The problem is Canada entire taxation system.

Put your finger on the share button get ready to share this one to your neighbours your friends, your family. It's not the amount of tax you're paying. That's a problem Canada. It's the entire taxation system. Welcome to bake some things. The first step. We are exposing it all today and everyone needs to see this. Let me tell you something Canada every politician in Ottawa hopes you never take the time to understand this episode. I promise you this because once you do understand what we're about to talk about once you see the numbers, clearly once you compare our system to other major countries, you will suddenly realize it's not just the Canada has some of the highest taxes in the world. It's that Canada has one of the most unfairly structured taxes systems in the entire developed world itself and I'm not talking about ideology. I'm not talking left versus right I'm not talking rich people bad or pay your fair share. It was quotes that we always get. I'm talking about the math behind it. The mechanics underneath what you see and the structure the quiet lever is behind the scenes that the CRA poles that squeeze every working Canadian while pretending to be fair or index to inflation or designed to help family so today we're gonna dive right into this the brand new CRA breakdown for 2026 taxes and I'm gonna show you why this is not normal. Why other countries don't do it like this they don't process taxes this way and why Canadians are being played by a tax system that looks progressive on paper when they show it to you, but an actual practice makes you poor year after year. This one isn't about tax rates folks this one is about the rigged mechanics that get you every time. Let's go welcome to bake some things. Welcome back to bake some things the first step on Chris Baker don't forget to grab your coffee your tea for this one. This is an important one folks. This one's gonna need the share button. Everyone knows Canada has high taxes. We rank among the highest in the OECD on personal income taxes for average earners, but most Canadians don't know that the real damage isn't just the rate of taxes that you pay that you see on your tax return. It's the structure that built behind those rates that causes the actual problem for you. It's the way the system is built so that benefits phase out aggressively punishing you and your family for earning more credits shrink if you cross invisible lines and payroll, deduction scale, faster than your wage actually grows it's designed this way. Inflation indexing is rigged to the government's advantage and almost no tax relief is automatic in Canada. Everything has hoops it has forms to fill out. It has clawbacks if you screw it up and it has penalties attached whether you misunderstood the terms or not this is why you can get a raise from your employer in Canada and literally feel actually poor the next day this is why people making 75 to 120 K feel more broke than ever. This is why middle class in Canada is now just a fancy word for tax donkey what we're gonna do today is we are gonna walk through all of it for you and I'm gonna make it very simple not filled with numbers not crazy terms or any government speak we're gonna talk basic so tax brackets to start especially index, but only just enough to look fair. What do I mean by that well the CRA index next year's brackets by 2% but as we know, inflation grew more than that. Inflation didn't grow 2% your cost-of-living didn't grow 2% rent groceries utilities insurance mortgages none of that group just 2%. It all grew a lot more, especially if you're part of the new mortgage renewal crisis, but magically the one number the government somehow controls grows exactly 2% and Canadians are supposed to say well thank you Mr. Kearney definitely not because we're not nobody else's like this around the world. Let me go to the US for a second compare this to the US we're bracket index and automatically adjust to actual inflation not a cherry picked calculation for example, in 2023 and 24 with inflation in the US jumped. Well, over 7% and 5% in both of those years to protect taxpayers but here the CRA uses a smooth CPI they call it a baked in understated version of inflation a smaller version of than actual inflation the benefits, one person and that person is your federal government. It's the CRA so right off the top before you weren't even a single dollar before you claim a single credit your bracket is already undervalued for the year meaning more of your income gets pushed into higher tax, brackets, and rate rates. That's the illusion here you think you're making more money but you're actually starting to make less. How is that possible? Well, we have to start with a basic personal amount credit. You see this when you sign up with your employer credit designed to disappear when you need it most the CRA is always bragging about raising the basic personal amount. They did it again for 2026 to 16,452. It sounds great until you realize the truth which is that it shrinks once you earn around 181K it shrinks for the exact people paying the overwhelming share of taxes. It is not an exemption it's a nonrefundable credit so you are exempt from nothing it lower income. Canadians actually can't fully use it because it's just a tax credit and unlike countries like Australia, where the tax-free threshold is actually tax-free and it's a clean 18,200 which is simple. Universal not clawed back not tied to a political agenda. Canada's version is a moving target every year with income tests attached to it make too much and you don't get it anymore. It's not relief. It's a coupon with a lot of fine print then we shift over to the CPP and EI you pay through your employer every year it's a hidden tax and it's a hidden tax hike, where no one is really talking about it. It's just automatic every year. We've gotta start talking about it because every year the government quietly increases CPP and EI maximum every year your deductions go up every year your take-home page then goes you guessed it down even if your employer gives you a raise now this happens even if tax rates stay the same. It's a way to get more money from you without raising your taxes. The CRA 2026 numbers prove this they make it even worse CPP maximum earnings have now rise to 74,600 EI premiums are increasing again as well and now for the third year in a row we have a second CPP tier that it now exists. It's unique to Canada. No other country does it this way self-employed Canadians they pay double the CPP at nearly 12% because they're responsible for both the employer and employee contributions compare that with the United States for example where Social Security is capped at a much lower rate for employees Medicare tax they don't even have healthcare paid for. Does it have two tears and self-employed deductions they've built offsets and credits to reduce the pain not make it worse. In other words Americans don't get crushed twice by taxes, but in Canada if self-employed, the system treats you like a spare to ATM for Ottawa and that is a scary scary thought for anyone trying to venture out on their own and start their own business and boy are you guys great for doing that now you can of course incorporate and that can make things better, but let's shift over to the child benefit maze of clawbacks that punish ambition. Here's another trick Canada uses that other countries avoid they're called stacked clawbacks now what is this? Exist, but they apply at a far higher income and our structured more predictably. Canada's child benefit is not designed to reward you as a family. It's designed to keep them dependent families and draft within certain income ranges the moment you get more ambitious and start to earn more the more they take out of that child tax benefit sorry families but now you make too much money. Let's use this as attacked what you were used to before you don't get that anymore so your income doesn't really truly grow. OK our savings vehicles RSP limits only slightly right that only goes up slightly TSA limits frozen again at $7000 for next year, but here's the real kicker with all of these. These are political numbers not economic ones if you compare the limits to the RSP's of the TSA's to say Australia, Australia's got superannuation if you've never heard of it it allows huge pre-tax contributions to your retirement in Australia. They want you to retire, wealthy in the US 401(k)s which allow nearly doubled the annual RSP limit for many workers exist today and UKISA's well their tax-free savings account essentially is C$33,000 per year. Canada is not generous Canada is highly restrictive. The government wants your money flowing to them not into your savings and this is where we lose every time and then boy boy do we smash our seniors oh my goodness with the OLAS clawbacks the senior tax trap that's built in here is really disgusting for our older generations the OAS clawback threshold for 2026 is 95,353. You'd think that's not too bad that sounds high until you realize it's not index fairly many middle class seniors cross it because of inflation and it imposes yet another invisible tax on modest retirement income most countries don't clawback their basic senior benefits at all at any level whether it's 95,000 150,000 or $200,000 but Canada does aggressively too because it needs the revenue to match the spending that our government's typically liberal end up using they need your money and that's the way they get it so how do other countries do it better? That's what you're probably sitting here asking OK Chris you've given some examples you've knocked the hell out of ours. Well, here's the part that needs to go viral in all of this other countries aren't just taxing less they're taxing smarter. They've built their systems in a much better way the United States the brackets jump automatically with inflation as we said earlier, no political math, tricks payroll taxes they're already lower anyway. Benefits aren't clawed back at every income level. They are much higher tiered and middle-class effective tax rates are dramatically lower as well in the United Kingdom universal credits for families they don't disappear. They're not disappearing credits by any income level clear simple thresholds to meet and exist, but they apply at a far higher income and our structured more predictably. Canada's child benefit is not designed to reward you as a family. It's designed to keep them dependent families and draft within certain income ranges the moment you get more ambitious and start to earn more the more they take out of that child tax benefit sorry families but now you make too much money. Let's use this as attacked what you were used to before you don't get that anymore so your income doesn't really truly grow. OK our savings vehicles RSP limits only slightly right that only goes up slightly TSA limits frozen again at $7000 for next year, but here's the real kicker with all of these. These are political numbers not economic ones if you compare the limits to the RSP's of the TSA's to say Australia, Australia's got superannuation if you've never heard of it it allows huge pre-tax contributions to your retirement in Australia. They want you to retire, wealthy in the US 401(k)s which allow nearly doubled the annual RSP limit for many workers exist today and UKISA's well their tax-free savings account essentially is C$33,000 per year. Canada is not generous Canada is highly restrictive. The government wants your money flowing to them not into your savings and this is where we lose every time and then boy boy do we smash our seniors oh my goodness with the OLAS clawbacks the senior tax trap that's built in here is really disgusting for our older generations the OAS clawback threshold for 2026 is 95,353. You'd think that's not too bad that sounds high until you realize it's not index fairly many middle class seniors cross it because of inflation and it imposes yet another invisible tax on modest retirement income most countries don't clawback their basic senior benefits at all at any level whether it's 95,000 150,000 or $200,000 but Canada does aggressively too because it needs the revenue to match the spending that our government's typically liberal end up using they need your money and that's the way they get it so how do other countries do it better? That's what you're probably sitting here asking OK Chris you've given some examples you've knocked the hell out of ours. Well, here's the part that needs to go viral in all of this other countries aren't just taxing less they're taxing smarter. They've built their systems in a much better way the United States the brackets jump automatically with inflation as we said earlier, no political math, tricks payroll taxes they're already lower anyway. Benefits aren't clawed back at every income level. They are much higher tiered and middle class effective tax rates are dramatically lower as well in the United Kingdom universal credits for families they don't disappear. They're not disappearing credits by any income level clear simple thresholds to meet and far larger tax-free savings contribution limits that allows you to actually grow your savings for retirement rather than restricted in Australia a big clean tax-free threshold we told you about a retirement system built to reward your contributions, low payroll taxes no CPP style double punishments and then you move over to Germany, strong family, benefits, that don vanish the moment you earned more there's also a system in place where it's a system designed to support upward mobility not to punish it so if you move up in your career you can actually do better on your taxes. Canada is the outlier on all of these countries. Canada is the global anomaly. Canada is the country that designed a tax system not to help you earn more, but to make sure you never feel the benefit of earning more that's why you never feel like you're doing well here that's why your boss gives you a 10 or 15% raise most people it's two or 3% probably and you don't feel like you earned anything new it's because of Canada it's because of the way we've built the tax system here Canada's tax system is built to keep you where you are. You can work harder you can get promoted. You can earn a raise, and the government will always make sure you feel like nothing changed because they want their piece of your new pie because the system is designed that the bracket doesn't grow with the real cost of living so that deductions go up faster than your wages due so that benefits get Claude back the moment you start getting ahead so that you never see the full value of your own productivity. I met someone who said they got a 3% raise, but we raised CPPE eye limits to 3% each year that erased the raise entirely and when you combine all of what I've said here today with high income, tax rates, high sales taxes, high payroll, contributions, high industrial carbon taxes, high municipal taxes, and high user fees plus levees and everything else we've talked about another episodes that are added that aren't even called taxes but truly are you have a system that looks progressive on paper, but it is absolutely regressive to the average Canadian in practice so here's my final word on this for you this morning. Please share this information. People need to understand how this text system works so that our politicians in our future politicians can change it. This isn't about where you are on the left or the right this isn't about the rich versus the poor this country. This is about a tax system the treats Canadians like livestock to be milked in slow predictable cycles. It's about a very corrupt Canada revenue agency it's about tax structure designed around government needs not around your taxpayer realities. It's about a structure that punishes ambition, punishes, productivity, punishes, entrepreneurship and punish his family other countries have high taxes too. There's no doubt, but they don't punish people all the way up Canada does and that's atrocious and until Canada and until Canadians ourselves wake up to how the mechanics of our taxes work not just the rates we're going to keep getting squeezed one year at a time while being told we should feel grateful for the systems that we have. How long did you wait the last time at your emergency room? It's time to call this what it is system built to hold Canadians down while pretending to lift them up. What do you think? Put this in the comments down below? Did you only think of our tax system before this episode as your tax rate as your tax brackets if you did, you're not alone it's designed that way so you don't notice how the other piece you can work harder you can get promoted. You can earn a raise, and the government will always make sure you feel like nothing changed because they want their piece of your new pie because the system is designed that the bracket doesn't grow with the real cost of living so that deductions go up faster than your wages due so that benefits get Claude back the moment you start getting ahead so that you never see the full value of your own productivity. I met someone who said they got a 3% raise, but we raised CPPE eye limits to 3% each year that erased the raise entirely and when you combine all of what I've said here today with high income, tax rates, high sales taxes, high payroll, contributions, high industrial carbon taxes, high municipal taxes, and high user fees plus levees and everything else we've talked about another episodes that are added that aren't even called taxes but truly are you have a system that looks progressive on paper, but it is absolutely regressive to the average Canadian in practice so here's my final word on this for you this morning. Please share this information. People need to understand how this text system works so that our politicians in our future politicians can change it. This isn't about where you are on the left or the right this isn't about the rich versus the poor this country. This is about a tax system the treats Canadians like livestock to be milked in slow predictable cycles. It's about a very corrupt Canada revenue agency it's about tax structure designed around government needs not around your taxpayer realities. It's about a structure that punishes ambition, punishes, productivity, punishes, entrepreneurship and punish his family other countries have high taxes too. There's no doubt, but they don't punish people all the way up Canada does and that's atrocious and until Canada and until Canadians ourselves wake up to how the mechanics of our taxes work not just the rates we're going to keep getting squeezed one year at a time while being told we should feel grateful for the systems that we have. How long did you wait the last time at your emergency room? It's time to call this what it is system built to hold Canadians down while pretending to lift them up. What do you think? Put this in the comments down below? Did you only think of our tax system before this episode as your tax rate as your tax brackets if you did, you're not alone it's designed that way so you don't notice how the other pieces of the system work think about it. This way you get a raise like I mentioned that person getting a 3% raise here's your 3% raise. OK now your taxes didn't change. You didn't change tax bracket so your same taxes in theory you're making more than you're making 3% more however when the government at the beginning of each year goes 1 to 3% higher on your CPP and EI limits especially if you're somebody where your brackets have exceeded and saying June August October whenever it is and you're finished with CPPNEI if that also went up two or 3% then you've lost most of this race again and in which case you're right back where you started welcome to Canada and that's only CPP in the eye. I'm bringing up that you talk about you changed salary. Let's also take away some of your child tax benefit now you've got increased CPP at EI you've got a deduction or a reduction of your child benefit now you're 3% raise is -2%. That's how it works. That's scary. Let's talk about it in the comments, thanks for watching based on things don't forget to like subscribe of course as well and of course, please share this video. Let's get this out there. Our tax system is messed up. All right we will leave it there. We'll see you this afternoon on the last word have yourselves a wonderful Thursday. We'll catch you later today.