This election presents an opportunity for you wealthy Canadians, especially the very richest 0.1% among you—the 25,000 Canadians with an average annual income of $1.5 million—to do the right thing and put the broader public good ahead of your own interests.
I know that this is asking a lot. Recent psychological research suggests that the wealthy as a group tend to be less generous and altruistic than the rest of us.
You've made spectacular income and wealth gains over the last three decades at the expense of the large majority of Canadians whose earnings have either remained stagnant or fallen after inflation. You have managed to more than double your share of the national income pie, something not seen since the 1920s. And by 2009, the worst year of the recession, the wealthiest 3.8% of families had captured a stunning two-thirds of all financial wealth in Canada.
Although you would never use this term, you have been waging a class war by stealth against the middle class.
Your economic power and political influence have “bought” government policies that have been very damaging to working people. Free trade, deregulation and privatization have vastly increased the power of corporations to drive down wages, break unions, demand lower taxes, starve public services and discipline uncooperative governments. You have convinced many that in an era of globalization there is no alternative to these rapacious free market policies.
Since 2000, you have persuaded governments to cut taxes and shrink the federal treasury by a mind-boggling $420 billion. No wonder governments are so strapped.
Sixty years ago, as the Canadian middle class was emerging, your predecessors got by with a top income tax rate of 80%. Since then, and especially in the last 25 years, you have persuaded governments to compress the income tax system and reduce to top rate just half of what it was (42.9%).
With the proliferation of government tax shelters, most recently Tax Free Savings Accounts (TFSAs), and through loopholes that allow you to stash away income in Caribbean tax havens, your actual tax bill is lower still. In fact you are paying less tax overall as a portion of your income than the poorest 10% of Canadians.
The reduction in the capital gains tax rate was a real bonanza for you. It stands as the biggest single income grab from the federal treasury by the wealthy in Canadian history. And the massive corporate income tax cuts, which have poured billions of dollars into company coffers, are not being invested in plant and equipment, but rather are being largely siphoned off in dividends to shareholders, and to executive salaries and bonuses—namely to you.
Speaking of which, the CEOs among you have done extraordinarily well, especially in the last 10 years. Your compensation packages now exceed by 155 times the earnings of the average Canadian worker, up from an already bloated 100 times in 2000. How can you think you are worth that much more than the rest of us let alone than your own counterparts a generation ago?
Your success in protecting your privileges and advancing your interests has been truly remarkable.
It obviously has a lot to do with your huge contributions to political parties (recently curbed) and to party leadership campaigns (still unlimited). Why else would you do it? You have a lock-hold on the mainstream media and you fund a vast network of think-tanks, lobby groups, and hired guns.
Through your well financed instruments of persuasion you have lulled many ordinary Canadians into believing that tax cuts are free; that here is no other side to the equation; that a few dollars more in their pockets is better than paying for improved health care, education, pensions, and child care. You have endlessly promulgated the fantasy that we can tax-cut our way to prosperity for all.
For the large majority of Canadians, public services provide an incredible value, equivalent one-half or more of their earnings. (Although you wouldn’t know it from the incessant denigrating of government as a positive force in our lives.) Pooling our resources is the only way we can maintain and build these essential foundations of a decent and dignified life.
But for you in the top 0.1%, the value of public services represents just a tiny fraction of your income. You can, and are, increasingly opting to educate your children in private schools and expensive American universities; increasingly opting for private health care abroad and choosing to live in gated communities. Your world is becoming disconnected from the everyday realities and struggles of most Canadians. Less and less is there a feeling that we’re all in the same boat, that we are part of one community.
Although you pretend that the high level of inequality in Canada doesn’t matter, authoritative international research demonstrates that inequality creates social pathologies such as higher crime and incarceration rates, and poorer health. More equal countries are more successful along a host of social and economic performance indicators—from health to happiness to productivity.
This research puts lie to the myth that everyone through hard work can get to the top. In highly unequal societies like Canada, upward mobility is much less than in more equal societies such as Sweden and Japan. You have created a cozy club that reproduces itself through successive generations and doesn’t let in many outsiders.
The fact is that this high level of economic and political inequality is corroding the quality of our democracy and eroding our sense of who we are. Our image of ourselves as a caring and sharing society is now a fading reflection of a past that no longer exists.
It's time to put your narrow self-interest on hold. It's time to suspend your pathological propensity to amass ever more wealth.
In this election and beyond, it’s time to support political parties that promise to begin to reduce inequalities, strengthen public services, and improve the fiscal capacity to pay for them.
It’s time to do the right thing.
Bruce Campbell is the CCPA’s Executive Director.