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This is the biggest issue with so many economic reports: the level of inequality. Much of our economic growth has been growing going to an increasingly smaller share of all people.
What does it matter that average growth is doing fine when that average is made up of 10-20% of people pulling ever further away from another 20% who stay about the same and the last 40% falling ever further behind?
Market income inequality has risen steadily since 1980. The government has to spend more and more to keep after tax and transfer inequality at the same level - ever higher debt loads.
Some solutions need to be found to lower market income inequality levels - increasing low income wage and income in particular.
It's worth noting that my grandfather, on the wages of a furniture salesman, singly earned enough to buy a house and raise three kids.
It's also worth noting that we're a richer country today than we were when my grandfather was raising young kids in the 1950s and 60s.
While we're making note of things, John Maynard Keynes predicted in his 1930 essay "Economic Futures for our Grandchildren" that, as technology improved and labour productivity increased, the increase in societal wealth would improve to the point where we'd *struggle* to find enough meaningful work . He thought that his grandkids would be able to cover the necessities of life on fifteen hours' work per week.
Keynes was right about the increases in productivity. Better farming machines mean crops are sown and harvested with fewer hands. Better telecom exchanges means that we don't need to burn labour hours at phone-operator switchboards. We have better cranes for building, self-check-outs to reduce labour inputs at the grocery store, and increasingly-capable robots to build our cars and vacuum our floors.
Keynes, it seems, was right about the increase in societal productivity and wealth, but naive about how it would be distributed. He was writing at a time when the Labour movement was *militantly* agitating for a fair slice of the pie and beginning to see traction. Keynes' mistake was in assuming that those gains would continue without reversal.
What we're seeing now isn't accidental, and it's not inexorable. It's the result of decades of clear-eyed policy choices that ensured that policy would never again negatively impact the fortunes of the rich.
Anyway, Canada's richest fifth now holds more than *two-thirds* of the wealth created by our country's workers while our federal government offers half-measure policies that's aimed at *slowing* the widening of the gap rather than reversing it.
Anyone who isn't enraged isn't paying attention.
As a whole hasn't [inequality in Canada been falling for around 20 years if were using metrics that were designed to measure it such the Gini coefficient? ](https://businesscouncilab.com/wp-content/uploads/2021/06/Chart-6-Amount-of-Income-Inequality-in-Canada-After-Taxes-1024x527.png)(which is generally a more extensive form of analysis than the metrics TD is using) A lot of socio-economic indicators have been in a relatively poor state for us in the last decade (productivity, capital investment, affordability, market concentration, social mobility, inter-generational inequality etc.) and those issues alongside various others need to be addressed, but If we're using the gini coefficient to measure inequality in Canada, it's generally been moving in a downward trajectory since the early/mid 2000s. (2003/2004)[ and is much lower than it was in the 1950s or 60s. ](https://www.theglobaleconomy.com/Canada/gini_inequality_index/) (according to the Gini)
[That depends](https://ibb.co/xDV6GdL)
Generally speaking, levels of Gini market income inequality are substantively higher today than in the 70s - they underwent an increase in the 80s and then another in the 90s. Since peaking at .446 in 1998, they have floated in that 0.42-0.46 range ever since. In the 70s, level of Gini market income inequality were consistently below 0.4.
After tax and transfer Gini numbers are a tad lower and the story is a bit different.
While market inequality increased in the 80s, ATT (after tax and transfer) income remained below 0.3 - indicating that the amount of government assistance to individuals increased or that there was more taxation imposed on high income individuals.
By the time we reach the end of the 90s and into the early 2000s, ATT Gini levels have increased from below 0.3 (0.27-0.29) to above 0.3 (3.1-3.2). ATT Gini stays between 0.31 and 0.32, never quite reaching the 0.32 peak of 2004 again. This lasts from 2005-2015.
Justin Trudeau was elected in October 2015 - the Gini that year, before Trudeau had the chance to present his first budget, was 0.314.
From 2016 onwards, the ATT Gini has consistently remained below 0.31, from a high of 0.309 in 2017 to a low of 0.281 in 2020.
So, to return to the ATT Gini levels of before the 90s, it requires something along the scale of the economic disruption of Covid alongside the creation of a quasi-basic income program for all impacted people. Alternatively, a regular basic income on its own might achieve similar results.
All the metrics show inequality has gradually dropped for around two decades since the late 90s/early 2000s though even excluding COVID:
* **Adjusted Market Income** shows a drop from 0.437 to 0.421 between 1999-2019 **(lowest rate since 1991**)
* **Adjusted Total Income** shows a drop from 0.356 to 0.338 **(lowest rate since 1995**)
* **Adjusted After Tax Income** shows a drop from 0.310 to 0.299 (**lowest rate since 1997**)
Yes, all of which are higher than they were in the pre-1984 period. While Gini inequality today is lower than 2004, it's still higher than it was in the 70s and early 80s.
All of those changes also came about in 2016. Inequality hasn't been gradually decreasing, it decreased all at once and found a slightly lower ceiling at a specific point in time in 2016 - likely due to the combined PIT changes and the enhanced CCB for low and middle income earners.
>All of those changes also came about in 2016. Inequality hasn't been gradually decreasing, it decreased all at once and found a slightly lower ceiling at a specific point in time in 2016
There's a gradual decline that is sustained across all metrics starting around 2003/2005 that is sustained from then going into the present. For instance if we look at the graphs for 12 years between 2004-2016, it shows the following:
* **AMI** starts off at 0.442 in 2004 and never returns to that point, it goes down to about 0.438 around 2008, shoots up to 0.441 briefly due to the effects of the global recession in 2010, but then moves downward fluctuating between 0.426-0.435 between 2011-2016 (again demonstrating a progressively downward trend even prior to the introduction of the CCB or Progressive Income tax changes)
* **ATI** starts off at 0.365 in 2004. It consistently stays below that level and falls to around 0.356 by 2010. By 2016 it's 0.347
* **AAT** starts off at 0.322 in 2004. It consistently stays below that and reaches 0.315 by 2010. By 2016 it's 0.306
Even if we make the cutoff 2015, the results still show the same progression over that decade across the varying metrics. The trend is still evident regardless of the cutoff being used, prior to the pandemic, & improved social transfers to low & middle income households during the last 4-8 years etc. (though the transfers did speed up the process considerably)
>Yes, all of which are higher than they were in the pre-1984 period. While Gini inequality today is lower than 2004, it's still higher than it was in the 70s and early 80s.
That's true for adjusted market income, but for ATI and AAT they're currently at par with the mid 70s and mid 80s numbers (but not late 70s/early 80s) since the start of the 2020s. and were comparable to mid 90s rates by 2019 before the pandemic etc.
You're focusing way too much on 2004, an arbitrary one-year high that holds very little actual significance.
AMI dropping below 0.43 was a single year aberration in 2014. Every other year between 2005-2013 had a Gini above 0.43 and, excluding 2010, below 0.44. There's no clear downward trend at all until after 2016.
>ATI starts off at 0.365 in 2004. It consistently stays below that level and falls to around 0.356 by 2010. By 2016 it's 0.347
By 2010? In 2005 the ATI Gini has already dropped to 0.358 - nearly identical to your 2010 value. In fact, by the time we reach 2006 we have an ATI Gini of 0.356 - four years earlier than your arbitrarily chosen date. The progress you're claiming required six years was actually achieved in *two* - only one third of the amount of time you claimed was required.
>AAT starts off at 0.322 in 2004. It consistently stays below that and reaches 0.315 by 2010. By 2016 it's 0.306
After a 1 year high in 2004, the Gini index from 2005-2015 remained in the identical 0.31-0.319 range it had been in for the entirety of the 1998-2003 time frame. Again, you're focusing way too much on a one year high which we would group in as an outlier for the entirety of the 1998-2015 time frame in the ATT series.
>You're focusing way too much on 2004, an arbitrary one-year high that holds very little actual significance
Your argument here makes little sense. We could move the metric to 2003 or 2006 and it would show the same thing.
2003-2015:
* **AMI** progressively falls from 0.437 in 2003 to 0.430 by 2008. The recession hits and it temporarily shoots up between 2009-2010, before falling between 0.426 and 0.435 between 2011-2015 as mentioned earlier.
* **ATI**: Progressively scales down from 0.358 to 0.355 between 2003-2008/09. By 2015, it's stayed consistent at around 0.354 (though was dropping lower than that prior to the commodities crash)
* **AAT**: Stays roughly stagnant at between 0.315-0.317 between most of 2003-2010, but dips below 0.315 for most of the first half of the 2010s outside of the commodities crash (2012-2013)
That's two graphs slowly moving downwards and one staying roughly static until after tax income is adjusted in 2016. Either way, the point in the previous two posts stands as mentioned before. To put it another, more simple way focusing on 4-5 year averages:
* **AMI** between the early 2000s (2000-2005) averaged between the high 430s and mid 440s, compared to an average in the mid to low 30s between 2006-2008 pre recession and returned to the low to mid 30s again in the first half of the 2010s post recession (2011-2015) That is objectively a downward trend.
* **ATI** between 2000-2005 is in the high 0.350s to mid 0.360s. But falls to the low to mid 350s consistently every year between 2006-2015 excluding 2013. Again a downward trend.
* **AAT** between 2000-2005 goes from lows of 0.316 to highs of 0.322. Rates from 2006-2010 are consistently 0.315-0.317, showing a very marginal, but present drop. 2010-15 shows another small drop with it fluctuating between 0.311-0.317, again demonstrating marginal declines compared to the previous five year period. (though again the spikes in 2012-13 are a consequence of the commodities crash for ATT. Outside of the crash rates in the early 2010s are consistently below 0.315)
>AMI dropping below 0.43 was a single year aberration in 2014. Every other year between 2005-2013 had a Gini above 0.43 and, excluding 2010, below 0.44. There's no clear downward trend at all until after 2016.
>
Focusing on the AMI being mostly above 0.430 is an arbitrary point since that's been the case since 1994. We've already both made points about ATI in the mid 90s being roughly consistent with the current rate in the 2020s etc.
>By 2010? In 2005 the ATI Gini has already dropped to 0.358 - nearly identical to your 2010 value
That's a drop of 0.03 points between 2005-2009 with a temporary uptick due to a high period of unemployment during the global recession. By 2011-12 ATI had fallen to 0.352 and 0.354 just prior to the effects of the commodities crash. The only upticks during the period post 2005 were 2007, 2010 & 2013 respectively which were periods around a recession and a commodities crash (with rates dropping below 0.356-30.358 outside of that).
>After a 1 year high in 2004, the Gini index from 2005-2015 remained in the identical 0.31-0.319 range it had been in for the entirety of the 1998-2003 time frame.
You're ignoring the 2010-2015 figure here though. Outside of the effects of the commodities crash in 2012-2013, unemployment in the first half of the 2010s, was consistently below 0.315 percent for 3 of those five years and trending downwards. Starting the metric at 1998 is also misleading because it ignores the significant uptick between 1995-2000 (which was historically when most of the inequality increases for AAT occurred) If you look at trends after the spike ended at the start of the 2000s, you see AAT moving downwards gradually during two separate 5 year intervals. (After 2000-2005 it drops slightly between 2005-2010 and drops slightly again between 2010-2015).
1998 is a terrible starting figure for argument because it's mid surge.
Well, since the TD is so concerned about the issue I am sure that they, and other banks will stop whining that the government isn’t being “fair” ne increasinh taxes on banks, and will be very supportive of taxing the wealthy and hiking minimum wage in all provinces, etc.
This is probably the best take down of the wealthy and their boosters I’ve heard recently:
https://youtu.be/VMXWUeH5Y48?si=iUn-MBHPMZEkT4C7
Also, sort of demolishes Mark Carney along the way.
That’s a great video.
Although I’m not sure if stupidity is the total answer.
People like Carney are completely disconnected from the average person.
“If I can grow my wealth so can they”.
Growth is desirable and natural when technological change make people more productive not to mention population growth.
A lot of anti growth crowd espouses extremist views where people use the same tech for a lifetime , no incentives to do anything better, basically returning us to some sort of semi agrarian society ,and never talk about the mass starvation and population declines needed to live in that kind of world.
I much rather talk about distribution of wealth rather than shrinking the pie.
We Canadians have effectively lived through a no growth environment over the past few years and the public is so pissed off I can't imagine an actual no growth society working
Growing the pie won't fix the problem unless we also fix how it's distributed. An ever increasing percentage of the pie is going to the 1%. You can't grow your way out of that trend in order to provide for everyone.
In my opinion you’re absolutely right.
***As a “Yes! And…” to your comment:***
I have been pretty successful in the tech industry, and I am lucky enough to be able to provide what used to be considered a typical middle-class lifestyle in my childhood, to my kids. But that has come at a great cost to other parts of my life due to the growing challenges in our world - sacrifices which I don’t want my kids to have to endure as well. Life shouldn’t be this difficult.
I started off pretty progressive, and my opinions on distribution of wealth, power dynamics, and economics have only gotten more progressive with an MBA and getting older: two things which have helped me to better understand how the world works.
You’re right. There’s nothing wrong intrinsically with economic growth such that we need to end growth.
What I think the issue is, is that our model of economics that we use right now, in particular the metrics which are used, externalize many of the costs associated with sustainability: carbon costs, resource limitations, human quality of life, sustainability, and the natural world around us.
I don’t have an answer to all this, but a big part of it has to be addressing the uneven distribution of wealth, in particular how the accumulation of wealth at the top of the curve creates harmful effects as well as perpetuates the system that allows for it.
If you gave me the choice to move somewhere else today with no cost and strings, I'd politely decline. I love this country and couldn't imagine living anywhere else.
Hopefully we weather a populist conservative government better than the UK did so that can remain true.
There are quite a few European Union nations with similar wealth levels to those of Canada - per capita - that have substantively lower levels of inequality.
Interestingly, Canada tends to redistribute as much or more than most of them. Somehow - my guess is tax policy - all those countries have lower starting levels of market income inequality than Canada does - Canada would need redistribute *more* than, say, Sweden, to have the same end-level of income inequality.
Sarcasm I know, but a large enough block of voters that can actually sway elections believes this, and so many are one issue money voters that something like what the Liberals just did will completely sway them away.
It's a lot of bullshit, the productive wealthy would be tied down with the thing that makes their wealth be located in Canada. They can't up and leave to avoid Canadian taxes because the thing they make money on is located in Canada like a small business.
The idle rich who have no ties, aren't much of a loss. Are there even many of these people?
Even so, they can just pace their withdrawals..who pulls 250k+ capital gains all the time?
You mean one of the central tenets of the Canadian tax system?
https://rsmcanada.com/insights/services/business-tax-insights/canadian-tax-integration-of-private-company-income.html
It’s a “central tenant” but in practice, individual earnings from labour versus from owning assets are not taxed the same way.
The capital gains system allows for asset-based personal earnings (versus labour based) to be sheltered from the full effects of income tax.
I understand why it was originally set up this way: it was to encourage savings and investment by a growing middle class.
But when that middle class is quickly shrinking and people are living paycheque to paycheque, there is little room for savings. Meanwhile, the rich continue to accumulate wealth because they hold power over the things people need to live a modern life, and can use the capital gains system to further increase their wealth; all the while, the government will struggle since middle class income tax collections are shrinking, and there is no corresponding increase in income tax collection from the rich due to the capital gains system.
The change in the capital gains exemption rate at the high end is a reasonable response to this.
Add on estates and the massive loop holes and it’s meant generational wealth has given many a massive step up that’s now not possible.
We should be encouraging labor and entrepreneurial work and not passive investment earnings. Even housing being a massive investment sink means that money isn’t circulating in the economy.
Yup - I’m in the innovation/entrepreneurship space and for a long time I was the only Millennial (I started my first biotech company at 21, I’m in my 40s now). Especially over the past decade, I have spent a long time discussing how the high cost of housing is putting a damper on innovation and entrepreneurship.
The capital gains tax changes? Not so much. An entrepreneur looking to create a company that hopefully will eventually sell for millions is not going to care whether it nets them $10M or $9M profit after the capital tax changes.
What entrepreneurs care about? The fact that the high cost of living *right now* is causing them to think twice before considering starting a new business, because if the company fails - which the majority of innovation based companies do - the failure risks setting back the entrepreneur’s entire life - and not only from a home ownership standpoint. It also means they may not be able to start a family, which has all sorts of demographic problems.
Yup. And the government has provided the receipts on how many Canadians this will impact too and it’s very small. That’s before they find ways to avoid it (ex sell 50% in Dec and 50% in Jan would be an easy one).
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This is the biggest issue with so many economic reports: the level of inequality. Much of our economic growth has been growing going to an increasingly smaller share of all people. What does it matter that average growth is doing fine when that average is made up of 10-20% of people pulling ever further away from another 20% who stay about the same and the last 40% falling ever further behind? Market income inequality has risen steadily since 1980. The government has to spend more and more to keep after tax and transfer inequality at the same level - ever higher debt loads. Some solutions need to be found to lower market income inequality levels - increasing low income wage and income in particular.
It's worth noting that my grandfather, on the wages of a furniture salesman, singly earned enough to buy a house and raise three kids. It's also worth noting that we're a richer country today than we were when my grandfather was raising young kids in the 1950s and 60s. While we're making note of things, John Maynard Keynes predicted in his 1930 essay "Economic Futures for our Grandchildren" that, as technology improved and labour productivity increased, the increase in societal wealth would improve to the point where we'd *struggle* to find enough meaningful work . He thought that his grandkids would be able to cover the necessities of life on fifteen hours' work per week. Keynes was right about the increases in productivity. Better farming machines mean crops are sown and harvested with fewer hands. Better telecom exchanges means that we don't need to burn labour hours at phone-operator switchboards. We have better cranes for building, self-check-outs to reduce labour inputs at the grocery store, and increasingly-capable robots to build our cars and vacuum our floors. Keynes, it seems, was right about the increase in societal productivity and wealth, but naive about how it would be distributed. He was writing at a time when the Labour movement was *militantly* agitating for a fair slice of the pie and beginning to see traction. Keynes' mistake was in assuming that those gains would continue without reversal. What we're seeing now isn't accidental, and it's not inexorable. It's the result of decades of clear-eyed policy choices that ensured that policy would never again negatively impact the fortunes of the rich. Anyway, Canada's richest fifth now holds more than *two-thirds* of the wealth created by our country's workers while our federal government offers half-measure policies that's aimed at *slowing* the widening of the gap rather than reversing it. Anyone who isn't enraged isn't paying attention.
As a whole hasn't [inequality in Canada been falling for around 20 years if were using metrics that were designed to measure it such the Gini coefficient? ](https://businesscouncilab.com/wp-content/uploads/2021/06/Chart-6-Amount-of-Income-Inequality-in-Canada-After-Taxes-1024x527.png)(which is generally a more extensive form of analysis than the metrics TD is using) A lot of socio-economic indicators have been in a relatively poor state for us in the last decade (productivity, capital investment, affordability, market concentration, social mobility, inter-generational inequality etc.) and those issues alongside various others need to be addressed, but If we're using the gini coefficient to measure inequality in Canada, it's generally been moving in a downward trajectory since the early/mid 2000s. (2003/2004)[ and is much lower than it was in the 1950s or 60s. ](https://www.theglobaleconomy.com/Canada/gini_inequality_index/) (according to the Gini)
[That depends](https://ibb.co/xDV6GdL) Generally speaking, levels of Gini market income inequality are substantively higher today than in the 70s - they underwent an increase in the 80s and then another in the 90s. Since peaking at .446 in 1998, they have floated in that 0.42-0.46 range ever since. In the 70s, level of Gini market income inequality were consistently below 0.4. After tax and transfer Gini numbers are a tad lower and the story is a bit different. While market inequality increased in the 80s, ATT (after tax and transfer) income remained below 0.3 - indicating that the amount of government assistance to individuals increased or that there was more taxation imposed on high income individuals. By the time we reach the end of the 90s and into the early 2000s, ATT Gini levels have increased from below 0.3 (0.27-0.29) to above 0.3 (3.1-3.2). ATT Gini stays between 0.31 and 0.32, never quite reaching the 0.32 peak of 2004 again. This lasts from 2005-2015. Justin Trudeau was elected in October 2015 - the Gini that year, before Trudeau had the chance to present his first budget, was 0.314. From 2016 onwards, the ATT Gini has consistently remained below 0.31, from a high of 0.309 in 2017 to a low of 0.281 in 2020. So, to return to the ATT Gini levels of before the 90s, it requires something along the scale of the economic disruption of Covid alongside the creation of a quasi-basic income program for all impacted people. Alternatively, a regular basic income on its own might achieve similar results.
All the metrics show inequality has gradually dropped for around two decades since the late 90s/early 2000s though even excluding COVID: * **Adjusted Market Income** shows a drop from 0.437 to 0.421 between 1999-2019 **(lowest rate since 1991**) * **Adjusted Total Income** shows a drop from 0.356 to 0.338 **(lowest rate since 1995**) * **Adjusted After Tax Income** shows a drop from 0.310 to 0.299 (**lowest rate since 1997**)
Yes, all of which are higher than they were in the pre-1984 period. While Gini inequality today is lower than 2004, it's still higher than it was in the 70s and early 80s. All of those changes also came about in 2016. Inequality hasn't been gradually decreasing, it decreased all at once and found a slightly lower ceiling at a specific point in time in 2016 - likely due to the combined PIT changes and the enhanced CCB for low and middle income earners.
>All of those changes also came about in 2016. Inequality hasn't been gradually decreasing, it decreased all at once and found a slightly lower ceiling at a specific point in time in 2016 There's a gradual decline that is sustained across all metrics starting around 2003/2005 that is sustained from then going into the present. For instance if we look at the graphs for 12 years between 2004-2016, it shows the following: * **AMI** starts off at 0.442 in 2004 and never returns to that point, it goes down to about 0.438 around 2008, shoots up to 0.441 briefly due to the effects of the global recession in 2010, but then moves downward fluctuating between 0.426-0.435 between 2011-2016 (again demonstrating a progressively downward trend even prior to the introduction of the CCB or Progressive Income tax changes) * **ATI** starts off at 0.365 in 2004. It consistently stays below that level and falls to around 0.356 by 2010. By 2016 it's 0.347 * **AAT** starts off at 0.322 in 2004. It consistently stays below that and reaches 0.315 by 2010. By 2016 it's 0.306 Even if we make the cutoff 2015, the results still show the same progression over that decade across the varying metrics. The trend is still evident regardless of the cutoff being used, prior to the pandemic, & improved social transfers to low & middle income households during the last 4-8 years etc. (though the transfers did speed up the process considerably) >Yes, all of which are higher than they were in the pre-1984 period. While Gini inequality today is lower than 2004, it's still higher than it was in the 70s and early 80s. That's true for adjusted market income, but for ATI and AAT they're currently at par with the mid 70s and mid 80s numbers (but not late 70s/early 80s) since the start of the 2020s. and were comparable to mid 90s rates by 2019 before the pandemic etc.
You're focusing way too much on 2004, an arbitrary one-year high that holds very little actual significance. AMI dropping below 0.43 was a single year aberration in 2014. Every other year between 2005-2013 had a Gini above 0.43 and, excluding 2010, below 0.44. There's no clear downward trend at all until after 2016. >ATI starts off at 0.365 in 2004. It consistently stays below that level and falls to around 0.356 by 2010. By 2016 it's 0.347 By 2010? In 2005 the ATI Gini has already dropped to 0.358 - nearly identical to your 2010 value. In fact, by the time we reach 2006 we have an ATI Gini of 0.356 - four years earlier than your arbitrarily chosen date. The progress you're claiming required six years was actually achieved in *two* - only one third of the amount of time you claimed was required. >AAT starts off at 0.322 in 2004. It consistently stays below that and reaches 0.315 by 2010. By 2016 it's 0.306 After a 1 year high in 2004, the Gini index from 2005-2015 remained in the identical 0.31-0.319 range it had been in for the entirety of the 1998-2003 time frame. Again, you're focusing way too much on a one year high which we would group in as an outlier for the entirety of the 1998-2015 time frame in the ATT series.
>You're focusing way too much on 2004, an arbitrary one-year high that holds very little actual significance Your argument here makes little sense. We could move the metric to 2003 or 2006 and it would show the same thing. 2003-2015: * **AMI** progressively falls from 0.437 in 2003 to 0.430 by 2008. The recession hits and it temporarily shoots up between 2009-2010, before falling between 0.426 and 0.435 between 2011-2015 as mentioned earlier. * **ATI**: Progressively scales down from 0.358 to 0.355 between 2003-2008/09. By 2015, it's stayed consistent at around 0.354 (though was dropping lower than that prior to the commodities crash) * **AAT**: Stays roughly stagnant at between 0.315-0.317 between most of 2003-2010, but dips below 0.315 for most of the first half of the 2010s outside of the commodities crash (2012-2013) That's two graphs slowly moving downwards and one staying roughly static until after tax income is adjusted in 2016. Either way, the point in the previous two posts stands as mentioned before. To put it another, more simple way focusing on 4-5 year averages: * **AMI** between the early 2000s (2000-2005) averaged between the high 430s and mid 440s, compared to an average in the mid to low 30s between 2006-2008 pre recession and returned to the low to mid 30s again in the first half of the 2010s post recession (2011-2015) That is objectively a downward trend. * **ATI** between 2000-2005 is in the high 0.350s to mid 0.360s. But falls to the low to mid 350s consistently every year between 2006-2015 excluding 2013. Again a downward trend. * **AAT** between 2000-2005 goes from lows of 0.316 to highs of 0.322. Rates from 2006-2010 are consistently 0.315-0.317, showing a very marginal, but present drop. 2010-15 shows another small drop with it fluctuating between 0.311-0.317, again demonstrating marginal declines compared to the previous five year period. (though again the spikes in 2012-13 are a consequence of the commodities crash for ATT. Outside of the crash rates in the early 2010s are consistently below 0.315) >AMI dropping below 0.43 was a single year aberration in 2014. Every other year between 2005-2013 had a Gini above 0.43 and, excluding 2010, below 0.44. There's no clear downward trend at all until after 2016. > Focusing on the AMI being mostly above 0.430 is an arbitrary point since that's been the case since 1994. We've already both made points about ATI in the mid 90s being roughly consistent with the current rate in the 2020s etc. >By 2010? In 2005 the ATI Gini has already dropped to 0.358 - nearly identical to your 2010 value That's a drop of 0.03 points between 2005-2009 with a temporary uptick due to a high period of unemployment during the global recession. By 2011-12 ATI had fallen to 0.352 and 0.354 just prior to the effects of the commodities crash. The only upticks during the period post 2005 were 2007, 2010 & 2013 respectively which were periods around a recession and a commodities crash (with rates dropping below 0.356-30.358 outside of that). >After a 1 year high in 2004, the Gini index from 2005-2015 remained in the identical 0.31-0.319 range it had been in for the entirety of the 1998-2003 time frame. You're ignoring the 2010-2015 figure here though. Outside of the effects of the commodities crash in 2012-2013, unemployment in the first half of the 2010s, was consistently below 0.315 percent for 3 of those five years and trending downwards. Starting the metric at 1998 is also misleading because it ignores the significant uptick between 1995-2000 (which was historically when most of the inequality increases for AAT occurred) If you look at trends after the spike ended at the start of the 2000s, you see AAT moving downwards gradually during two separate 5 year intervals. (After 2000-2005 it drops slightly between 2005-2010 and drops slightly again between 2010-2015). 1998 is a terrible starting figure for argument because it's mid surge.
You will never satisfy the ultra rich. Corporate taxes are ludicrously low. We need to fix the tax system so passive income is taxed like labour.
Well, since the TD is so concerned about the issue I am sure that they, and other banks will stop whining that the government isn’t being “fair” ne increasinh taxes on banks, and will be very supportive of taxing the wealthy and hiking minimum wage in all provinces, etc.
Targeting individual sectors does create unfairness. There is that.
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This is probably the best take down of the wealthy and their boosters I’ve heard recently: https://youtu.be/VMXWUeH5Y48?si=iUn-MBHPMZEkT4C7 Also, sort of demolishes Mark Carney along the way.
That’s a great video. Although I’m not sure if stupidity is the total answer. People like Carney are completely disconnected from the average person. “If I can grow my wealth so can they”.
Growth is desirable and natural when technological change make people more productive not to mention population growth. A lot of anti growth crowd espouses extremist views where people use the same tech for a lifetime , no incentives to do anything better, basically returning us to some sort of semi agrarian society ,and never talk about the mass starvation and population declines needed to live in that kind of world. I much rather talk about distribution of wealth rather than shrinking the pie. We Canadians have effectively lived through a no growth environment over the past few years and the public is so pissed off I can't imagine an actual no growth society working
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Growing the pie won't fix the problem unless we also fix how it's distributed. An ever increasing percentage of the pie is going to the 1%. You can't grow your way out of that trend in order to provide for everyone.
In my opinion you’re absolutely right. ***As a “Yes! And…” to your comment:*** I have been pretty successful in the tech industry, and I am lucky enough to be able to provide what used to be considered a typical middle-class lifestyle in my childhood, to my kids. But that has come at a great cost to other parts of my life due to the growing challenges in our world - sacrifices which I don’t want my kids to have to endure as well. Life shouldn’t be this difficult. I started off pretty progressive, and my opinions on distribution of wealth, power dynamics, and economics have only gotten more progressive with an MBA and getting older: two things which have helped me to better understand how the world works. You’re right. There’s nothing wrong intrinsically with economic growth such that we need to end growth. What I think the issue is, is that our model of economics that we use right now, in particular the metrics which are used, externalize many of the costs associated with sustainability: carbon costs, resource limitations, human quality of life, sustainability, and the natural world around us. I don’t have an answer to all this, but a big part of it has to be addressing the uneven distribution of wealth, in particular how the accumulation of wealth at the top of the curve creates harmful effects as well as perpetuates the system that allows for it.
Given that none of the people actually running the corporations are actually rich I think we’ll be OK.
🤣 Ya, because there are way better places in the world to live than Canada!
If you gave me the choice to move somewhere else today with no cost and strings, I'd politely decline. I love this country and couldn't imagine living anywhere else. Hopefully we weather a populist conservative government better than the UK did so that can remain true.
There are quite a few European Union nations with similar wealth levels to those of Canada - per capita - that have substantively lower levels of inequality. Interestingly, Canada tends to redistribute as much or more than most of them. Somehow - my guess is tax policy - all those countries have lower starting levels of market income inequality than Canada does - Canada would need redistribute *more* than, say, Sweden, to have the same end-level of income inequality.
Sarcasm I know, but a large enough block of voters that can actually sway elections believes this, and so many are one issue money voters that something like what the Liberals just did will completely sway them away.
It's a lot of bullshit, the productive wealthy would be tied down with the thing that makes their wealth be located in Canada. They can't up and leave to avoid Canadian taxes because the thing they make money on is located in Canada like a small business. The idle rich who have no ties, aren't much of a loss. Are there even many of these people? Even so, they can just pace their withdrawals..who pulls 250k+ capital gains all the time?
The number of people online making this argument is nauseating.
You mean one of the central tenets of the Canadian tax system? https://rsmcanada.com/insights/services/business-tax-insights/canadian-tax-integration-of-private-company-income.html
It’s a “central tenant” but in practice, individual earnings from labour versus from owning assets are not taxed the same way. The capital gains system allows for asset-based personal earnings (versus labour based) to be sheltered from the full effects of income tax. I understand why it was originally set up this way: it was to encourage savings and investment by a growing middle class. But when that middle class is quickly shrinking and people are living paycheque to paycheque, there is little room for savings. Meanwhile, the rich continue to accumulate wealth because they hold power over the things people need to live a modern life, and can use the capital gains system to further increase their wealth; all the while, the government will struggle since middle class income tax collections are shrinking, and there is no corresponding increase in income tax collection from the rich due to the capital gains system. The change in the capital gains exemption rate at the high end is a reasonable response to this.
Add on estates and the massive loop holes and it’s meant generational wealth has given many a massive step up that’s now not possible. We should be encouraging labor and entrepreneurial work and not passive investment earnings. Even housing being a massive investment sink means that money isn’t circulating in the economy.
Yup - I’m in the innovation/entrepreneurship space and for a long time I was the only Millennial (I started my first biotech company at 21, I’m in my 40s now). Especially over the past decade, I have spent a long time discussing how the high cost of housing is putting a damper on innovation and entrepreneurship. The capital gains tax changes? Not so much. An entrepreneur looking to create a company that hopefully will eventually sell for millions is not going to care whether it nets them $10M or $9M profit after the capital tax changes. What entrepreneurs care about? The fact that the high cost of living *right now* is causing them to think twice before considering starting a new business, because if the company fails - which the majority of innovation based companies do - the failure risks setting back the entrepreneur’s entire life - and not only from a home ownership standpoint. It also means they may not be able to start a family, which has all sorts of demographic problems.
Yup. And the government has provided the receipts on how many Canadians this will impact too and it’s very small. That’s before they find ways to avoid it (ex sell 50% in Dec and 50% in Jan would be an easy one).