Liberals and the One Percenters
Canadians elected a majority Liberal government yesterday. And the first order of business for the new government?
We will give middle class Canadians a tax break, by making taxes more fair.
We will cut the middle income tax bracket to 20.5 percent from 22 percent ”“ a seven percent reduction. Canadians with taxable annual income between $44,700 and $89,401 will see their income tax rate fall. This tax relief is worth up to $670 per person, per year ”“ or $1,340 for a two-income household.
To pay for this tax cut, we will ask the wealthiest one percent of Canadians to give a little more. We will introduce a new tax bracket of 33 percent for individuals earning more than $200,000 each year.
Fairness is a bit of a stretch in terms of taxation policy. The top 1% of income earners paid over 21% of total federal and provincial taxes in 2010 — and their taxes went up since then — and the top 10% paid almost 55% of all taxes in the same year. The bottom 50% of Canadian income earners contributed only 4%.
Just who are Canada’s one percent?
Yes, there are the bank presidents and corporate CEOs. But they are a small minority ”” they are the 0.01 percent, the “plutocrats” of Chrystia Freeland”™s Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. So who are the others? There are many 1 percenters in the sectors providing services to business, such as accounting and consulting. There are many from the professions ”” law and medicine. The lawyers will most likely be mid to late career, in large firms. Most judges are in the 1 percent. The doctors will be specialists rather than family practitioners. The 1 percenters are the senior administrators of our hospitals and our universities. They are also the senior civil service and the top people in many quasi-public agencies. And there will be the star anchors and commentators from the major television networks and newspapers. The leaders of big-city museums, opera and ballet companies and symphonies are also 1 percenters. In other words, the 1 percent are the leaders in each of their sectors: the elites of the business, professional, educational, health, government, media and cultural sectors.
Probably the most insightful commentary that I have read about Canada’s one percent was published by George Fallis for the Literary Review of Canada. As George points out in his article, the problem with the one percent is not a tax problem.