Ontario's Tax on the Rich: Grasping at Straw Men

Alexandre Laurin
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Alexandre Laurin: C.D. Howe Institute

No 135, e-briefs from C.D. Howe Institute

Abstract: Ontario’s new “tax on the rich,” which was introduced in the 2012 Budget, affects 25,000 high-income earners and their families. These families matter a lot for the province’s fortunes: about one of every five income tax dollars in Ontario already comes out of their pockets. Ontario’s personal income tax system already redistributes more income than most other provinces. The province’s top 1 percent of earners shoulder more than one-quarter of all income taxes, while the bottom 75 percent shoulder about 12 percent. The new tax on high-income earners will likely create more economic costs than benefits: taxpayers’ behavioural responses will reduce revenue over the long run by more than the province can expect to collect from the tax hike.

Keywords: Fiscal and Tax Competitiveness; Ontario (Canada); tax increase; personal tax rate (search for similar items in EconPapers)
JEL-codes: H24 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2012-06
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Published on the C.D. Howe Institute website, June 2012

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