Jan 17, 2012

Top 10 Reasons for Upper-Income Tax Increases


Some feel we shouldn’t increase taxes on upper-income folks. After all, people know best how to spend their money, whereas the government will only waste it on needless activities.

Well then, I humbly submit the following Top 10 list of reasons for upper-income tax increases (in descending order).

#10: Ridiculous real estate.

Check out Vancouver’s 40 most expensive listings. West Vancouver currently has a property listed for just under $40 million. Indeed, the top six properties all list for over $20 million. The top property includes
a main house featuring “6 bedrooms, negative edge pool, hot tub, indoor and outdoor ponds, 3 waterfalls, billiards room, movie theatre, wine cellar, gym, massage room, and 15-car garage.” And then there is the “7,000 square feet guest house and 2,580 square feet combination maids’ quarters and office.”

#9: Canada’s top 100 CEOs pocketed an average $8.38 million in 2010.

That was a 27 percent increase over 2009, and 189 times more than Canadians earning the average wage. For more, see the CCPA report here.

#8: A “Super-Yacht” with a functioning volcano.

I kid you not. See here.

#7: A $2 million diamond handbag.

Really? Yup. See here

#6: Out-of-control weddings.

Weddings have always been big business. But clearly, some people need to be saved from themselves.

#5: Oh, just look at this.

LXRY Magazine (Luxury) is a Canadian online magazine focusing on comfort and extravagant living. Got 30,000 bucks for a pair of gold earrings or $200,000 for a car?

#4: The maximum RRSP deduction for 2011 is a whopping $22,450. 

That’s the ceiling for an annual contribution (for which people receive an extremely generous tax deduction — comes right off one’s taxable income) and does not include any unused room from previous years. Who the hell has $22K in extra income to tuck into this highly publicly-subsidized savings plan? A minimum-wage earner working full-time all year would have an entire annual income of only $19,798. The RRSP is one of the most expensive and inequitable social programs in Canada. The program costs the public treasury about $10 billion a year in foregone revenues. Yet, according to the CCPA’s Alternative Federal Budget, while more than two-thirds of those making over $100,000 a year contribute to RRSPs, less than a quarter of those making less than $50,000 find themselves able to contribute.

#3: The ultra rich are growing, according to Canada’s banks, so the 99% of us should follow the money. See here.

#2: Am I the only one who finds the “driving” section of almost any newspaper really annoying?

And the #1 reason for tax increases…

Weddings for dogs! Yes, it’s true.

“You can spend anything from $400 to $10,000,” says Doggie wedding planner Scott Rinehart. Doggie I Do’s, a Canadian company that coordinates “puptials” “for mutts in love,” offers basic wedding packages for 25 guests starting around $4000.

For more see here.

And you wanted proof that the free market rationally allocates scarce resources?

Clearly some people are under-taxed.  Couldn’t and shouldn’t some of that disposable income be put to better use?

Having a little of fun at the expense of the very rich is, well, fun. But on a more serious note, extensive research in a variety of fields (most comprehensively documented by epidemiologists Richard Wilkinson and Kate Pickett in their book, The Spirit Level) shows that out-of-control wealth and extreme inequality are actually bad for everyone — for our communities, our health, our democracy, our environment, and our personal wellbeing. Taxes are one of the ways we can reduce inequality, and create a more fair society for everyone. And that’s the real #1 reason we need tax increases for the wealthy.

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