Taxing High Incomes in Ontario

It is notable that the scale of  Ontario’s ostensibly dire fiscal position did not prompt any major response on the tax side, beyond postponing planned reductions to the corporate tax rate.

The government could have raised taxes on high income earners as at least a token of solidarity with everybody from social assistance recipients  to public sector workers who is being asked to accept cuts to their real incomes.

Instead, they introduced a new deductible for drug costs for high income seniors. Those who earn over $100,000 will pay a $100 deductible, plus up to three per cent of their income over the $100,000 mark. Couples with an income over $160,000 will pay a $200 deductible and up to three per cent of their combined income over $160,000.

I fail to see a principled rationale for what is effectively a high income surtax, targeted exclusively on seniors with large prescription drug bills.

If the aim is to address the deficit by raising revenues, why not levy a surtax on all high income households? If the aim is to reduce drug prescription costs, why not take measures to further control drug costs across the board?

3 comments

  • Andrew: Agreed, this does seem a strange group to pick on. Perhaps they are afraid the younger rich will go elsewhere. They should consider a recent publication by Jeffrey Thompson of Umass Amherst that shows the rich more or less stay put even if you raise their taxes.

  • well it was a banker’s budget….

  • You’re looking for a “principled rationale” from Dalton McGuinty’s government? You may have to look for a while…

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