Surprisingly enough, the rich actually are paying their fair share.
Well, according to the recently released Tax Review Report commissioned by the provincial government.
The problem preventing tax fairness is that the straight numbers — as usually interpreted — say the system is already fair.
It isn’t, but if you judge strictly by numbers, it is.
The committee that produced the Tax Review Report conducted a survey of Newfoundlanders. Asked whether the province’s tax system is fair, 51.5 per cent of respondents answered, “No.”
Asked why they think the tax system is not fair, 28 per cent of respondents said higher income earners should pay more and lower income earners should pay less; 14 per cent said middle income earners pay too much.
Wrong, wrong and wrong, according to the report’s numbers.
In 2016, there were 437,305 tax filers in Newfoundland. Their total income was approximately $18.3 billion. They paid an income tax total of $1.4 billion to the province.
In 2016, there were 3,738 Newfoundlanders lucky enough to pull in an annual salary of more than $250,000. Collectively, they earned about 6.5 per cent of the personal income in the province, but paid 10.3 per cent of the personal income taxes collected by the provincial government.
People earning $100,000 or more per year accounted for 27 per cent of total personal income in the province, but paid 40 per cent of personal income taxes collected by the provincial government.
In contrast, the lazy rotters at the other end of the scale, i.e., those earning less than $100,000 annually, accounted for 73 per cent of total personal income, but paid only 60 per cent of the income taxes collected by the provincial government.
It would appear that the New Democratic Party, the labour unions and federations, and various sundry lefties have been rowing without a paddle. The rich are already paying more. The well-off are already paying more.
The numbers prove it. Contrary to the assertions of a handful of leftists and thousands of disgruntled whiners, it is the average Joes and Janes who are not pulling their own … wait, maybe the numbers can tell us more.
Tax fairness isn’t about percentages paid. It’s about dollars left over after taxes are paid.
The Tax Review Report reveals the median income in Newfoundland is about $30,000. About half the tax filers (222,000) had an income of less than $30,000 per year, and about half (215,000) had an income of $30,000 or more.
People earning less than $30,000 per year accounted for 19 per cent of total personal income ($3.5 billion) in the province, but paid a mere four per cent of the income taxes collected by the provincial government.
Clearly, obviously, indisputably, the poor are not paying their fair share!
Although, the above is a fine example of the old adage that there are “lies, damned lies and statistics.”
The years-old angst about government debt and annual budget deficits is skewed in favour of the rich and the well-off because public discussion about income taxes is limited to straight numbers and percentages. According to Premier Dwight Ball and others in powerful positions, upper earners already pay plenty.
But tax fairness can’t be achieved via arithmetic and percentages. Tax fairness isn’t about percentages paid. It’s about dollars left over after taxes are paid.
The value of a dollar is relative. A loonie means more to a $30,000 earner than it does to a $100,000 earner.
The former has $28,000 left after taxes; the latter has $88,000. Sending a kid to Memorial University for a year, for example, will cost a $30,000 earner 11 per cent of their after-N.L.-tax income; it will cost a $100,000 earner only three per cent.
Politicians can’t, and won’t, solve the deficit/debt crisis because they think taxes are only about numbers. But tax fairness is a value judgment, not a percentage. Tax fairness would require people to show magnanimity toward their fellow citizens, a rare commodity in today’s society.
Brian Jones is a desk editor at The Telegram. He can be reached at email@example.com.