Progressive income taxes cut while regressive taxes climb

Re: Lowest earners pay almost no income tax, Letters, July 10

Sandy McFarlane points out that the progressive income tax system works to the benefit of most Canadians.

As 50 per cent of Canadians pay only four per cent of all income taxes collected, the average Canadian certainly benefits from this efficient redistribution of wealth that creates a cohesive, healthy, peaceful and just society.

It should also give you second thoughts when the Fraser Institute attempts to convince you the average Canadian is “working for the government” until some time in June.

There is unfairness in the tax system, though. The wealthy can take full advantage of tax havens ( legal and illegal), loop holes and deductions; they max out on RRSPs and tax- free savings accounts while most Canadians are able to take scant advantage of these tax breaks, if at all.

The wealthy are by far the biggest beneficiaries of capital gains, and half of that windfall isn’t taxed one bit. The wealthy pay a far smaller portion of their income when it comes to payroll taxes, medical service premiums, government service fees, tolls, etc. Note these sort of regressive taxes are the ones that are rising, often dramatically.

Meanwhile the much- touted historic income tax cuts of 2001 have been a boon to taxpayers, but the vast majority of the money government has given up has accrued to a small minority. You know, the deserving few who make big bucks and have seen their incomes grow dramatically in recent years, like CEOs. So, yes, there is room for improvement in the tax system. CHRIS ANDREWS Vancouver