These are stories Report on Business is following Friday, April 11, 2014.
Really, it's not that bad
You know those feelings you get when you look at your pay stub and see how much you’re being taxed? Those feelings that range from distress to fury?
First, thank your stars you’re not in Belgium.
Then look at today’s OECD study on income taxes, and see where Canada ranks. If you’re like me, you might be surprised.
The Organization for Economic Co-Operation and Development found that the tax burden on labour income, or the so-called tax wedge, rose across the rich countries last year as governments scrambled to fight budget deficits in the post-crisis era.
What’s notable is that Canada is well down the list, and that the rise between 2009 and 2013 lags the average increase in the tax wedge, described as the difference between employer labour costs and take-home pay. The OECD calculates this by adding up personal income taxes, social security contributions and payroll levies, then subtracts benefits expressed as a percentage of the labour costs.
Among 31 countries, Canada is down at No. 26, with the burden for an average work at 31.1 per cent, compared to the OECD average of 35.9 per cent.
The study looked at the burden on several levels – from the average single worker to couples with and without children – and found that the burden on a single average employee rose 0.6 of a percentage point between 2009 and last year.
That compared to the OECD average of 0.8 of a point.
It’s interesting, too, to look at what happened before the financial crisis and global slump.
Between 2000 and 2013, the wedge for the single average employee declined by 1.8 percentage points, to the 31.1-per-cent level of last year from 32.9 per cent.
That was far faster than the OECD average of 0.8 of a point, to 35.9 per cent from 36.7 per cent.
Over all, the wedge climbed in the last three years in 25 of the 34 nations “as countries reduce the value of tax-free allowances and tax credits and subject higher proportions of earnings to tax.”
The fastest rate of increase last year alone were in Portugal, the Slovak Republic and the United States.
The highest for the average single person were in Belgium, at 55.8 per cent, Germany, at 49.3 per cent, and Austria, at 49.1 per cent.
The lowest were in Chile, at 7 per cent, New Zealand, 16.9 per cent, and Mexico, 19.2 per cent.
Not that you can file your taxes, anyway.
The Canada Revenue Agency’s online filing system is shut down because of the Heartbleed threat, so the deadline has been pushed back.
Not only that, the shutdown has now spread to other Canadian government departments until fixes can be put in place.
Late yesterday, the government’s chief information officer ordered all departments that could be affected to disable their website as a “precautionary” move.
“The Heartbleed bug is affecting many global IT systems in both private and public sector organizations and has the potential to expose private data,” according to a government statement.
“We understand that this will be disruptive, but, under the circumstances, this is the best course of action to protect the privacy of Canadians,” it added.
- More federal websites shut services over Heartbleed threat
- Shane Dingman: How the Heartbleed bug works, and what passwords you need to change
JPMorgan shares are sinking today after its quarterly results fell short.
The Wall Street giant’s first-quarter profit slipped to $5.3-billion (U.S.), or $1.28 a share, from $6.5-billion or $1.59 a year earlier.
Revenue sank 8 per cent to $23.9-billion as securities trading results were hit.
“JPMorgan Chase had a good start to the year, given there were industry-wide headwinds in Markets and Mortgage,” chief executive officer Jamie Dimon said in a statement as he unveiled the bank’s earnings.
“As I said in my letter to shareholders this week, we will dedicate extraordinary effort in 2014 adapting to the new global financial architecture, and we will continue to make significant progress on our control agenda,” he added.
Wells Fargo & Co., on the other hand, beat expectations, posting a jump in profit to $5.6-billion, or $1.05 a share, from $4.93-billion or 92 cents.
- JPMorgan profit misses the mark, sinks 19% as trading revenue drops
- Wells Fargo profit rises 14% as costs fall
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