BC’s Top 1%: Doing fabulous, thank you
Occupy Wall Street has shone new light on the growing gap between the richest 1% and the rest of us (the 99 percenters).
But that’s the U.S. right? Surely, our reality is different, eh? As the occupy movement comes to Canada in the coming week, we don’t really have reason to copy these American trouble-makers, do we?
Think again.
While inequality in Canada is not as great as in the U.S., in recent years it has been growing faster here (as noted in a recent report from the Conference Board of Canada).
As the CCPA documented in a report earlier this year on The Rise of Canada’s Richest 1%, “the 246,000 privileged few who rank among the country’s richest 1% took almost a third (32%) of all growth in incomes between 1997 and 2007.”
And here in British Columbia, the richest 1% have been doing remarkably well.
Last June, the CCPA-BC released a report on the erosion of tax fairness in BC. We found that BC’s personal tax system (including income tax, sales taxes, property taxes, carbon taxes and MSP premiums) has become out-and-out regressive –– amazingly, the richest 1% of BC households pay a lower overall tax rate than others. Meaning, in today’s BC, as a share of one’s income, the richer you are the lower your overall tax rate.
In fact, provincial income tax cuts introduced since 2001 delivered, on average, a whopping $41,000 to the top 1% of BC households.
How could the value of ten years of tax cuts be so great for the richest 1%? The answer: tax cuts are worth so much because the richest 1% have been making out so fantastically well. As of 2010, the average income of the richest 1% of BC households had reached a staggering $820,000 (that’s in one year!).
And the top 1% saw huge gains over ten years. Back in 2000, their average household income was $602,000. So in ten years, their income rose by a fantastic 36% (double the inflation rate of 18% during that time). With the market producing so much gains for the wealthiest among us, why on earth did the government feel compelled to pile on with tax cuts for those who need it least?
Quite a contrast with the rest of us: real median incomes were flat during that period.
If we are serious about addressing rising inequality, we need to increase taxes on the wealthiest British Columbians. BC’s upper income tax brackets need to be increased, and we should bring in a new high income tax bracket or two (hey, if even Warren Buffet can advocate for that in the US, we can and should be pursuing it here). Longer term, we need a Fair Tax Commission – a chance to have a full public conversation about how much money we need to pay for what we want to provide collectively, and how to raise that money in a fair and equitable manner.
Topics: Poverty, inequality & welfare, Taxes