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Technology Why the most wealthy in B.C. are being hit with a higher income tax

08:50  19 february  2020
08:50  19 february  2020 Source:   cbc.ca

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The B . C . government is promising continued balanced budgets over the next three years thanks to a new tax on the highest earners, sugary drinks, vaping and companies like Netflix. Why the most wealthy in B . C . are being hit with a higher income tax .

The more money you make, the more taxes you pay — right? Not necessarily. While the U.S. tax code is structured so that high earners pay a higher tax "In general, America's wealthy are different when it comes to tax planning because of the options they may have with categorizing the assets they hold

The top marginal tax rate in B.C. will increase from 16.8 per cent to 20.5 per cent on incomes over $220,000, giving the government an additional $216 million in the 2020/2021 fiscal year. © Mike McArthur/CBC The top marginal tax rate in B.C. will increase from 16.8 per cent to 20.5 per cent on incomes over $220,000, giving the government an additional $216 million in the 2020/2021 fiscal year.

The province has created a new income tax for B.C.'s highest earners, which goes a long way to help balance its budget.

People in B.C. will pay 20.5 per cent on all income earned after $220,000.

Finance Minister Carole James announced the new measure in her 2020 budget from Victoria on Tuesday.

In 2018/2019 the government hiked the rate from 14.7 per cent to 16.8 for incomes over $155,000.

The government is applying tax retroactively from Jan. 1 and officials said around 50,000 individuals in the province will pay it.

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By design, wealthier Americans pay most of the nation’s total individual income taxes . Tax -deadline season isn’t many people’s favorite time of the year, but most In fiscal 2007, for instance, corporate taxes hit 0.2 billion (in current dollars), only to plunge to 8.2 billion in 2009

Income is a driving force behind the striking health disparities that many minorities experience. To some extent, income and wealth directly support better health because wealthier people can afford People with low incomes are more likely to live in poorer neighborhoods with a weaker tax base

James said nearly half of the revenue from the tax increase will come from people with incomes above $1 million, and that the new top rate is comparable to those in other provinces including Ontario, Nova Scotia, New Brunswick and Quebec.

The new tax provides her budget $216 million in revenue for 2020/2021 — close to the projected surplus of $227 million — and a projected $219 million for 2021/2022

'Asking those at the top to contribute a little more'

"Now while we're asking those at the top to contribute a little more for services that everyone relies on, we're also making sure we're doing our part as government," she said.

Last fall, she instructed ministries to review their spending on things such as non-essential travel, consulting contracts and office expenses.

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Why is FinancesOnline free. Finland is well-known for having made enormous improvements in the quality of its educational system, and being at the top of many rankings. With a median income of about ,000 most won’t have to hand over this much but for those who do, the tax check of over

Why the Wealthiest Are Hit Hardest. Even as it repeals several itemized deductions, the bill nearly doubles the standard While many lower- income people take the SALT deduction, many would end up better off under the bill because the new standard deduction would be worth more than what they

"And again, as part of budget 2020, we're redirecting a modest amount of funding to invest in key services and key priorities. Doing our part to ensure that we are being responsible budget managers."

She said the government belt-tightening was worth about one per cent of government spending, but that the amounts had been reinvested in programs for child care and housing and the Child Opportunity Benefit, which begins in October. It will provide up to $1,600 annually for families with one child under the age of 18.

She says people earning below $140,000 continue to pay the lowest personal incomes taxes compared to other provinces.

James said even with the new top rate, B.C. has the third lowest incomes taxes among the provinces for individuals earning up to $475,000 a year.

Chill on attracting talent

Meantime, business leaders in B.C. are worried about what the new tax on top income earners will mean for economic growth.

Jock Finlayson speaks for the Business Council of British Columbia and says the tax will make it harder to attract and retain talent in B.C.

"I mean this will become a very challenging place to convince people to put a head office and create head office jobs when the tax burden on skilled people is appreciably much higher than south of the border," he said.

The tax increase to the top tax bracket is the second hike in three years in B.C.

With no spouse to split income with, single Saskatchewan man faces hefty tax bill in retirement .
A man we’ll call Larry, 63, lives in Saskatchewan. A divorcee with two children who are approaching middle age, Larry’s spousal support payments of $2,500 per month end in several months. He wonders what his financial life will be like if he works two more years in his job in agribusiness product consulting and then retires. Larry’s financial life is simple. He earns $7,500 per month plus a variable commission averaging $3,333 per month. His employer provides a car and pays all gas and insurance. After tax and benefits deductions, he takes home about $7,583 per month on average. (Email andrew.allentuck@gmail.com for a free family Finance analysis.

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