"This is a vision of a nation in which we’re all in it together — in which burdens are shared broadly, rather than simply inflicted upon a small minority."
More visionary socialist stuff from Barack Obama? Well, not quite.
In fact, the line is from conservative New York Times columnist David Brooks. And, in case it isn’t obvious, the "small minority" whose burden he is urging everyone to share is: the rich.
Yes, we should all stop focusing so much on ourselves, and think more about the plight of billionaires.
Lord knows they’ve been having a hard time keeping up (with each other). Luxury yachts — considered in some circles to be the true measure of a man — have been getting larger and larger. (In 1985, the world’s longest yacht measured 123 feet. Today, such a scrawny vessel wouldn’t make the top 100.)
And then all those Wall Street banks collapsed, just because the fabulously rich came up with clever ways to dupe unsuspecting poor people into believing that they too could own a home.
And now along comes Barack Obama with a budget plan that over the next 10 years would shift more than $1 trillion of the tax burden from the middle class onto high income earners.
In his column last week, Brooks saw this as evidence of a class war shaping up: "The U.S. has never been a society riven by class resentment. Yet the Obama budget is predicated on a class divide."
Really? This is the first sign of a class divide? Until Obama came along, the poor mingled comfortably with the rich, moving effortlessly through the security barriers surrounding America’s gated communities?
Obama’s decision to tax the well-to-do is no doubt creating nervousness among Canada’s financial elite, which so far hasn’t shown its usual keenness to replicate the policies of our largest trading partner.
Canada should also be thinking of raising taxes on the rich, to help us deal with deficits stretching far into the future.
Certainly Canada’s rich — although not as well-off as America’s rich — can afford to contribute more. Statistics Canada numbers show that while the incomes of middle-class Canadians have stagnated over the past 25 years, incomes at the top — particularly the very top — have soared. The richest .01 per cent (roughly 1,000 Canadian families) saw their average annual incomes (in inflation-adjusted dollars) rise from $3.6 million a quarter century ago to $8.4 million.
As their incomes rose, their taxes fell. For the top 1,000 families, the effective tax rate dropped by about one-quarter, StatsCan numbers show.
Canadian governments have argued that lowering taxes at the upper end spurs economic growth — even though there’s no evidence to support this contention.
Indeed, Canada’s top marginal tax rate was above 80 per cent from the late 1940s until 1970, and yet our annual economic growth in those years was above 5 per cent. In 1981, we reduced our top marginal rate to 50 per cent, and yet our growth rate has averaged only 2.4 per cent since then, notes Osgoode Hall tax professor Neil Brooks.
Similarly, U.S. marginal tax rates were above 90 per cent in the 1950s — a decade of strong U.S. economic growth.
This suggests high taxes on the rich are not the prosperity-killer that the rich claim.
One could accuse the rich of making this false claim in order to enrich themselves, but it hardly seems fair to criticize an oppressed minority.
Linda McQuaig is author of It’s the Crude, Dude: War, Big Oil and the Fight for the Planet.