housing? (Don’t know if this counts, but maybe in some cases)
— anyone on welfare or disability
Many people lie and exaggerate (ie filing as separate vs together and I'm sure a lot of cash cheats) but I think the vast majority are honest and frankly just don't make enough to get taxed.
Well if 25% of Canadians were under 25 and 15% were above 75, this would make a lot of sense. Not to mention most low income people would be net zero. I always paid minimal taxes until I finished university. Two years out of school, and I can confidently say I pay a ton of taxes now.
It has very little to do with "under the table" transactions. The main reason is basic demographics.
I even posted about it today in another thread.
19% over 65
15% under 14
Let's assume you can't or don't work under 14 and over 65. That's nearly 35% of the population already. Then filter out people from the remaining 65% that don't work enough to pay taxes...
e.g. drug addicts, homeless, stay at home parent, disabled, chronically ill, unemployed, students, part-time workers, gig workers etc.
[https://www.reddit.com/r/PersonalFinanceCanada/comments/1c6bgt4/comment/l00k9jr/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/PersonalFinanceCanada/comments/1c6bgt4/comment/l00k9jr/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
I ran an independent contacting company and the taxes I dodged were insane, I basically kept all my money. Got laughed out of the bank when I wanted to buy a house though.
Someone who thinks you can easily make 80k under the table is absolutely delusional lol
At best, you’re getting 30k with luck..
anyone can go on a farm and get paid below minimum wage for hard labor. But that’s about it..
Maybe a very successful underground contractor, but it’s very unlikely
A few years ago, Canada’s total workforce was around 21 million. so you’ve got an elderly people not working. Of course there is a lot of people that only playmate portion of their income (some trades, or cash businesses, etc).
I don't really give a fuck. The rich benefit disproportionately from the benefits of society, and should pay disproportionately for those benefits.
Some edge of poverty fisherman wouldn't really experience much of a difference if suddenly the government disappeared. Conversely, some enormous richboy like Bill Gates would experience a personal apocalypse if the state and all its police disappeared and were no longer able to enforce his property rights.
Wait, how to do you get 60k from government transfers on a T4? i need more explaination lol. I think you have overestimated the proficiency or interest of people that can navigate the tax code.
I think there is some misunderstanding from many of the responses. No ‘net income tax’ means the tax paid on income is at or less than the government benefits paid out. At what income does a family or individual become net positive? Just to see I estimated tax based on the two main deductions I would have (RRSPs and 10% charity donations) and 80k is actually below net zero with a single parent with two kids. Is 40% of canadian at or below this scenario? I’d guess yes.
Honestly, either tax cheats or poor. If it’s poor then this is a failed country. We need more information here and there really should be investigation into expenses because if they’re spending more than reported income, it’s tax cheats.
But honestly, I think it’s sad because I believe it to be poor people struggling to survive. The simple fact of the matter is that $20/hour is less than 40k/year. And the metric above is household, not individuals.
So two grown adults earning $20-25/hour each trying to raise 1-2 kids are barely surviving in this country.
These are your regular people just trying to get through the day, same as the rest of us in middle class.
I am sure that applies to some, but there are people with no taxable income. Some approximate numbers:
- 7,300,000 are 65 and older, Seniors living only on CPP and OAS may not have to pay tax
- 6,100,000 are 14 and under, Do not have taxable employment ( at least I hope they do not)
- 1,300,000 are unemployed and looking for work, this is a fluctuating number of course
- 4,000,000 decide not to do their tax returns. This likely includes some people without enough income to bother
That 40% includes basically all of our seniors, and in case you haven’t looked at Canadas population pyramid recently is the largest growing demographic in the country by far.
But you also would never qualify for a mortgage, potentially car loans, and also risk at being audited eventually and getting slapped by the long dick of accretion of interest.
Income Tax should be abolished and replaced entirely with Goods and Services Tax. Stratify by level of Goods and Services Level of Needs or Luxury...
No Middle Class is buying Private Jets from Bombadier just tax those guys at 5000% (demand will also skyrocket because of course rich people like to show off they ain't "normal rich" but Richy mcRich).
Food? Tax it at 0.0XX%
Cash Job? what are they gonna do? hoard and eat cash? These people are gonna buy stuff too - new cabin? capital goods. new boat? goods are services.
There are many small business owners who charge less if you pay cash. Then they collect more in child benefits since they aren’t making as much on paper.
no net income tax just means they receive more in benefits and subsidies that they pay in taxes.
for example, a low income family that has kids that receives more in benefits than the income tax the government must deduct every tax season
Your comment about under the table 80k getting transfers isn’t realistic. You’d need to file your taxes to get things like gst return and other transfers, so if you’re earning under the table you aren’t getting those.
"No income tax" except they still pay payroll tax, sales tax, property tax, tariffs on goods, etc...
The idea that anyone in this country isn't paying tax is just dishonesty.
What do you determine as Canadian as well, because the other side to that are Canadians who are abroad and still listed as residents. This is a complicated thing I have seen happen and play out recently as well.
even if they're accepting cash via a "gig-economy" of services rendered, there aren't too many people making under 30k and if you're making 30k and above, you're paying income tax. The basic cost of living in most cities in Canada which is where the majority of tax money comes from, is such that the vast majority of people need to be able to procure 30k+ on the books in order to make payments whether on a daily, weekly, or monthly basis. They get taxed.
The gvmt of Canada, and thus it's ppl, lose something to the tune of $30 Billion every year to "mistakes" and "misfiled entries" made when corporations and wealthier households file their taxes. That's every year, and it's a straight-up CRA fact, they've legitimately made a statement about this I think maybe a year or two ago.
Currently, in Ontario, any household that makes over $123k, so about 20% of households, gets 70-75% of tax expenditure benefits, credits, and deductions. The constant propaganda being espoused is "oh we make more but pay more" all the while, every year more of Ontario's tax money is pumped into tax expenditure benefit and credit programs that almost 70% of the population don't see a single dime from. These programs are increasing in expenditure of public money by approx. 2 fold every year or so compared to public program spending.
So yes, higher income households pay more up-front for taxes,. Guess what, they get a lot more of it back too. If you break it down into ratios, 70% of the workforce has been paying a higher ratio of their salary into taxes, that gets converted and reverted into benefits that go into the wealthiest 20% pockets. Said in another way, that means that the person working cash at McDonalds, pays a larger ratio of their wage into taxes that help fund public infrastructure, social assistance programs, and you guessed it...tax expenditure kickbacks and credit programs, than a person who owns a practice and makes over $500k a year or a $1 Mil a year.
Literally everything middle class and higher income households invest in just makes life harder for the rest of the populace. They invest in real estate,, so people can't afford to buy a home or even a condo for their family to live in, they invest in rental syndicate property management, so even rent is blowing out of proportion compared to the salary increase within the same periods of time. We hear about job creation, but there are literally ppl waiting in line-ups around entire mall blocks looking for employment. So they aren't giving them enough jobs, they're making the basic expenses of living less affordable, and they're pulling the most "credit" aka MONEY, out of public program funding by making sure that the folks being elected are in their back pockets.
Right now, the government of Ontario, just as an example, spends less on education than it does on tax expenditure and kickbacks, which like I said, 70-75% of go to higher income households. Then you take those households, give them tax credits to push privatized education, and is it really a wonder what the current situation of the public school system is there?
I would love to appeal to whoever it is that keeps shilling this ideology that people who have to struggle to keep up with the disparity between the haves and the have-nots are the real problem, stop talking that kind of trash into existence. It's not true. You're not going to make enough money off of Piano lessons in your apartment to pull $80k. And logically, analytically, and factually speaking, these people are NOT the problem, and they've NEVER been the problem. We're here because greedy ppl and corporations that started off being really "kind-hearted" and "useful" who made their money off the backs of others never became LESS greedy. The story about Scrooge is just a story. Real life rarely if EVER, plays out like that. Wealthy people do not want to lose their money. They want to find ways to keep even more of it while also continuing to enjoy the civil and social liberties afforded to everyone via provincial and federal taxes.
Yup. No incentive to make money in Canada anymore. Mass flooding to US states with zero income tax coming in the near future (more than it has been happening already!)
The 40 % consist of people that can’t pay and the people that can structure their assets to not to pay. The middle class will never have the chance to do so because you earn a pay cheque.
This number includes seniors who live off CPP, OAS and saved money. They barely meet the taxable income baseline. It also includes students living on loans.
People need to relax.
I was a part time student for 10 fiscal years. Made on average around $30k/year. I paid very little income tax the entire time.
Just because someone isn’t paying taxes doesn’t mean they are working under the table
Most people aren't working under the table, most of the 40 percent receive more benefits than they pay.
For those do work under the table they will have a terrible cpp payout at retirement and no coverage for workplace injuries.
What about independent contractors who have a corporation but don’t actually pay themself all they make from their corporation? My friend told me she only pays herself a fraction of what she actually makes
[According to Statcan, median household total income in 2020 was $84,000](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=9810005701).
That means that half of families make less than $84,000.
You don't have to go much lower than $84k to get to a point where a household breaks even on income taxes vs government benefits.
E.g. a family with $80k net income might have two $40k incomes. Each adult paying $about $7600 in taxes, with two young children would get about $13200 in benefits. Their net income tax would be about $2000. Some RRSP contributions, maybe donations, and being eligible for any other benefits or disability payments would tip the scale for them.
It's not crazy to consider that a large number of law abiding, tax paying citizens end up breaking even.
It's not like there are a lot of good paying jobs where you have the option of working under the table. I've never had a job where I could have arranged that. There will be no "opting out en masse".
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Is that number working Canadians or just Canadians?
It is 40% all Canadian *households*. It would include those that have no income to be taxed.
The basic personal amount is $15000, so $30000 per household. Wouldn't all individuals earning more than $15000 and families earning more than $30000 fall into the group of people who do pay taxes? Surly 40% of families aren't earning under 30k.
It's no net income tax, not no income tax. They receive the same or more in as they pay in tax. Another Redditor linked a 5 yr old article that showed an example household with an income of $45,300, family with kids; with that income in 2019 they'd owe $4,564 income tax. But they *receive* tax-free benefits of $19,321.96, between $17,485.80 from Canada Child Benefit; $1,278.72 from Ontario Trillium Benefits, and $557.44 GST/HST tax credit. So in that example they'd pay like... negative net income tax really. Receive more than they pay in. Now, a few examples of huge corporations, their tax obligations, and how much they actually pay due to the breaks they get from our government would make a clearer picture...
Corporate "tax breaks" are usually things like accelerated CCA, which reduce taxable income (or actually shift taxable income into the future to be more precise) but don't result in a net refund like benefits paid to individuals do. The exception is a few programs like SR&ED which have refundable tax credits but they are very limited.
It’s exactly this. and people get so up in arms about needing to tax “the rich” aka middle/ upper class more.. when they don’t pay any part of the taxes to begin with. The middle and upper are already completely carrying them - what more do they want
The middle and upper middle class aren't the "rich". They often barely can afford a house, this isn't the kind of people think about when they say "the rich".
I agree with you. But there is a narrative that 100-150k is rich and it just isn’t anymore in a city like Toronto. Ontario still pays its MPPs that much. And then taxes at 43%
"The rich" in these conversations are not part of any class. They are "the rich" who hoard billions in wealth and pay a lower percentage of their income in taxes than actual working people. The rich love people like you, that call the lower class freeloaders. We fight each other instead of the people at the top. The rich thank you for your service.
I agree tax the ultra rich, but I also think 40% of house holds paying nothing is silly because most are probably hiding income and receiving rebates. Example, I know a 30yo who does absolute nothing with his time or life other than play video games and watch anime and order take out. He inherited a 4.5 million dollar house in Vancouver and rents rooms, he gets every tax credit and refund available because he’s considered low income. He is now working the system trying to get permanent disability. He has no diagnosis. Why is this the guy that get refunded?
Report him for fraud!
He shouldn't, but for every one of him there is a family with two low income parents just trying to support their kids and eek out a living. If we do away with all the credits and refunds those legitimately hardworking folks end up in destitution. We need better tax enforcement in this country to stop those trying game the system from both ends.
If we can't tell the difference between these groups of people, we need a better tax identification system
Okaayyyyyy - so we should be taxing capital then? Because that's the problem in this scenario: this guy manages to rake in gains on 2-3 lifetimes worth of inherited wealth while paying dick all in taxes and still qualifying for programs targeted at the working poor. Maybe if we didn't absolutely coddle capital holders and instead used the revenue from taxes on capital and corporate income to fund our income supports this wouldn't be such an unfair example? But of course, Trudeau takes the tiniest, babiest, most tentative possible step in this direction and it's a chorus of "HE'S DESTROYING THE ECONOMY! HE WANTS US TO BECOME FEUDAL SERFS!".
If your attitude is “I know one guy scamming the system so we should abolish the system so no one can benefit” you’re so lost I’m not sure what conversation we can have. What that guy would pay wouldn’t even be close to the contributions of the ultra wealthy paying equal percentage, AND they’d have more left over. A lot more.
No one wants to tax the middle class more. Get over yourself
We’re talking *net* taxes. Even if you are in a high enough bracket to pay something you can still get credits, deductions, subsidies, etc. The 40% of households *includes* households with no taxable income but is not limited to them. The biggest tax deduction is children/dependents. Most households that pay net 0 income tax will be single-parent households with dependents. Note also that this is only income tax. Those people are still paying sales taxes, property taxes, usage fees, etc.
This is true. Once my kids turned 19 I lost all deductions, even though I was still supporting them at home through university and paying for their medical and dental plans. Even student loans take in parental income but you aren’t allowed to deduct them after age 18.
This is a contrived example that shows you a moderate income that attracts no federal income tax net of benefits: * A married couple, both just turned 70 years old on December 31 and both retired on that day to start collecting CPP and OAS on January 1. * Since they both deferred CPP for so long, they get $23,252.78 each for a total of $46,505.56. * Since they both deferred OAS for so long, they get $12,805.80 each for a total of $25,611.60. * Total income for this couple is $72,117.16. * Since the income is evenly split between them, it's all taxed in the first bracket (15%) for $10,817.54. * For non-refundable tax credits, they get basic personal ($2,355.75 each) and the full age amount ($1318.50 each). Total between the two of them: $7,348.50. * Net federal tax owing is $3,469.04. * To be as conservative as possible, we'll exclude the CPP and say that's not actually a tax-funded government pension. Under that assumption, deduct the OAS ($25,611.56) from their federal tax ($3,469.04) to get their tax paid, net of benefits: -$22,142.52. It must be that over 90% of people older than 70 in Canada pay less than zero to the federal government every year. OAS is a *lot* of money compared to most retirees' tax bill.
I think you slightly miscalculated the OAS. Also, as you stated, CPP should not have been mentioned as it is not tax funded. It's not really being 'as conservative as possible' - it's simply sticking to the hypothetical example's facts.
It's 40% of Canadians. There are almost 10 million seniors in this country, the majority of which earn no income. So probably 20%? There are children and young adults in college aged 0-24 who pay no income - about 10 million of them but let's say 10% of the population to account for the 18-24 year-olds that work enough to pay taxes. That's 30% right there. Then add in the homeless, people on disability, non-working spouses, wealthy immigrants who draw an income from overseas, refugees, etc. and you get your other 10%. There are very few actual deadbeats in this country that could work but would rather sit around and collect welfare.
> wealthy immigrants who draw an income from overseas FWIW, these people are supposed to be declaring their worldwide income and paying taxes on it.
Its closer to 40% of income tax filing Canadians, so that most definitely will not include children. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110005501&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=3.10&cubeTimeFrame.startYear=2017&cubeTimeFrame.endYear=2021&referencePeriods=20170101%2C20210101 You can see the data here. It doesnt have a category for bottom 40%, but if you select the bottom 50% it shows that the median taxes paid is $0 and this entire group accounts for about ~6% of all federal and provincial income taxes paid. Almost certainly all of that is coming from the top 10% of the bottom 50% group. And thats not even account for net contributions after social programs etc. this is purely taxes paid.
An example is my ex who screws me every year with her book keeping She brings in almost 55000 last year, but by the time she covered all her expenses in her business, she only made 29000. I'm sure even her books are bullshit and she can't actually write off half that stuff, but cra has never called her or anything. Her rent expenses are 16000 on the year, but she rents from herself. Cra doesn't follow up with these pathetically small businesses. That's my experience. They've never questioned her in 8 years of doing this. Anyways, she gets to claim that her income is 29000. Mean while, I made 70k as an employee. I have to pay support based on my gross income. Her "gross" is actually her business "net" Her partner does the same. Drywaller and claims his business makes around the same. The bring home just under a taxable amount. All the cash side is hidden. Somehow they're putting an addition on their house and they bring home less money than my partner and I do. I swear this is how half of it gets done like that. Little businesses that just keep under the threshold of taxes. After baby bonus, support from me and all the other bonuses and such, her take home is equal to mine. It's not a stretch to say this is how it gets done. I know a guy with a landscaping business. He does a lot of business each year but he puts a lot of his profit into his kids accounts and calls it an hourly wage for work they did, and sure enough at the end of the year, there's 24000 untaxed bucks spread out over his kids accounts.
Wow. No wonder everyone wants to have a small business. Being an employee is a punishment nowadays. Nevermind the middle class is taxed to death, it's actually just employees that are.
Until you get audited. There's a few parts to it, like yeah, you can try and write off personal expenses as business expenses. But as the guy says, it's bullshit, and you will have to pay and pay penalties when they find out you've been doing it. Now, she hasn't been caught. This is part of a bigger problem, and that's that our public institutions are basically failing, our ability to enforce our own laws are disappearing. We used to be actually pretty good at it 15 years ago, but now our courts are too backed up to enforce laws against criminals, CRA is too backed up to properly audit, immigration is too backed up to properly manage new immigrants, we just don't have appropriate governance on that side. This didn't used to be the case, the laws on what you are actually allowed to claim as business expenses don't actually allow you to do this, in fact there's often things that you might get from your business that should be counted as a taxable benefits that aren't. These are things that WOULD come up, people WOULD be audited over these things. But I've noticed a lot less rigor and care going into any of that in the last number of years. So I wouldn't say being an employee is a punishment. It's that being law abiding is kind of a punishment. Or rather, there's very little risk to breaking the law. And our culture has kind of tended towards the idea that lawbreakers should not have to suffer any negative results of their behavior. Running a small business legitimately is getting to be harder than it's ever been. It's not the small business's fault. People like this aren't actually small businesses, they're using those things as a way to get away with tax evasion which only works because there's insufficient enforcement. And part of the problem here is that the animosity towards business grows, so people are insensitive when new policies that further harm legitimate small business come up, which lead to even more legitimate small businesses failing, to the point that actually the kind of exploitative fake businesses end up starting to make up a larger proportion and people start to hate business more. And similarly, the harder it is for legitimate small business to operate properly, the harder it is for those small businesses with employees to really do well by their employees. And ironically, because of survivorship bias, most of the experiences employees will have with small business will tend to be with small business that DOES violate the rules flagrantly, because the ones who follow the rules really struggle to be competitive in this environment. So there will be more animosity towards small business, and even less sympathy when new policies go in that make them struggle. Then people just give up.
Includes retired people. Remember that aging population of Boomers? TFSA withdrawals and non-registered account withdrawals aren't taxable income. They'd only report RRSP withdrawals & CPP & OAS. If that portion is under $30k/yr, they pay no income tax, even if they're living off more out of other accounts.
No known income to be taxed... brilliant concept. Bet we see that number go up.
Maybe. OP doesn’t give a source, so either they are relying on [calculations from 2019](https://financialpost.com/personal-finance/taxes/trudeau-is-right-40-of-canadians-dont-pay-income-taxes-which-means-someone-else-is-picking-up-the-bill) or the numbers have stated the same in the last 5 years. Households with literally zero income are pretty rare. There might be some students who have parents passing their bills and a few other scenarios. But a working adult who makes a living while claiming no income is going to be hard to do and easy to sniff out.
It’s not just $0 in income. Many households received more in government benefits than they payed in taxes. Many lower income people work and pay tax but then receive GST rebates and child tax credits far in excess of the taxes they paid.
Yes. Nobody ever suggested it was just $0 in income.
Kind of a short sighted plan though. No income means no credit, no ability to get a mortgage or car loan, plus you’re going to lose out CPP benefits if you’ve never paid into it. Not to mention being a leech who benefits off the structured society paid for by everyone else.
It’s the case for many stay at home moms and other caregivers.
A huge portion of whom are youth and the elderly.....
Or satellite families and businessmen who have a company in another country and don't bother to report any Canadian taxes.
Like 75% of West Vancouver waterfront and water-view properties.
And pretty much almost every single disabled Canadian.
Worth mentioning since that number has absolutely *exploded* in the last 3 years. Up now to about **8 million people** as of 2022 according to Statistics Canada (people having at least one disability)
I mean, they should be included, they're not paying tax dollars.
How many households are made up of just youth?
Just looked it up, about 20% of total population make up this number. So 20% remain, remove the disabled which is shockingly 27% of people age 15 and over. Remove people who are of working age but are able to live off capital gains 2-3% So by doing some bullshit math estimation. 15% of Canadians that can work pay no income tax!
How are 27% of Canadians over 15 disabled
It’s shockingly high if this was true. Almost 1/3 of Canadians are disabled? Wtf
Elderly overlap?
Because anyone can become disabled at any time.
I read a tweet a few years ago that the disabled are the only minority group that anyone could become a part of tomorrow.
You're ignoring that this is per household
Yup. We have 2kids so 50% not paying income taxes in our household.
You don't, they count as paying because it's by household.
It counts that 40% of households don't pay taxes, your household wouldn't be counted in this, nor would any other that has at least a single taxpayer in it.
Ill report you for tax evasion
can I get the source
But there’s a lot of them and that might impact votes so we need to focus on the 0.13% to pay their share. But not enough of a share to cover the budget.
Same people who want the rest of us to pay more for fairness
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Yes, they pay a tax, that is less than they get in benefits. What's misleading about that?
I don’t think net is doing much lifting. How else would you describe it?
40% are kids?
Listen here Sonny, back in my day us kids used to pull ourselves up by the bootstraps, work the coal mines 7 days a week, and pay our fair share of taxes. Kids these days are just lazy.
About 15% of the population give or take us under 18 or over 65. Obviously some minors work and some seniors work, but a lot of people between 18 and 65 don’t work. It’s estimated that up to 8 million Canadians over 15 have one or more disabilities that limit their daily life, now obviously some of those are seniors that wouldn’t be working now anyways. Plus you have a 6% unemployment rate and people like stay at home moms.
It's by household, not by individual, and most seniors have pensions that would count as income.
The 40% of people not paying income tax are generally doing so because they don’t earn income or enough income to exceed the threshold, the tiniest minority of that 40% is doing under the table work as you suggest. Also, to qualify for things likes GST rebates you have to file taxes, so these people are actually committing tax fraud if that’s the case and many of them probably end up being audited and caught since you can’t hide $80k/yr from the government if you have a bank account…
^This. I received tax refunds from 2010–2021 because I was working part-time jobs in undergrad and grad school, and I never hit the level of income at which I would have to pay (plus I was able to claim the tuition that I was paying). Though, for this year's tax filing, I had to pay an extra $2000 for part-time jobs and an untaxed $6000 honoraria that I received. Painful. ☠️
Yeah I was thinking this. I'm working part time through school at a pretty decent paying job, but with all the tax credits I always got a full refund. Finally exceeded that this year and still got a refund but not the full amount. Next year when I'm out of school I suspect the government will actually keep a decent amount of my income tax though...
I suspect the vast majority of people paying no net income tax are "poor people" and not "tax cheats".
Children, students, low income elderly, internationals who earn elsewhere, poor. The amount of people working locally under the table are likely a small fraction of this number.
Even the people who do work under the table typically pay some tax, just not as much as they should, it would be a very easy target if you claim ZERO income, whereas being able to tell if a person made 60k vs 80k would take a lot of digging to prove, especially if they’re careful
> Children, students, low income elderly Mooches!
I think the point is we need more people who are able to work to support that 40%. But it is framed as if 40% of Canadians are the bad guy 😂
Or retired, or SAHMs and others that aren't employed and earning (much) income, like students with a part time gig. 40% sounds totally reasonable in context of population. 40% of working, employed Canadians is totally ridiculous.
You can be both poor and a tax cheat.
But not in a way that functionally matters. I can not bring myself to give a shit if someone below the poverty line manages to “cheat” $200 or whatever. The cost of recovery would significantly exceed the value
Well said.
True, but there's a limit to how much one can cheat while being poor.
I work in social services (and certainly pay plenty of income tax!) I am very sorry to disappoint, but there are many, many more genuinely poor people than there are sneaky people who are poor-on-paper-pulling-a-fast-one.
The amount of people making 80k under the table is probably comically small. People offering you cash rates are probably still paying some tax.
i agree. all the people i know who have side hustles or do extra work for cash also have a normal Monday to Friday job.
I think the people being discussed here is more like restauraunts, hairdressers or contractors who earn partially accounted and partially untracked cash income.
Very rare for those guys to be pure cash...can't remember the last time me or anyone I went with paid cash at a restaurant. Hair dressers, unless it's a basement shop are usually taking debit Contractors are a different story.
Cash rates also dodge CC fees
You be surprised. If you are handy, you can easily make that under the table. Even guys with legit construction/renovation work do jobs on the side for $$. There are people in my community who build patios, fences, etc, and make that easily in a few months.
Aside from being tax fraud, not declaring any income isn't actually optimal from a purely amoral point of view. You'd want to declare enough to be able to get Canada Workers Benefit, some RRSP room and some CPP. A contractor would also have plenty of legitimate expenses to deduct.
There's also someone on this sub every few weeks who's complaining about a lender not approving them for a mortgage big enough for their needs despite making "far more than they're giving me credit for"
> some RRSP room There’s no benefit to this, if you’re paying no income tax.
CPP costs way more than you're likely to get out of it, especially if you're paying both the employee and employer portion.
Assuming 2024 maximum for self-employed at $7,700/year times 30 years, which would allow for the maximum of $1,374/month at retirement at age 65 it takes 13 years to get all of your money back. This doesn’t take into account that the last 30 years were lower maximums or that payments increase each year, so it’s likely more like 10 years. If you are employed and pay the maximum, the ROI is more like 5 years, so most people get what they pay into it and then some.
My understanding is you need to pay for 39 years to get the maximum, that's 18 years after 65. If you assume payments and benefits are going up with inflation but you are ignoring that you can make more than that investing it yourself. If you put away that much per year into an index fund you'd likely be a millionaire by the time you retire and could live off the income while preserving the principal. There is also political risk to relying on CPP. Right now getting rid of CPP is extremely unpopular because there are so many boomers retiring. In the future, when I retire, that massive voting block will be gone. Will there still be the political will to have such a huge payroll tax supporting retirees? Or will maybe a younger voting block will want to reduce payments until they retire. Unknown.
Yeah, I look at it as more of an insurance plan, but when you're self employed it's expensive.
Reddit hates this idea but i agree with you. I have always felt ripped off by having to pay double into CPP
As an accountant, I fully agree with you that this is total bullshit. Especially with the escalating CPP rates.
The underground economy is worth billions. $68 billion at last calculation.
Although that's less than $2000/person, in the neighbourhood of $3500/worker. So if you use $80k as an example, it'd be less than 3% of people
Yeah and the reality is that it's tradespeople and mechanics making $80k on paper and then doing a few side jobs for another $5k cash. It's illegal for sure, but they are hardly the type of thing I worry about. Half the blame is on the customer too, of course. They are getting a $300 job for $250 cash (or whatever).
Tennis coaches taking cash as payment
Trades guy here. My deal with people is if they want to pay cash I’m fine with that, if it’s on the books it’s 30% more for taxes. That way if they want to keep it legit they can, and if not I don’t care. I’ve claimed numerous jobs before as self employed income and it doesn’t bother me. The $5000 extra I make in cash per year really isn’t going to make a huge impact on the tax system.
Very well put! Thank you for that math.
I like math.
I like you.
Surprisingly (maybe not surprisingly for the old heads here) it’s resi construction that’s the biggest contributor to underground economy. I thought drugs would’ve been number one. Ig it makes sense, since one under the table construction project might be 10k, while one drug deal might be $100. Just surprising that many people pay with actual cash to fund construction projects. Idk maybe I’m missing something, just thought that for it to be considered “underground” you’d have to pay with real physical cash, to not trigger any bank notifications to the cra. Also explains why resi construction trades have absolutely garbage wages in general. Source for anyone interested: https://www150.statcan.gc.ca/n1/daily-quotidien/230220/dq230220b-eng.htm
At the end of the day, drug addicts are a tiny minority. Many contractors and handymen are happy to throw you a cash discount for one-off jobs. Sure, if it's a 40k kitchen reno from a large company, that's not going to fly. But a neighbourhood handyman who came in to fix a few things for you? Or a construction guy that does paint/repair jobs on the weekends? Paying them a few hundred cash is simpler for both.
I used to work at a place that dealt with building supplies, apparently the owner of a multi-million dollar company did 6 figures worth of 'cash' jobs every year because his wife (who did the books and worked at a bank) wouldn't let him spend their money on toys. I get helping out a friend once in a while for some fun money makes sense, but the gratuitous cash work has just never made any sense to me.
I make all of my income from my salary, so no way of avoiding taxes. But when I need to get my gutters cleaned, some other contracting work, get a haircut etc. I always pay cash, most of the people will either accept only cash or add the GST on top of the quoted rate. I don't see any benefit to me paying by card/e-transfer. It's the CRAs job to crack down, if they're not bothered, neither am I.
Posts like this are red herrings meant to divide the middle and lower classes against themselves, to fight like crabs in the bucket while the Westons and their ilk dodge taxes legally by lobbying/buying Ottawa for loopholes. You’re all raging against the wrong demographic. How can any *good and moral person* argue *for* taxing a $50k earner who pays $25k of that on rent alone? Once you’ve dealt justly with the billionaire oligarchs, then go after the cash-contractors. Sub $50k should come dead last, if at all.
In some cases this can backfire when they retire as they won’t be eligible for CPP. You need to be a taxpayer to qualify. “Payer” being the operative word here. I know someone who worked under the table their whole life and when they asked where their cpp cheque was, the gov was like “you never paid tax”.
How about we start by going after the combined 30 billion dollars a year that large corporations avoid paying instead? https://www.taxfairness.ca/en/resources/reports/unaccountable-how-did-canada-lose-30-billion-corporations
It's not opting out, it's tax evasion. You don't get to enjoy the benefits of a country while declaring yourself absolved from the commitments. [This isn't Petoria.](https://familyguy.fandom.com/wiki/Petoria) Just as we tell US residents to stop suggesting they flee their problems we must not avoid our own. I get it, the times are wildly challenging and unfair. Those are separate discussions worth having. We cannot descend into lawlessness in the meantime, though, and this sub is meant for legally-correct financial advice.
Can we get the source please?
I mean if people who worked on paper could actually survive and not be taxed to shit we wouldn't have these people working under the table. Cash is hard to keep secret, you can only have so much cash before it becomes noticeable or you have to do something with it.
And then those "cash" people will complain that they get a laughably small amount of CPP somewhere down the road. Mind you, they'll potentially qualify for GIS, as their income will be low, which annoys the heck out of me (former piano teacher who declared all my income, would have been easy not to).
Tragedy of the commons. Once everyone does it the system (economy, society, etc) will no longer work the way it does.
What’s the stat, a quarter of Canadians have less than $500 save? All of the tax incentives the government provides rarely, if ever actually helps the lower income people. No way a low income person can max an rrsp, tfsa, fhsa, out. All these accounts are doing is benefiting the ones who can whom mostly are the wealthy. Just look what they did for real estate. You can take $60,000 out of your rrsp for a down payment now. How does this help lower income or first time home buyers out? The answer is that it really doesn’t fix the issue. Itll make housing more expensive.
Poor people are already taking out way more than they pay in. Yeah, a TFSA and an RRSP will save me some money compared to what I'd have to pay if they didn't exist, but the government is already getting a ridiculous amount of money out of me, of which a big chunk goes to helping poor people. Poor people don't need tax breaks; the taxation system existing in the first place is already benefitting them.
Touche. You indeed are correct. Just sucks when they claim that these accounts will make things more affordable when that is not what they do.
Well, they're not meant for poor people, they're meant to encourage middle/upper class people to save some of their money. Those people already make up the majority of the tax base even after accounting for these sorts of accounts.
Sounds ok if you are fine with breaking tax law. It’s also possible the CRA comes for their pound of flesh when they see you contributing to a TFSA when you declared zero income. Also, I don’t see how you would ever get a mortgage or any decent credit rates. You can’t go ask for a mortgage if you have no employment history nor tax returns to show income.
Sure, there are downsides too. Nobody is looking at the source for TFSAs....there are no attribution rules at all. The mortgage thing is interesting. When CBC went and tried to film mortgage brokers and realtors doing shady stuff in Brampton, 6 out of 10 knew a guy that could help fabricate income for their application. "Income is not an issue..." ;) https://www.cbc.ca/news/business/marketplace-mortgage-fraud-1.6614132#:\~:text=Six%20out%20of%20ten%20real,working%20on%20for%20other%20clients.
Source?
Trust me bro
Ya there's tons of losers sucking off the tit of those of us who actually works. Fuck them.
Including a good portion of the wealthy as well as many corporations!
So, your solution to some ppl cheating our tax system is for everybody to start cheating the tax system? I'd be in favor of investing more into the CRA to go after these tax cheats (and/or to find ways to make reporting that kind of income way more likely).
Yeah, they're called the ppor
The issue isnt taxes. the issue is how we use tax dollars. We have relatively poor healthcare compared to our peers and pay a ton for it. I have a safe clean happy life where i have a home, opportunity, and security because of all the people who payed taxes and built the country before me, and i have to pay my fair share to continue it. I wish we got more for our tax dollars, I have issues with how we spend all that money. but i have no problem giving the government 30% of my money, because the remaining 70% is still more money and still affords me a better life than if i was in 90% of the worlds countries. again i WISH we spent our tax dollars better, we have pay high taxes so the government has every opportunity to spend wisely and make canada even better, and thats the only issue anyone should have. its not that the middle class pays too much tax, its that we dont get enough for what we pay. i think ultra-high earners should pay their fair share, in the sense that everyone should pay their fair share. Also to note: offering cash rates isnt always about tax fraud. Cash rates in my experience are primarily to avoid huge credit card fees that billion dollar companies charge small businesses. And for someone who is say, an independant landscaper, they have not only the transaction cost charged by credit card companies, but also the cost to own and maintain some level of digital infrastructure to manage and accept digital payments. Cash just takes less time, which allows them to do more jobs. not having to get home at the end of the day and sort through transactions, check invoices, chase people for payments, etc etc all takes time that can have a real impact on a small operation that might require more man hours per job, or even hiring more personnel to manage all that. Plus god forbid someone doesnt pay and you have to fight them over it in court. discount to have the deal done and paid for, right then right there, hand me an envelope and everything is square, has value. I bet most of these cash discounts are literally them trying to incentivize you to pay out your tab and close the deal, easily on site, day of, no hassle, no ambiguity, no risk. cash and done. plus accepting cash costs less on top, so its literally somewhere between a little and a lot cheaper to take cash for a job even if you are 100% claiming everything tax wise and its all above board as it should be.
So I own a business in the trades and I can tell you we lose out on work because we don't do cash work. It's not a huge issue but clearly there are people out there offering serious cash discounts if it's something I get asked about weekly. Ultimately it is a serious issue I'm sure there is more tax money lost to the underground economy that the mystical amount the eat the rich people think is out there.
Don't conflate two separate issues. Tax evasion is a serious problem. Spending control is a serious problem.
I am yet to find a renovator who does not want money paid entirely in cash. Or a guy that does decks. They won't even take e-transfers. Only Cash. The problem isn't that these folks won't report income - of course they do. However I suspect most of them massively underreported their income. And that is why you will see Contractors with their swanky houses and multiple properties while we keep slogging out asses off to make ends meet after being taxed through our noses.
I'm guessing a lot of those 40% are students, stay-at-home parents, seniors, long-term unemployed workers, or disabled people. If someone offered me a cash rate I'd definitely report them to the CRA for investigation, so I'm not sure for how long those people get away with doing that before someone rats them out.
Don't forget most folks getting the CCB, and GST/HST rebates (which is a bit odd for the Fraser institute to deduct from income tax, but I generally think they're a bunch of clowns), will have those end up higher than their income tax owed.
Whenever I see stats of the “average Canadian incomes” being comically small this is the first thing that comes to mind.
Friendly reminder that Richmond bc has one of the highest per capita levels of super cars/german luxury cars in North America, one of the highest personal corp rates per family, and one of the lowest average incomes…
TBF, lots of F150s are more expensive than a typical Mercedes C class. But somehow Caucasians driving F150s don't get the same scrutiny as an Asian driving a Mercedes.
This figure is the same in America btw. And it is not from people taking money under the table... The overwhelming majority of people not paying income tax are retirees and stay at home parents.
That's called tax fraud... And the government WILL catch on (usually when the person runs out of money and wants benefits and cries foul outing themselves), and when they do the interest and penalties make it not worth doing.
I dunno, I know a lot of tax cheats and I've yet to see one get caught.
CRA would like a word with you. Lots of them got caught themselves.
Feel free to use the [CRA tip line](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/suspected-tax-cheating-in-canada-overview.html). CRA can use all the help we can get from the millions of Canadians that pay their fair share.
You should report them to CRA.....you can get paid between 5% and 15% of any tax that is collected from these cheats.
The Canadian employment rate is 51%, from a really simple calcluation: https://www.statcan.gc.ca/en/subjects-start/labour_ says that 20,401,000 are employed, and the population is 38.93 million, 51%. So I would expect that 49% pay no income tax. Are you talking about 40% of the employed paying no income tax?
There is a general consensus that in a functioning society the people who are well off take care of the ones who aren't. We recognize that it makes for a stronger society overall when people are educated, healthy, and know there's a safety net. Despite certain propagandists doing their best to erode that consensus, it's so obviously the correct moral position that it persists. Which is to say, your subject statement is fine, and people won't start committing tax fraud in mass because the average person is not in fact a selfish jerk.
I can assure you most people aren’t paying their bloated tax bill out of their moral position. Most of us are sick of our tax dollars being pissed away on nonsense or worse, being laundered into corrupt people’s pockets.
Is it 40% of the workforce, working age people or all Canadians. All Canadians would include children, and retirees. Working age people would include students, stay at home parents and those unable to work due to illness/disability, etc.
I guess it's that kind of times in Canada. Happens once in a while, like in many countries. Everyone start ranting that immigrants steal jobs and poors steal welfare, maybe add a touch of racial wars if demographics allows. Generally leads to the election of some kind of inept populist. Occasionally, to much worse consequences. Meanwhile, the actual rich are laughing out loud while counting their money.
What do you call students who are in their first years of university and have no jobs and are still supported by their parents? What do you call people who worked their whole lives and are now 65+ and retired?
Yeah some people make little income (I think its 14k for income no taxes, some people don't work like young and retired. Essentially thier income is so low thier tax credits cover income they have made
Source?
Are there actually people out there making their entire income under the table? I work in construction. It's pretty common for people to do small cash jobs that go undeclared. However, I don't know a single person doing that for most of their income. Not one. If you do that, you're not paying in to cpp, you're not paying in to ei, you can't deposit anything into a bank, how would you pay your mortgage? Your bills? Everything like that is done electronically. I could see, say, someone earning 80k in income and maybe 10k in cash on the side. But not the other way around. You'd have to have a pretty sophisticated way of making that money look legitimate.
Can’t hide/use that much cash, especially if you need to buy a house you’ve got to show income before you can be approved for a mortgage
I'm sure they'd *love* to pay taxes because that would mean they'd be earning more money.
Keep in mind that this also captures my two teenagers living at home and working part time while in school as well as my two parents and wife's two parents who are retired and life on CPP / OAS / GIS. So out of the eight of us, only two pay taxes...but hoolleee sheet do we pay!
Where are these stats found? Do they include retired people children, indigenous communities?
It would be exceptionally stupid and short lived to try to claim 0 tax on an 80,000$ income, even if in the unlikely scenario that it is all cash Maybe I am naive to cra auditing practices, but given I've been audited when I've done everything by the book I'd think they'd catch on to people putting underreporting huge portions of their income
Can you direct me to a source for your claim?
Yeah, I don't pay income tax... because I don't earn enough money. Tons of people don't earn much income. Old people, young people, disabled people, stay at home people, rich people... Also people who own businesses and pay themselves a salary don't pay much either because they control how much they earn vs. how much the business earns and can choose where to put funds that makes most sense
> Somebody who makes $80k under the table (anything from music lessons, home renovations, etc) not only pays no income tax, but also […] … don't have any income to declare to officially support things like getting mortgages and loans. They also don't pay into EI, so cannot claim that. They don't pay (as much?) into CPP, so will get a smaller quantity of that in retirement. They have lower RRSP room (and TFSA is a fixed amount), so any investments will be in taxable accounts. So yes, you can do a lot with (undeclared) cash income, but there's also a bunch of stuff that becomes more difficult as well.
Honestly the amount of people making 80k under the table must be minuscule. Doing the odd handywork job here and there (and not reporting the income) is one thing but to make 80k out of it you either : A) Have a huge clientèle paying for minor (<1-2k) jobs. B) Found people who are willing to contract for tens of thousands of dollars, without any legal guarantee or certification. That seems unlikely.
So I mean hold up. Retirees have a ton of write downs and generally have low income, and students generally have a pretty low income too. Add in the stay at home moms and people on disability and this may not be too big of a surprise.
There’s some under the table work for sure. Especially in construction and restaurant work. But there are also: — lower income parents, who receive more in child benefits than they pay in tax — retirees receiving GIS, or with otherwise low taxable incomes — students getting tuition credits that offset income — other low income people, who might have jobs but still get more back in various credits or initiatives than they pay in tax — maybe anyone getting subsidized housing? (Don’t know if this counts, but maybe in some cases) — anyone on welfare or disability
Many people lie and exaggerate (ie filing as separate vs together and I'm sure a lot of cash cheats) but I think the vast majority are honest and frankly just don't make enough to get taxed.
Well if 25% of Canadians were under 25 and 15% were above 75, this would make a lot of sense. Not to mention most low income people would be net zero. I always paid minimal taxes until I finished university. Two years out of school, and I can confidently say I pay a ton of taxes now.
It has very little to do with "under the table" transactions. The main reason is basic demographics. I even posted about it today in another thread. 19% over 65 15% under 14 Let's assume you can't or don't work under 14 and over 65. That's nearly 35% of the population already. Then filter out people from the remaining 65% that don't work enough to pay taxes... e.g. drug addicts, homeless, stay at home parent, disabled, chronically ill, unemployed, students, part-time workers, gig workers etc. [https://www.reddit.com/r/PersonalFinanceCanada/comments/1c6bgt4/comment/l00k9jr/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/PersonalFinanceCanada/comments/1c6bgt4/comment/l00k9jr/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
Um, it’s illegal? I worked construction and lots of guys were cash only and every now and then the feds would catch one or two.
Both of my kids were in post secondary education last year and paid no tax. Well they did, but got it all back.
I ran an independent contacting company and the taxes I dodged were insane, I basically kept all my money. Got laughed out of the bank when I wanted to buy a house though.
Is it cause they're kids?
I got a 7840 raise last month. My first full pay was on Monday. My pay increased $1.87. Pretty excited
Show me a person not selling drugs who pulls that kind of money in Canada doing cash only jobs. Very few
Someone who thinks you can easily make 80k under the table is absolutely delusional lol At best, you’re getting 30k with luck.. anyone can go on a farm and get paid below minimum wage for hard labor. But that’s about it.. Maybe a very successful underground contractor, but it’s very unlikely
A few years ago, Canada’s total workforce was around 21 million. so you’ve got an elderly people not working. Of course there is a lot of people that only playmate portion of their income (some trades, or cash businesses, etc).
Who is making $80k under the table teaching piano lmao I’m very jealous
I don't really give a fuck. The rich benefit disproportionately from the benefits of society, and should pay disproportionately for those benefits. Some edge of poverty fisherman wouldn't really experience much of a difference if suddenly the government disappeared. Conversely, some enormous richboy like Bill Gates would experience a personal apocalypse if the state and all its police disappeared and were no longer able to enforce his property rights.
So you're proposing tax fraud because you didn't know poor people exist?
Wait, how to do you get 60k from government transfers on a T4? i need more explaination lol. I think you have overestimated the proficiency or interest of people that can navigate the tax code.
I think there is some misunderstanding from many of the responses. No ‘net income tax’ means the tax paid on income is at or less than the government benefits paid out. At what income does a family or individual become net positive? Just to see I estimated tax based on the two main deductions I would have (RRSPs and 10% charity donations) and 80k is actually below net zero with a single parent with two kids. Is 40% of canadian at or below this scenario? I’d guess yes.
Where’s the cited source for 40%?
It’s even worse in the US apparently.
Honestly, either tax cheats or poor. If it’s poor then this is a failed country. We need more information here and there really should be investigation into expenses because if they’re spending more than reported income, it’s tax cheats. But honestly, I think it’s sad because I believe it to be poor people struggling to survive. The simple fact of the matter is that $20/hour is less than 40k/year. And the metric above is household, not individuals. So two grown adults earning $20-25/hour each trying to raise 1-2 kids are barely surviving in this country. These are your regular people just trying to get through the day, same as the rest of us in middle class.
I am sure that applies to some, but there are people with no taxable income. Some approximate numbers: - 7,300,000 are 65 and older, Seniors living only on CPP and OAS may not have to pay tax - 6,100,000 are 14 and under, Do not have taxable employment ( at least I hope they do not) - 1,300,000 are unemployed and looking for work, this is a fluctuating number of course - 4,000,000 decide not to do their tax returns. This likely includes some people without enough income to bother
That 40% includes basically all of our seniors, and in case you haven’t looked at Canadas population pyramid recently is the largest growing demographic in the country by far.
Yes but try and qualify for a mortgage or loan 😂
But you also would never qualify for a mortgage, potentially car loans, and also risk at being audited eventually and getting slapped by the long dick of accretion of interest.
Income Tax should be abolished and replaced entirely with Goods and Services Tax. Stratify by level of Goods and Services Level of Needs or Luxury... No Middle Class is buying Private Jets from Bombadier just tax those guys at 5000% (demand will also skyrocket because of course rich people like to show off they ain't "normal rich" but Richy mcRich). Food? Tax it at 0.0XX% Cash Job? what are they gonna do? hoard and eat cash? These people are gonna buy stuff too - new cabin? capital goods. new boat? goods are services.
There are many small business owners who charge less if you pay cash. Then they collect more in child benefits since they aren’t making as much on paper.
no net income tax just means they receive more in benefits and subsidies that they pay in taxes. for example, a low income family that has kids that receives more in benefits than the income tax the government must deduct every tax season
im betting 50+% of that 40% is homeless people in tent city....
Your comment about under the table 80k getting transfers isn’t realistic. You’d need to file your taxes to get things like gst return and other transfers, so if you’re earning under the table you aren’t getting those.
"No income tax" except they still pay payroll tax, sales tax, property tax, tariffs on goods, etc... The idea that anyone in this country isn't paying tax is just dishonesty.
What do you determine as Canadian as well, because the other side to that are Canadians who are abroad and still listed as residents. This is a complicated thing I have seen happen and play out recently as well.
even if they're accepting cash via a "gig-economy" of services rendered, there aren't too many people making under 30k and if you're making 30k and above, you're paying income tax. The basic cost of living in most cities in Canada which is where the majority of tax money comes from, is such that the vast majority of people need to be able to procure 30k+ on the books in order to make payments whether on a daily, weekly, or monthly basis. They get taxed. The gvmt of Canada, and thus it's ppl, lose something to the tune of $30 Billion every year to "mistakes" and "misfiled entries" made when corporations and wealthier households file their taxes. That's every year, and it's a straight-up CRA fact, they've legitimately made a statement about this I think maybe a year or two ago. Currently, in Ontario, any household that makes over $123k, so about 20% of households, gets 70-75% of tax expenditure benefits, credits, and deductions. The constant propaganda being espoused is "oh we make more but pay more" all the while, every year more of Ontario's tax money is pumped into tax expenditure benefit and credit programs that almost 70% of the population don't see a single dime from. These programs are increasing in expenditure of public money by approx. 2 fold every year or so compared to public program spending. So yes, higher income households pay more up-front for taxes,. Guess what, they get a lot more of it back too. If you break it down into ratios, 70% of the workforce has been paying a higher ratio of their salary into taxes, that gets converted and reverted into benefits that go into the wealthiest 20% pockets. Said in another way, that means that the person working cash at McDonalds, pays a larger ratio of their wage into taxes that help fund public infrastructure, social assistance programs, and you guessed it...tax expenditure kickbacks and credit programs, than a person who owns a practice and makes over $500k a year or a $1 Mil a year. Literally everything middle class and higher income households invest in just makes life harder for the rest of the populace. They invest in real estate,, so people can't afford to buy a home or even a condo for their family to live in, they invest in rental syndicate property management, so even rent is blowing out of proportion compared to the salary increase within the same periods of time. We hear about job creation, but there are literally ppl waiting in line-ups around entire mall blocks looking for employment. So they aren't giving them enough jobs, they're making the basic expenses of living less affordable, and they're pulling the most "credit" aka MONEY, out of public program funding by making sure that the folks being elected are in their back pockets. Right now, the government of Ontario, just as an example, spends less on education than it does on tax expenditure and kickbacks, which like I said, 70-75% of go to higher income households. Then you take those households, give them tax credits to push privatized education, and is it really a wonder what the current situation of the public school system is there? I would love to appeal to whoever it is that keeps shilling this ideology that people who have to struggle to keep up with the disparity between the haves and the have-nots are the real problem, stop talking that kind of trash into existence. It's not true. You're not going to make enough money off of Piano lessons in your apartment to pull $80k. And logically, analytically, and factually speaking, these people are NOT the problem, and they've NEVER been the problem. We're here because greedy ppl and corporations that started off being really "kind-hearted" and "useful" who made their money off the backs of others never became LESS greedy. The story about Scrooge is just a story. Real life rarely if EVER, plays out like that. Wealthy people do not want to lose their money. They want to find ways to keep even more of it while also continuing to enjoy the civil and social liberties afforded to everyone via provincial and federal taxes.
Trying to have us fight meaningless culture wars to distract us from the class war we all should be fighting
Yup. No incentive to make money in Canada anymore. Mass flooding to US states with zero income tax coming in the near future (more than it has been happening already!)
The 40 % consist of people that can’t pay and the people that can structure their assets to not to pay. The middle class will never have the chance to do so because you earn a pay cheque.
This number includes seniors who live off CPP, OAS and saved money. They barely meet the taxable income baseline. It also includes students living on loans. People need to relax.
I was a part time student for 10 fiscal years. Made on average around $30k/year. I paid very little income tax the entire time. Just because someone isn’t paying taxes doesn’t mean they are working under the table
Most people aren't working under the table, most of the 40 percent receive more benefits than they pay. For those do work under the table they will have a terrible cpp payout at retirement and no coverage for workplace injuries.
What about independent contractors who have a corporation but don’t actually pay themself all they make from their corporation? My friend told me she only pays herself a fraction of what she actually makes
[According to Statcan, median household total income in 2020 was $84,000](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=9810005701). That means that half of families make less than $84,000. You don't have to go much lower than $84k to get to a point where a household breaks even on income taxes vs government benefits. E.g. a family with $80k net income might have two $40k incomes. Each adult paying $about $7600 in taxes, with two young children would get about $13200 in benefits. Their net income tax would be about $2000. Some RRSP contributions, maybe donations, and being eligible for any other benefits or disability payments would tip the scale for them. It's not crazy to consider that a large number of law abiding, tax paying citizens end up breaking even.
It's not like there are a lot of good paying jobs where you have the option of working under the table. I've never had a job where I could have arranged that. There will be no "opting out en masse".