Thursday, June 23, 2005

The recovering rich

You have to love the way business news gets reported these days. In the Globe and Mail, on page B3, we read that a "high-profile Parliamentary committee" (actually a gaggle of Senators) is urging "across-the-board tax cuts." (Yawn). These would include abolishing the federal capital tax, cutting corporate income tax--and reducing personal income tax for middle and upper income earners.

On page B13, utterly disconnected from this corporate wet dream, a small headline informs us that "Canada's richest regain big share of income." The on-line version is oddly headed, "Canada's wealthiest regain touch," whatever that means. One of the many meanings of the word "touch" is "to solicit money," but I digress.

In essence, the sweaty toil of the top 1% of income earners in Canada presently garners them 13% of the total Canadian personal income. This is back to pre-WWII levels: during the war the share plummeted, and continued to drop until 1980, when it reached 7.5%. But (let us all breathe a sigh of relief here) at that point "the recovery started."

Back to Jerry Grafstein, the chair of that Senate banking, trade and commerce committee. Big tax cuts, he says, are the only thing that can fix our "lagging productivity." Economist John Kenneth Galbraith once said that the neoliberal philosophy amounts to this: "The poor have too much money, and the rich don't have enough." Nice that the latter have pals like Grafstein in their corner to help their recovery along.

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