What do you think the implications would be if Canada were to implement more tax brackets? For example, if federal tax tiers were added at $200k and $300k with a federal rate of say 33% and 37% respectively?
I'm not sure why the government hasn't gone in this direction because the majority of voters are not anywhere near these levels. This would help redistribute the tax burden and work down more of the country's debt.
It's always tempting to tax the rich more. This idea isn’t new. In fact, back in 1963 Quebec's top marginal tax rate was over 93%!. This rate applied to income over $400,000 (the equivalent of about $2.9 million today).
Chris's proposal is certainly a lot less punitive, but it still represents a significant tax increase for wealthier people. However, the world is a much different place than it was in 1963. The wealthy have much more freedom for where they choose to live and where they produce their income. So, even if you believe in taxing the rich more, many of them have the ability to simply leave the country if they can find a better tax deal elsewhere. I don't know whether this exodus would be large enough to make a big difference, but it is something to keep in mind.
As an example of a wealthier person who chose where to live based on tax considerations, a former colleague of mine with a large number of stock options chose to live a few years in a country that didn't tax his stock option gains. Once he satisfied the rules for having been out of Canada long enough to avoid paying Canadian taxes on the income, he came back.
Another thing to consider is that people who are able to get themselves into a position to earn large incomes also tend to have the savvy to influence the political process. So, even if taxing the rich more is the right thing for the country, the wealthy people who would be affected are likely to mount an effective opposition to this change.
Deciding exactly how much to raise taxes on the rich without causing undesirable side effects is a difficult question that I can't answer.