I was reading "Discours de la Servitude Volontaire" (Discourse on voluntary servitude), a very old book written by a 18-19 year old "Étienne de la Boétie" who discusses basically why people obey and serve.
My interrogations began when I went for a dental cleaning. The hygienist spent a whole hour with me. The dentist saw me at most I'd say a minute.
The hygienist makes 60,000$ per year, of which the government will rob $20,000 "at source." This leaves her with $40,000 per year, or a bit over $3,300 net per month.
The dentists makes well over $500,000. Of course, it's considered business income, so it is taxed at 8% maximum (if it is taxed at all). He can of course pay himself a dividend, which is not-taxed for the first $60,000 (our lady's whole salary), and then at half the rate that lady's income. With a huge tax credit and really no deduction.
Still too high? Go for capital gains, deduce everything, and you will pay 10-15% taxes.
And I got to think: how exactly is that fair? First, how is it fair that the dentist makes so much more than her? Who would accept to work for 10% of the salary of their coworkers? Yes, dentist requires more skill, more studies, more education, and comes with risk. Yes you have to diagnose horrible stuff from time to time and if you mess up, consequences are bad. But is it really worth 10 times the salary of that hygienist?
With huge tax benefits? I'm a teacher and I net around the same amount as that hygienist. I also have university education, and I teach kids, which should be important (it's not but whatever).
Is what this dentist doing worth really that much more than me?
I don't understand. It must be pretty humiliating to look in a mirror and think "I am worth 10% of that person." And I'm not talking about a top-tier, elite programmer or engineer. And to make it worse - you have to give half your income as taxes anyway!
Why, why do people accept that? What's the point? You live like shit while the rich (and dentist is chump change in terms of rich people) enjoy life and laugh at you.
Is this really what life is about?
And by the way, it would be one thing if life was at least pleasant and government offered good services. Every single governmental service is junk. I work at a private school, and you can bet all rich people send their kids there. Why, if public school is so good, do they do that? Same for medicine, supposedly free - all rich people go to private clinic.
I tried to go the ER once. 18 hours of waiting, to get prescribed a tylenol. Gas is a real fortune, public transport shows up 50% of the time on a good day, roads are garbage, homeless are everywhere (masturbate in metro), food is so expensive a steak is a pipe dream for me, they took our guns away for no reason, now they ask for ID to go online the UK, they are about to censor the whole internet...
... and people just, like, passively accept that? "No problem sir, here's half my income so you guys can get another 30% raise (true story!). Do you need more?"
Why?
Like our hygienist - doesn't she feel humiliated doing 90% of the job and earning 10% of the salary - and then having a third (at best) stolen? Doesn't she feel like she's wasting her life, a subhuman, inferior, useless? At least as a teacher, I can pretend I do something that matters. It's a lie of course, but I can say "i help children grow up, I make a difference." And even there, no one at that school makes 10 times my salary, only the CEO earns 3-4 times at most (private school).
I don't get it. In "Discourse of voluntary servitude", La Boétie says it'S basically a) habit b) pleasure. That people get accustomed to be water carriers and slave from a young age. And that governments use pleasure to control people. But ultimately, he claims people are the most responsible for their situations. Like Orwell in 1984, when he says the pleb could always rebel and overthrow the regime, but never does.
I hate this world. Sigh.
Someone said OP is a leaf, so we'll go with that. OP also said "dividend," so we'll assume the practice is incorporated as a professional cooptation. OP's claims don't seem correct.
Basically, the reason the dividends are taxed at a lower rate is because they were already subject to corporate tax. Salary is taxed harder on the individual but deductible from the corporates tax as a business expense. Sounds like it's roughly a balance in total tax contributions. Another possible benefit to the dividend is maybe no forced contribution to the mandatory retirement program (because the shareholder/employee distinction? I'm not going to go that deep down the rabbit hole.
True, but slightly misleading. In some provinces, with NO other income, with the right type of dividend, within specific value limits, then yes. Also, that's after corporate taxes, so even in the "not-taxed" case it's been taxed by the feds and the province once already.
This is based on very brief reading, so I'm not 100%.
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html
The normal cooperate tax rate is 38% + whatever the province sticks on top of that. Canadians are being raped in taxes. But for a Canadian-controlled private business, qualifying for a small business deduction, then it drops to of 9%-12.2% up to the $500k OP precisely chose as an example. After that it jumps substantially. Same with the number they picked for the $60k dividend.
I have two dentist friends and they each net 30,000-40,000$ a month. They don't even do advanced surgeries...
Car is paid by business, vacations paid by business, they even deduce part of their home insurance/electricity/insurance. With all due respect - your knowledge of canadian tax law is very, very limited.
Per dentist.
Not sure about the rest you posted. No businesses in Canada pays anything close to 38%. And fyi, a business is either incorporated in a province OR federally, not both.
If the business is making more than $500k, a substantially higher rates kick in, according to that link from the Canadian Government at least.
I don't know much about the subject, but basic research indicates you know less. Look up any business tax guide for Canada. Have one from a Canadian accounting firm. https://accountor.ca/blog/taxation/corporate-tax-rate.html
"But I only said they weren't incorporated in both. I didn't say they weren't taxed by both." Then that comment is a non-sequitur because you were implying it.
But you're right. 38% is the basic rate on paper. Then they modify the hell out of it with various special treatments. Normal small business federal rate seems to be 9% up to 500k.
In all due respect, you don't know what youre talking about.
You are being taxed on PROFITS, NOT income. And you can deduce a TON of epenses as a business.
Stop doing a chatgpt3.0 and linking very basic (and useless) general websites, stfu, and just admit you lost.
For instance, salaries are DEDUCTIBLE from a business income (like most expenses)
Wow! Who knew. Let me check my original post:
Oh, you got me!
Edit: Wait just a second. I didn't see it sooner. "Canadian," illiterate, unjustified self-confidence... saar, why are you posting here saar! Right now you must be do the needful!