Good or bad, we are the 1%

          It’s not often I agree with Maclean’s right-wing columnist Andrew Coyne, but he had a point in last week’s article when commenting on the recent “Occupy” protests.  The Occupy Wall Street protest that began in New York is a movement against the growing inequality in the US, particularly targeted against the wealthiest 1%.  They suggest that the rest of us (the 99%) have not shared in the same benefits.  Hence the slogan, “We are the 99%.”

          Coyne’s point is that while there are many reasons to protest in the US (high unemployment, the housing crash, the bank bailouts), there isn’t the same populist rage in Canada to justify an “Occupy Toronto” or, even worse, an “Occupy Laird” (where the top 1% pump your gasoline).  Since the 2008-09 recession, Canada’s unemployment rate has gone down, median incomes continue to rise (since 1993, apparently), and poverty is at a 40-year low. 

          There’s no escaping the fact that Canada’s wealthiest 1% have seen a larger increase in income than the rest of the country.  But it’s actually the 0.1% that have seen the big increases, according to Coyne’s research.  These are largely hockey players (I jest a little, but it’s true) and corporate executives whose shareholders have awarded them massive payments because they feel they’re worth it.  Perhaps the shareholders are deceived, but they certainly don’t mind taking the losses to pay these salaries.

          Interestingly, the top 1% of income earners in Canada earn 11% of the country’s wealth and pay about 25% of all income taxes.  In the US, they earn about 20% and pay 38% of the taxes.  Even more interestingly, 20 years ago, Canada had twice the top marginal tax rate on the wealthy, but they still paid the same amount in taxes.  So we know that while the wealthy enjoy benefits, they carry much of the burden as well – and they should.  And if we burden them too much, they might just find some way to avoid the tax anyway (funny how the wealthy can always find a way).

          But here’s where I really agree with Coyne.  The problem is not really the wealthiest 1% – it’s the bottom 1%, or more likely the bottom 10%.  Poverty continues to be a reality in Canada and the US, and can only be solved through greater investments in this area.

          Investing in social programs has been a hallmark of Canadian society.  Strong social programs, universal health care being the most notable, are what set us apart from the US.  Under our current political regime, unfortunately, this appears to be in decline. (You may have noticed that our prime minister lacks socialist tendencies, unless it involves sending people to the Gulag.)

          Social assistance payments are still a far cry from what they should be in Saskatchewan and other provinces.  For those who are unemployable or single parents in difficult circumstances, there shouldn’t have to be a choice between food or shelter.  Children in these homes are less likely to have the same opportunities as children in other homes, thereby driving the poverty cycle.

          Coyne notes that if we were to seriously address poverty in Canada, it would cost about $12 billion – a 2% increase in the GST would cover it.  That’s not too much of a sacrifice, yet I presume most middle-class Canadians would balk at paying 7% GST again.

          To take it a step further, I wonder what it would take to reduce global poverty to the point that children no longer die from starvation or preventable diseases.  Skimming 1% in tax off the world’s wealthiest 1% would probably solve this – not a huge sacrifice either.

But who are the world’s 1%?  As it turns out, if you earn $55,000 per year, you’re a member of the elite (break out the champagne!).  This group earns as much as the world’s bottom 57%.  Now that is staggering.

          In that case, most of us can say, “We are the 1%.”

          I have a feeling the slogan won’t be quite as popular.

This is an interesting website to see how relatively wealthy you are: http://www.globalrichlist.com/

Andrew Coyne’s article: http://www2.macleans.ca/2011/10/24/a-phony-class-war/?utm_source=_BOqxfRB8eOlP3f&utm_content=ml14&utm_medium=email