Surtax
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| Taxation |
|---|
 |
| An aspect of fiscal policy |
A surtax is a tax levied upon another tax, also known as tax surcharge.[1]
Canada
The
provincial portion of the value-added tax on goods and services in two Canadian jurisdictions, Quebec and Prince Edward Island, was formerly calculated as a surtax on the sticker price plus the federal Goods and Services Tax. On Prince Edward Island, provincial sales tax was assessed at 10% on top of the federal tax (as of 2013) of 5%, resulting in a total effective rate of 15.5% at the time of its repeal.[2]
The Quebec Sales Tax was 9.5%, also assessed on top of the federal tax of 5%, resulting in a total tax burden of 14.975; it, too, was changed in 2013 so as no longer to be a surtax.
United Kingdom
In 1929, the supertax (which had been introduced in the
income tax
in 1973.
| Year | Income tax | Surtax | Total |
|---|---|---|---|
| 1939–40 | 29% | 41% | 70% |
| 1944–45 | 50% | 48% | 98% |
United States
Previous examples of a broadly-levied surtax in the
Lyndon Johnson administration. It essentially consisted of calculating one's ordinary federal income tax
liability and then adding another 10% to it, the amount of the surtax.
As the US income tax system at the time was highly
progressive
, the surtax was much higher on those with higher incomes, as a 10% surtax imposed on a tax rate of 20% would result in an overall rate of 22%, and the same surtax imposed on a rate of 50% would result in an overall rate of 55%.
Some antiwar protesters refused to pay the tax and stated that while they were not
anarchists and understood the need for and the positive role played by government in many areas, they wanted none of their tax money going to a war that they felt was immoral.[citation needed
] The surtax was repealed well before the Vietnam War ended.
Surtaxes can be imposed on other taxes. They are usually imposed on the grounds of moral justification, as they affect only persons who are already paying taxes, rather than extending taxation to new areas or persons who are not previously being taxed.
A surtax of 4.3 percent was recently proposed by Congress on incomes over $500,000 to alleviate the alterations to the
Alternative Minimum Tax code in the United States.[when?
]
A surtax was proposed as part of the 2009–2010
health care reform in the United States.[4]
See also
References
- ^ "What is a Surtax?". Investopedia. Retrieved 4 May 2021.
- ^ https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/tax/ca-en-tax-2013-2014-prince-edward-island-budget-highlights.pdf [bare URL PDF]
- ^ "[ARCHIVED CONTENT] HM Revenue & Customs: Taxation: World War II and PAYE". The National Archives. Archived from the original on 2013-06-05. Retrieved 2014-01-25.
- ^ Donmoyer, Ryan J. (2009-07-07). "U.S. House May Include Surtax on Wealthy in Health-Care Package". Bloomberg. Retrieved 2014-01-25.