Inequality

Helping the Wealthy at Your Expense

From NUPGE

A recent study (link is external) by Jonathan Rhys Kesselman, who holds the Canada Research Chair in Public Finance with the School of Public Policy at Simon Fraser University and who is a fellow at the Broadbent Institute, shows doubling the amount people can contribute to a tax free savings account is Robin Hood in reverse. Poor and middle-income Canadians will pay so the wealthy can get more.

You need $200,000 a year to benefit

According to the study, Double Trouble: The Case Against Expanding Tax-Free Savings Accounts to get a significant benefit from the increase in tax free savings account limits people will need an income of at least $200,000 per year.

It’s not hard to figure out why. Most of us don’t have a lot left over once we’ve paid for things like housing, groceries and a car or bus pass. For what we are able to save, the existing tax deductions for tax free savings accounts and RRSPs are more than enough.

$24.5 billion less for services like health care and education

But while most of us won’t benefit, we will pay for any increase in the tax free savings account limit. It’s estimated that the cost of this tax break will grow to the point where it’s costing $24.5 billion a year — $15.5 billion from the federal government and $9 billion from provincial governments.

One of the biggest myths politicians peddle is that tax cuts for the wealthy don’t cost anything,” said James Clancy, National President of the National Union of Public and General Employees (NUPGE). “We pay a huge price for those tax cuts through things like user fees, longer wait times in hospitals and higher college or university tuition for our children.”

We get more from public services than from tax breaks

While it was beyond the scope of the report, the reality for most families is that we all benefit more from a dollar put into improving public services than a dollar spent on tax breaks. For a household with a median income, the value of the public services they use will be 63 per cent of their income. So when there is a surplus, why not put it into services that make life more affordable for everyone?

Ontario Judges Declare that Housing is Not a Human Right

From People’s Voice

The first week of 2015 was bitterly cold in Toronto. The first week also saw the homeless population of the city decline ‑ not due to the housing policies of newly elected mayor, John Tory, or better affordability of rental housing. It dropped because two of Toronto’s homeless froze to death.

Mayor Tory and his Public Health department argued about when an “extreme cold weather alert” should be announced, and by whom. Tory also announced that two additional warming centres would be opened. Activists in the Ontario Coalition against Poverty (OCAP) saw this as a partial victory for their activities and pressure.

Torontonians responded by holding a candle‑light vigil by the bus shelter where the first homeless man was found frozen to death.

And the Toronto Star editorialized that the deaths “seem less a problem of flawed policy and more an error in judgement on the part of public health authorities.” (see “More flexibility is needed in issuing extreme cold weather alerts.” January 8, 2015)

But it was indeed the policies of the federal, provincial, and municipal governments that killed those two men, as well as the 158 people who died in Toronto’s shelters between between 2007 and 2013.

The vacancy rate in Toronto is 1.6%. A “healthy” vacancy rate, according to Canada Mortgage and Housing Corporation (CMHC), is 3%. Toronto’s official unemployment rate for adults is 8.8% while youth unemployment stands at17.6%. The national average is 7% and 13.4% respectively.

Federal governments over the last 20 years made it harder to receive unemployment insurance. There is still no national housing strategy, drawing the condemnation of United Nations. On any given night, 235,000 people in Canada are homeless. In the next three to five years federal subsidies to non‑profit co‑op housing will end. Thousands of families living in rent‑geared‑to income units will face eviction.

(more…)

The Rich Get Richer Again

From People’s Voice

Welcome to 2015. Unless you are Gerry Schwartz or another one of Canada’s 100 highest paid CEOs, you actually have to work for a living. Or perhaps you are retired or a student, having worked all your life or hoping to land a decent job. In either case, Mr. Schwartz and his pals earned more before lunchtime on the first working day of January than you will during this entire year… on average, of course. If you have a higher‑paying job than most, it could take one of the top 100 until quitting time to match your 2015 income. On the other hand, a minimum wage earner was left in the dust by morning coffee break.

The annual CEO pay review published by the Canadian Centre for Policy Alternatives (CCPA) drives the corporate elite bonkers. It’s not fair, whines the Fraser Institute: the CCPA counts stock options and other perks as compensation! Even worse, the CCPA leaves out lower-paid executives, who would drag the CEO average figures down to “reasonable” levels.

Oh, boo hoo. Mr. Schwartz was paid $87.9 million in 2013, but even Number 100 took home $4.14 million, an increase of 30% over the 2008 figure. Working people were smacked hard by the capitalist crisis of 2007‑08. But after an initial drop, pay for the top 100 soon rebounded to pre-crisis glory days, to an average $9.2 million, or 195 times the average Canadian income of $47,358. These big bosses “earned” 237 times the average salary of women employees, showing that some things really never change.

And here’s another nugget to consider: 43 of the top 100 CEOs have a defined benefit pension plan worth an average of $1.39 million a year, and 75 received stock options as part of their 2013 pay package, worth an average of $3.16 million.

Yes, it’s tough for the ultra‑rich when their wealth is exposed for the world to see. Before long, people will start talking about taxing the greedy, not the needy. Will the horror never end?

By the Numbers: The Wealth Gap

From UFCW

Toronto – January 14, 2015 – According to a new poll by the Broadbent Institute, an overwhelming majority of Canadians believe income inequality has worsened in the last decade. To address this inequality, 73% of those polled say that the government can – and should – do something to reduce the gap between rich and poor.

67.4%

The wealthiest fifth of Canadians, or top 20% hold, more than two-thirds (67.4%) of the wealth in Canada.

0.1%

While the wealthiest fifth hold more than two-thirds of the economic wealth in the country, the poorest fifth, or bottom 20% – own almost no share at all; just 0.1%.

91%

An overwhelming number of Canadians (91%) believe that income inequality exists in Canada.

80%

Four out of five Canadians believe that the gap between the rich and everyone else has widened over the last decade.

73%

Three in four Canadians (73%) believe the government can do something to reduce the gap between the rich and everyone else.

75%

Three out of four Canadians support increasing corporate tax rates back to pre-2008 levels to address inequality.

62%

More than half of all Canadians support taxing capital gains and stock options at the same rate as wages to address inequality

80%

Four of the five Canadians support increasing the federal income tax rate on the highest income bracket.

83%

Percentage of those polled who object to further tax cuts tax cuts that may increase the gap between the rich and everyone else

68%

Percentage of those polled who support an increase in funding for social assistance to low-income Canadians.

69%

Seven out of 10 Canadians support a publicly funded national child care program to address income inequality.