Column: Progressive Views – The Inequality Problem

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.

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16 Comments

  1. Spoken like a true student. Why not try the opposite side of the coin? Go out, start your own corporation and make it successful. Keep your eyes on the amount you pay in expenses, and tally up all the extra benefits our society receives from those expenses. Start with payroll and utilities, insurance and logistics; realize how many other people rely on you as a customer and payee, before a dime goes towards tax. If at the end of the year you’ve actually managed to show a profit and wish to reinvest to grow the business and create more jobs, first remember how important it is to pay even more to the gov’t so that you are doing your part.

    Seriously, before spouting off about those evil corporations, before regurgitating the nonsense that our corporate tax rate raises won’t “actually” hurt business, put some real effort into your opinions. Your article is so one-sided that not only does it seem you haven’t consulted with any of the evil 1% before writing it, but you seem to think it’s impossible for a different point of view to exist. One of Canada’s greatest assets is its existence as a haven for free enteprise, where people can succeed or fail without too much interference from gov’t. Higher tax rates placed upon producers will, over time, reduce the amount of production Canada experiences, in whtever form you wish to measure it. If suddenly corporations had their income tax rates reduced by 50% in Canada, not only would we see thousands of businesses move INTO the country, but you’d also see tens of thousands of new businesses start up. What would be so bad about that?

  2. John that was a great comment.

    As someone who is under 30 and working in the corporate world I can say the view of today’s youth is sad. Rather than getting an education and working hard many prefer to sit around and complain about the lack of social welfare and funding. Too many people want to sit at home and make money off the 1% by receiving free handouts instead of striving to become the 1% and having a successful career.

  3. This article was spoken from a very naive and inexperienced point of view. Wow. If I work my butt off to be a success, why on earth should I be forced to fund everyone else? If the author of this article chooses to be a success, I most certainly would expect him to fund me!

  4. Wow, some very harsh words for the author of this article. I think the reason that most of us spout these negative things about the “youth” attitude today is because we heard the same things from our parents, and the generations before us. Isn’t it funny how life turns around and we become our parents!
    What I find amusing about these criticisms? I was working in a part time capacity at the age of 13, and not very many of my peers were doing the same. Today, I observe much of our youth working for peanuts in fast-food restaurants, serving up burgers and fries for you overweight people who are too lazy to cook a meal.
    Jeff and Bonnie, what the author is pointing out, in part, has nothing to do with the youth. I didn’t read any claim that he was representing the youth of today, so the commentaries describing today’s youth as being lazy and uninformed have no bearing on his opinions.
    There is some truth to what he is saying. The rich are getting rich, and the middle class in North America is shrinking. There is no arguing with the statistics.
    The author is obviously slanted towards the socialist/liberal side and he’s entitled to his opinions regarding government policies, some of which I don’t necessarily agree with. Yet I am not about to reduce his opinions to meaningless trash because he is young and inexperienced.

  5. Christine, we aren’t in the 1% of top wage earners. Well. I’m not. But should I ever achieve (not “be given” but “earn”) that point, my “fair share” of taxes should be the same as yours. That’s the reason for the word “fair”.
    Harper is the only PM in recent memory with some idea of what a budget is, and how international trade can help our country. So far as “harmful economic policies” go, this author seems to be hoping for the debt-heavy days of Trudeau and Chretien with no regard for how our children will pay for it all.

  6. No, then you must be the disappointingly large population of Canadians that thinks breaking in to that 1% is an attainable task. Do you honestly think that the Canadian middle class doesn’t work hard or have good quality educations? I know a lot of hard working Canadians who wouldn’t think of “sit[ting] at home and mak[ing] money off the 1% by receiving free handouts” and still struggle to make ends meet for their families…I’m sorry who are the naive ones?

  7. Hey John,
    Your point is pretty unfair, the author is talking about income taxes for the top 1%; in Canada the majority of income is from salary not from returns to capital. This is a kind of sleight of hand so that the salary is considered an expense for the business and isn’t included in income tax so it is up to the business, owner or board depending on the organization of the business, what salary to pay; the bigger the pay the less money to reinvest, right? Once the salary is paid it shouldn’t matter to a business what the income tax rate is, the money is already gone and has no effect on the business.

    As to the corporate income tax rate, you contend that because the business has spin off benefits it shouldn’t have to pay it’s own taxes. This completely ignores all of the benefits a business gets from public goods. The business doesn’t usually have to build it’s own roads, it doesn’t have to create a fire department or law enforcement. All of these things are used by businesses and the tax is just paying for those services. You don’t ask the local barber to cut your hair for free and tell him it’s okay because you’re a job creator, you shouldn’t do it to the police either.

    Note, the corporate tax rate in Canada is already below 50% so we can’t actually give them a 50% tax cut.

  8. I have to wonder if any of the previous posters actually read his column. There’s nothing in it to suggest he’s against capitalism or the free market economy. I don’t see where he’s “spouting off about those evil corporations” as John alleges. His beef is with government policy. As for John’s assertion that “If suddenly corporations had their income tax rates reduced by 50% in Canada, not only would we see thousands of businesses move INTO the country, but you’d also see tens of thousands of new businesses start up.”, do you actually have any evidence for that, or did you just make it up? It’s a pretty simplistic view. There’s a lot more to consider before starting or relocating a business to Canada than just tax rates. Like the climate. That’ll keep a lot of foreigners away no matter what the tax rate is. Then there’s Jeff’s rant about young people in general. Now I don’t know who his friends are, but since he’s “someone who is under 30” perhaps he has more interaction with the “Too many people (who) want to sit at home and make money off the 1% by receiving free handouts instead of striving to become the 1% and having a successful career.” than I do. My experience with the latest generation of young adults, as the parent of a couple, and through interaction with their myriad of friends, is that they are as hard working and goal oriented as any other generation. They all either work or go to school. Of course they know of teens and young adults that go bad, so to speak, but that is by far the exception and not the rule. I have never heard a single one of them ever express the opinion that they thought they should be able to live off the government or the rich. As for the last comment, first, the article wasn’t “spoken” from anything, it was written. Second, nowhere in his article does he express the view that any individual should be “forced to fund everyone else.” Third, success isn’t something you choose, like a pair of shoes. If you’re honest and work hard (that in itself is a kind of success) you may end up successful or you may not. There’s always factors beyond your control. And lastly, I assume you meant to say “wouldn’t” expect him to fund you. How righteous, but I have the feeling that if you really needed it he wouldn’t mind at all.

    • I won’t speak to Tristan Turner’s latest column or my opinions on it.

      I will say this.

      Mr. Turner is a 15-year-old Morinville Community High School student who approached me some time back and asked if there might be a place in our publication for a political column on progressive issues.

      I was quite impressed to see a young man who could not only write well but desired to write regularly…and turn it in by deadline.

      While I’m certain many commenters on this latest column are filtering in here via Twitter or the like, Mr. Turner’s articles are well received in our community. Many disagree with his politics, but many people are impressed to see a young man thinking about something a little more than the release date for the next video game.

      In a world where young and old are limiting their deepest thoughts to 140 character dissertations, let’s be thankful for a young cat who can bat out a 600-plus word article whether we agree with his politics or not.

      Stephen Dafoe
      Editor – The Morinville News

  9. I may not always agree with everything Tristan has to say but you have to give him credit for putting his views out there for the world to see (and most certainly trash if they don’t like them)and for speaking his mind on sometimes very sensitive social issues.

    Tristan, I may not like everything you have to say but I certainly hope you don’t stop speaking your mind in such a well though out and insightful way. Perhaps future readers will stifle their hateful comments, and perhaps not, but don’t let that stop you.

  10. Tristan,

    I encourage you to keep writing as you are very articulate for a 15-year old student. Never lose that. But you also need to be more aware of the reactions you will cause when you write. Go too far to one side, you will be branded radical and ignored or even worse, pilloried. Too far the other way, well then you are part of the herd. Strike a balance by showing both sides and persuade that you’re right. Don’t try to hit me between the eyes with a ball peen hammer until I agree. Reaction is good. Reactionary is bad in my books.

    Kidding aside, you must be very wary of using statistics and who you quote. Where did you get your stats from? Who said Canada is economically evil? Don’t be afraid to tell us as it lends credibility to your article. People use numbers to tell a story. Their story. You must take your sources into account and be aware of what axe the writer has to grind.

    As a person who has travelled a bit, I can tell you firsthand that while Canada may be “among the most economically unequal democracies in the world, and this reality is increasing at a startling rate,” our country also has many good systems in place to help those who need it. People in Afghanistan, Bosnia, Serbia, Mexico, Dominican Republic, Bosnia and other countries, rely on largely on family, handouts and nothing else.

    I’m all for equal taxes, but there comes a point where if you hit the 1% too much, they leave for tax havens like Monte Carlo or the Grand Cayman Islands. Like writing an article, it is about finding an acceptable balance.

    Good luck!

    PS Did you ever hear back from Mr. Storseth??

    Brent

  11. the wealth gap in canada IS worsening. to believe otherwise is stupid uneducated foolish and brainless. greed is running the show here and you cannot prove the contrary.

  12. Tristan,

    Write what you want, believe what you want, stand for your convictions. Its younger folks like you who will replace old fools like me.

    Some will agree. Some will not. Some will be quite vehement about it. However the future belongs to the youth, so don’t let old fools beat you down.

    We were all called silly idealists at one time or another.

    Carry on carrying on Sir.

    Regards,

    Thomas Kirsop

  13. Brent, I thank you for your comments, along with all of those who have commented on my piece. I am strained by the 600 word limit, in many cases I am unable in such a small space to encompass many of the arguments often made against a position I am taking in a way that serves them justice.

    I do touch on alternate perspectives as much as I can whilst still being able to have all of the content for my argument that the piece required. Additionally, I feel that living in central Alberta, arguments against progressive taxation are prevalent, so I felt it necessary to shed more light on an alternate perspective that is seldom given the time of day.

    As for my statistics, they were made available through the OECD (Organization for Economic Co-Operation and Development). Additional facts were pulled from the recent Report on Canadian Inequality done by the Broadbent Institute which sourced Statistics Canada for much of its findings.

    Thank you all for the captivating discussion.

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