Resources: Tax Facts & Myths
How much tax rich people pay
Myth
Rich people already pay more than their fair share of our taxes.
Fact
Research shows that once we factor in all sources of income and all types of taxes, the highest income individuals pay tax at a rate similar to the rate of tax that poorer people pay, and sometimes the wealthy even pay tax at a lower rate than the poor. The myth that the rich pay their fair share also presumes that rich people earned their income. Earning an income and receiving an income are not the same thing. Furthermore, our rigged system taxes income from investment at only half the rate of income from labour, and wealthy people get most of their money from investments.
Taxes and First Nations
Myth
Indigenous people in Canada don't pay taxes.
Fact
The tax exemptions provided to Indigenous people are extremely limited. First, federal and provincial tax exemptions only apply to "Status Indians" living and/or working on a First Nations reserve. Second, some First Nations levy their own taxes. Third, when we consider that Canada has sold resources from shared treatied lands, as well as completely untreatied lands, Indigenous peoples have contributed much more than personal taxes into Canadian coffers.
The effect of taxes on markets
Myth
Taxes distort the market.
Fact
This Econ 101 idea is based on a model of the market that does not apply to reality. Real world markets do not allocate goods justly. Public institutions are essential to achieve more just allocations. Taxes have a key role to play to both redistribute income and wealth, and to fund public institutions.
The purpose of tax fairness
Myth
Raising taxes on huge corporations and the 0.1% is only useful to collect some extra revenue.
Fact
It's true that higher taxes on the ultra-rich would generate lots of revenue, which we can use for important public services like healthcare, education, affordable homes, infrastructure, the legal system and more. However, higher taxes also have a critical role in reducing inequality, which protects our democracy against oligarchy.
The popularity of tax fairness
Myth
Taxing the rich is a fringe idea.
Fact
Years ago, people assumed the rich paid their fair share. Today, most people know the rich don't pay their fair share, thanks to the wealth-defence industry, and a rigged tax system. In fact, 9 out of 10 Canadians, across the political spectrum, support higher taxes on the very rich, including closing tax loopholes, tackling tax havens, a wealth tax, higher income tax on the top tax bracket, and an excessive corporate profits tax. Most politicians now at least pay lip service to making our tax system fairer.
