I am about to do something generally frowned upon in our status obsessed society. Something only welcome at the most exclusive Hamptons endangered animal dinner parties, Manhattan booze and call girl infused office meetings, or Beverly Hills luxury car and private jet transported anti-pipeline fundraisers. I’m going to shed a tear for the rich. Rather than, say, eat them which I must admit in the case of select members of the aforementioned … okay, I shouldn’t go there.
I had hoped to talk about this when it first made a splash back in September during the Federal election but then the panicky Conservatives stuck a niqab in their mouth while doing a splendid GOP imitation and the topic of taxation was quickly pushed off the national radar. Lucky for me, with the Canadian dollar cratering, the economy faltering or outright imploding (hello Alberta), and the stock market puking up all those steroidal gains of recent years, all while individuals and governments continue to rack up awe-inspiring debt loads, it’s a safe bet that taxation levels are about to become a hot topic here in Canada once again. And when it comes to taxation it’s always about the rich.
Before fears of immigrants in niqabs sidetracked the national attention, taxing the wealthiest Canadians was grabbing a fair share of nightly headlines thanks to a CBC published survey which suggested most Canadians supported raising taxes for the rich. Surveys like this one conducted by Compass Canada make for catchy headlines but are always disingenuous and purposely prey on our innate classism and biases. They do this by refusing to define one very important piece of information in their question; that is, of course, who are “the rich”?
Who Exactly Are “The Rich”?
Ask almost any Canadian who “the rich” are and dollars to Timbits they’ll say anyone who makes more money than they do. Thus, the lower the income of the person you ask, the more rich people there are in this country. Few people answering that survey are going to consider themselves “the rich” so of course most respondents will think “the rich” should pay more. Thankfully so many of us are just on the cusp of being rich but actually aren’t so need not pay more taxes. In fact, we should pay less. And get more stuff for doing so.
The truch is defining “the rich” in Canada is a little tricky. We don’t have many high profile super-wealthy citizens like Bill Gates or Warren Buffett. Even our pantheon of very-wealthy, egomaniacal citizens like Donald Trump is a thinly populated demgraphic. Oh we have them, a couple anyway, but they aren’t famous in the same capacity as those financial celebrities regularly frequenting the pages of Forbes magazine. We quickly toss out generalities like “bankers”, a synonym for Torontonians, or “oil barons”, a synonym for Albertans, but few can pinpoint a specific name. Some may harp about Jim Balsillie or “the RIM guys” but that only exposes a serious lack of up-to-date prejudice. For the record, David Thompson and Galen Weston are your best answer next time such a question is posed.
This is a good failing because it reflects our more equal society with relatively less concentration of wealth here in Canada compared to the United States, for example. It also, if we allow it, keeps the question of taxing “the rich” better grounded in reality.
We can bitch about the super-rich all we want, but the truth is there’s no way they can single-handedly cure our national financial ills. Even taxing them at 99%, which I do hope we all can agree would be outrageous and unethical, would not solve our debt/deficit problems. They have a lot, yes, but we entitle ourselves to a lot more.
And what exactly would you tax, anyway? Much of the net worth of the super-wealthy is held in stock and other hard assets such as real estate which they don’t actively sell on a yearly basis. We tax based on income, not net worth, thank god. It’s not like Galen Weston (think Loblaws) earns a ten figure paycheck each year that we can plunder with income tax.
The Rich Already Pay More Taxes
What we, the regular folk as it were, all really need to understand and accept is that the rich already do pay more taxes. A lot more. They absolutely, unequivocally do and they do so in every jurisdiction of this great land. Debating if they pay enough or should pay even more is absolutely valid, but we need to start with the acknowledgement that they pay more already. And maybe take a moment to show them a little gratitude before we collectively resolve to pick their pockets a little more.
They pay more taxes because, yes, they are earning higher incomes than the rest of us, but in many other ways too. They typically own nicer, more expensive homes than the average Canadian. Often a LOT nicer and a LOT more expensive. With much of the nation’s municipal governments employing some form of property assessment program, those nicer, more expensive homes come with a much higher property tax bill which is then used to pay for services like public education (something “the rich” don’t always use themselves), public parks, and waste removal. The rich pay more to do the very same things you do like run their dog in the park, dispose of garbage, or flush a toilet when they shit, something they do with presumably similar frequency to you, simply because they are richer and own a nicer home.
The rich also tend to buy fancier and pricier clothes and cars. They eat at swankier restaurants and possibly more often. They take more luxurious vacations and do so with greater frequency. All of this consumption is taxed thanks to the GST, sometimes additionally thanks to PST or HST, and since it all comes with a higher price tag it inevitably results in more taxes being paid. Contrary to what Keyser Söze thinks, the greatest trick the devil could play would be convincing the ultra-rich to live a middle class lifestyle.
Of course, I still haven’t established who among us actually are “the rich”. The next time some smug pollster manages to convince you to endure a short survey and the question of tax the rich comes up, before answering demand that the polling company explicitly defines “the rich” with actual numbers. The answer might surprise you.
This Is Rich In Canada’s
Allow me to try here. The stat that has become de rigueur recently is the 1%. These select people are the richest of the rich. They earn too much and they own a disproportionate concentration of national wealth, well that’s the gist of it anyway. It’s a figure forged from the American reality that has been universally adopted, and some might argue bastardized, in most Western nations.
But how much do you think it takes to be a 1%er in Canada? It turns out anyone earning over $222,000 a year is an official member of the 1% club. A whopping 264,030 Canadians. That’s a phenomenal salary indeed, but I’ll bet a small child of your choosing that you expected it to be much higher. Okay, how about this? On average these roughly quarter million Canadians earn $454,800 annually. That’s a more impressive number, isn’t it? Of course, it’ll be skewed higher by the very small number of Canadians earning millions of dollars per year; the 0.1%. Averages are like that, tricking people into being angrier than they should be.
Here’s a telling figure. Of those Canadian 1%ers, they paid an average of $151,900 in income taxes. Again, that’s an average and skewed by the uber rich, but still, an impressive number. Based on that number some residents of the 1% club pay more in taxes that the last entrant of said club earns in income. Let that sink in for a minute. That’s some significant coin. If you still don’t think the rich pay a more in taxes you’re in serious denial.
Oh, but there’s more. Collectively, the 1% paid 20.3% of ALL federal and provincial income taxes in this country. Still think the rich aren’t paying their fair share? Let’s broaden the “rich” clique a bit for fun. What size of salary do you think it takes to be included in the richest 10% of Canadians? The income cutoff for the top 10% is $89, 200. I’ll bet both my kidneys right now you know at least one person earning that kind of money and you likely don’t consider them “rich”. I myself know quite a few such Canadians. At least one is likely teaching your children. Hell, it very likely could be you yourself.
We ALL Need To Pay More Taxes
The point of all this is that we desperately need to get our selfish, ignorant egos dislodged from our rectums. We need to concede that “the rich” is not some greedy mass of undeserving despots, conveniently not including ourselves, that gets a free pass in life while we the working proletariat is forced to bankroll everything. For one, we don’t bankroll everything already and rarely ever have in the past forty years as any quick look at governmental balance sheets will confirm. And secondly, the rich already pay an oversized chunk of money towards sustaining this extravagant First World lifestyle we have in this country.
Can they, and should they pay more? Absolutely! But so should all the rest of us. Every. Single. One of us. In the meantime, let’s also be grateful that the wealthy by and large like to display their wealth because if they all decided that frugality was cooler and stopped buying the mansions, and the Mercedes, and going to the exclusive restaurants, and staying in five star hotels, we’d be even more financially hooped than we are already. Plus Kijiji would suck.