With a $2,000 income, an $8,000 net worth and more than 100,000 square kilometres, Canada’s richest 1% have the most money in the world.
But as the federal government’s income tax rate increases and the government takes on more debt, a new study suggests the country’s wealthiest will soon find it harder to pay their taxes.
The annual study, released Thursday, finds the rich are paying an average of 6.7% of their incomes in taxes, about the same as the top 1% of earners.
The report, which looked at income, wealth and tax rates across the country, found the average tax burden for the 1% fell to 9.3% in 2019 from 12.5% in the previous year.
But the top 10% of Canadians, who have more than $100 million in assets, paid an average 6.9% in taxes.
Among the top one per cent, it fell to 5.4%.
The top 0.1% of income earners paid an annual average of 4.6%.
The report said the federal tax burden is set to continue increasing at a rate of 6% per year through 2040.
A spokesperson for Prime Minister Justin Trudeau said the Liberals are committed to fairness for all Canadians and will not lower the federal income tax rates.
“Canada is the envy of the world for how well it has managed the burden of taxation,” said Catherine McKenna, a spokesperson for Trudeau.
“The Government of Canada continues to work to reduce taxes on the rich and middle class.”
The study found that Canadians with an annual income of $1 million or more pay an average tax of 4% on $5 million in income.
For the bottom 20% of families, the tax rate is 6.4%, while the top 20% pay an effective tax rate of 5.8%.
The authors of the study said they expected that the top earners would be paying more, because of changes in the way tax is collected.
The top 10 per cent pay an annual tax rate that’s 12.4% on their average $50,000 annual income, compared to 6.2% for the bottom 10%.
The researchers said it’s not clear whether the higher tax rate will have a negative impact on income inequality.
“It is not clear how the top income tax cut will have an impact on inequality, and we do not yet know whether this change in the tax regime is expected to have a material impact on the overall income distribution,” they wrote.
A study from the Canadian Centre for Policy Alternatives found that tax breaks for the wealthiest Canadians are concentrated in the top marginal tax bracket.
The authors said the changes will increase inequality and that they were worried about the effects of the tax cuts.
“Inequality of wealth and income is increasing.
We are seeing it in Canada.
If this tax break is extended and extended, we can expect it to grow and to become increasingly concentrated,” said David Macdonald, executive director of the Centre for Economic Policy Research.
“That’s not what Canada is all about.
The goal of Canada is to be a place that’s open for everyone to make a contribution.”