By Tristan Turner
Canada is not an equal society. Today, the top 1% of income earners receive 14% of all income in Canada, and the trend is increasing rapidly. Over the past 20 years, for every $1 increase in national earnings, 30¢ have gone to the top 1% of income earners and the remaining 70¢ was shared between the bottom 99% of income earners in Canada. In fact, from 1982 to 2004 there was no increase (when factoring in inflation) in the incomes of the bottom 60% of Canadian income earners. This shows that economic growth actually has not directly benefited the majority of Canadians over the past few decades. What ever happened to our children having it better than we had?
Canada is among the most economically unequal democracies in the world, and this reality is increasing at a startling rate. So, why is this a problem?
Well, inequality undermines the success and well being of a society in nearly every way imaginable. The more unequal a society is, the worse it performs in health outcomes and life expectancy for the whole of society, the success of children in the education system decreases, crime levels increase and the amount of economic and social mobility decreases. In almost all realms of society, inequality creates severe problems, and not just for those at the bottom of the social ladder. We cannot create better society for our children if poverty and mass inequality remains a major issue going forward.
Inequality can be addressed in myriad ways, and there is no one-step solution to this enormous issue. However, there is one necessary change that would directly address much of the broad issue of economic inequality; Increasing tax revenue from the greatest income earners and large corporations to improve our investment in our equalizing social programs. It is vital that the wealthiest among us contribute more to mass social benefit. Not only will it improve the lives of those directly benefiting from access to essential social programs, but it will also create a more inclusive and healthier society for all places on the social ladder.
By and large, current government policies are to blame for a large portion of the economic inequalities in Canada today. Since the Harper government gained power and for many years since, corporate and top-tier income taxes have been lowered significantly, and as a result, middle class families and the poorest members of our national economy have been bearing a greater tax burden. Many say that cutting high income taxes and decreasing taxes on corporate profit incites private sector job creators to invest in the Canadian economy and remain integrated into the Canadian economy, rather than setting up shop somewhere else.
However, the reality is that there is no connection between an increase in high income taxation and a fleeing of high income earning Canadians, or a decrease in levels of investment. As well, our corporate taxes are far lower than necessary to be competitive to corporate investment, as we hold some of the lowest corporate tax rates in the western world, resulting in billions of tax revenue potential being lost.
The trickle down economic strategy of this government does not benefit the vast majority of Canadians. Going forward, Canada needs federal policy that will make Canada’s prosperity work for everyday Canadian families by ensuring the wealthiest among us pay their fair share in income tax.
Nations that have utilized decisive policies to deal with economic disparity have delivered some of the greatest improvements in quality of life and economic stability, as seen in much of Scandinavia. As Canadians, we deserve far better than the harmful economic strategies of the Harper government.