Harper's tax credits..good or bad?

[cybercoma]

Not to mention the chart is US data anyway in a thread about "Harper's tax credits". All the data I've ever seen shows that the rate of divergence in incomes between upper and lower income earners in Canada is significantly slower than it is in the US.

Canadian distributions are worse. Below are charts that illustrate the share of total income with a focus on the top 5% and the top 1% respectively. You can see how quickly the disparity is growing.

[cybercoma]

Everyone's getting poorer relative to someone. I for one am happy as long as my own (inflation-adjusted) income is growing over time, even if someone else's might be growing faster.

Incorrect. The top 1% are getting richer relative to the bottom 99%. The top 5% are getting richer relative to the bottom 95%. And the point is that disparity is growing quickly. But again, you're playing semantics and ignoring the issue of growing income inequality.

Edited August 29, 2015 by cybercoma

[Evening Star]

Cybercoma, is your point that limitless economic growth is environmentally unsustainable and so we should focus more on making sure that wealth is divided more equally such that the poor are still doing OK instead of trying to make everyone richer (even if the rich are getting richer at a much faster rate)?

[Bonam]

Share of total income is not the relevant stat. Inflation-adjusted Individual/household income over time is.

[cybercoma]

I'm just saying that the current system does not fairly distribute economic gains. Those gains are increasingly being concentrated at the top. This isn't healthy for society because it creates growing inequality. There's mountains of evidence that the more unequal wealth is in a society, the worse off we are in terms of health measures and other social measures (like crime, education, etc). This doesn't mean we should aim for absolute equality because that carries with it a number of problems of its own, but the rapid increase in inequality needs to be addressed because it's going to become very costly down the road if it isn't.

[Bonam]

Incorrect. The top 1% are getting richer relative to the bottom 99%. The top 5% are getting richer relative to the bottom 95%. And the point is that disparity is growing quickly. But again, you're playing semantics and ignoring the issue of growing income inequality.

Inequality is an issue, but it's a much lesser issue when everyone's incomes are growing than if the bottom end of incomes are actually dropping. That is why inequality was such a powerful narrative during the financial crisis and the resulting economic decline/stagnation. Now that we're back to normal rates of economic growth, inequality is dropping off the radar again. To me, this suggests that while it's important to ensure that incomes are growing across the board, it's economic growth that is more important to ensure than equality. The economic system should be designed so as to generate the maximum possible rate of growth, and equality/inequality will take care of itself (this keeps in mind that the optimum rate of growth is achieved at some happy medium of inequality, not at either extreme).

Edited August 29, 2015 by Bonam

[cybercoma]

Share of total income is not the relevant stat. Inflation-adjusted Individual/household income over time is.

You'd certainly like it to be because then you can make the rising tide lifts al ships argument, which is bunk. Some ships are being raised by metres, while others are being raised by millimetres. This is a problem for our national health and welfare.

[cybercoma]

Inequality is an issue, but it's a much lesser issue when everyone's incomes are growing than if the bottom end of incomes are actually dropping.

That's irrelevant. We don't address problems by pointing to much worse problems and shrugging our shoulders.

That is why inequality was such a powerful narrative during the financial crisis and the resulting economic decline/stagnation. Now that we're back to normal rates of economic growth, inequality is dropping off the radar again. To me, this suggests that while it's important to ensure that incomes are growing across the board, it's economic growth that is more important to ensure than equality.

What people pay attention to, what the news reports, and what's important are not necessarily the same things.

[Bonam]

What people pay attention to, what the news reports, and what's important are not necessarily the same things.

Obviously. Nonetheless, I think focusing on growth rather than distribution is the correct approach, because as you've pointed out, society and the economy are healthiest (and thereby growing most quickly) at some intermediate level of inequality. Therefore, if you seek to optimize growth, you'll also optimize the level of inequality as a by-product.

Note all the employers considerably increasing their entry-level wages in the US, for example, now that economic growth has finally picked up and unemployment has returned to low levels. That will do far more for the incomes of the bottom quintiles of the population than any government policy designed to reduce inequality ever could.

Edited August 29, 2015 by Bonam

[-1=e^ipi]

@ WIP - your graph clearly shows all quintiles becoming richer. Thank you for supporting my claim.

So, who was talking about communism? The debate was comparing flat vs. progressive taxation.

Flat tax when combined with a guaranteed income can be as arbitrarily 'progressive' as you want. So arguing that a flat tax isn't 'progressive' enough is a non-argument.

[-1=e^ipi]

But again, you're playing semantics and ignoring the issue of growing income inequality.

How is it playing semantics to point out that both poor and richer people are getting richer? If you want to state that income inequality is growing that is one thing, but don't state untrue cliches as if they are fact.

Share of total income is not the relevant stat. Inflation-adjusted Individual/household income over time is.

The thing is we accept the pareto principle. Unfortunately, not everyone in this thread does.

Edited August 29, 2015 by -1=e^ipi

[Smallc]

How is it playing semantics to point out that both poor and richer people are getting richer?

It's not. It simply doesn't fit with his worldview.

[bush_cheney2004]

Not to mention the chart is US data anyway in a thread about "Harper's tax credits". All the data I've ever seen shows that the rate of divergence in incomes between upper and lower income earners in Canada is significantly slower than it is in the US.

Indeed...thank you for pointing this out. The data are not relevant to Canada.

It sure would be nice to get some CanCon data on a Canadian forum area about Canadian Federal Politics once in a while.

[cybercoma]

Obviously. Nonetheless, I think focusing on growth rather than distribution is the correct approach

It's the correct approach for developing countries, yes. It's not the correct approach for advanced industrial nations like Canada. In developing nations absolute growth is a far more important indicator of the nation's health and wellness. It relates much more closely to their infant mortality rates, average life expectancy, crime rates, etc. However, at a certain point, this measure becomes meaningless and it's the income distribution that's related to those metrics. Income inequality is what ends up killing advanced societies.

[cybercoma]

The thing is we accept the pareto principle. Unfortunately, not everyone in this thread does.

No. The issue is that you think growth is a one-size-fits-all predictor for the well-being of a state. It's not. It's perfectly fine for developing states, but after a certain point inequality becomes far more important.

[-1=e^ipi]

The data are not relevant to Canada.

But US data is so much easier and convenient.

[bush_cheney2004]

But US data is so much easier and convenient.

OK.....why is that ? Doesn't anybody analyze and publish such things in Canada ?

[Icebound]

There are 4 things that are essential to every person:

1. Healthy food ... To stay alive and reasonably healthy.... Mac and cheese doesn't cut it...

2. Health care... To prevent illness and to recover properly should it happen

3. Shelter..... To stay warm and dry, and

4. Transportation...to find a job and to get to it.

When we compare "rising incomes" of the 1% to the rest of us, are we subtracting the cost of these essentials, and comparing what is left over?..what is left for discretionary spending?

In spite of the fact that the lowest 70% might have "rising incomes" the cost of these essentials...housing especially...has been far outrunning those incomes, leaving most Canadians sliding backwards.

The cost of ANY production has to include payment for those essentials...whether as sufficient wage to allow individuals to provide for themselves, or as a cooperative effort to provide the service universally by government. If that cost is not included, there will be pitchforks in the streets.

...

[-1=e^ipi]

OK.....why is that ? Doesn't anybody analyze and publish such things in Canada ?

1. Economies of scale.

2. Harper hasn't made it easier to get good data.

3. Bilingualism makes statistics Canada inefficient.

[blueblood]

There are 4 things that are essential to every person:

1. Healthy food ... To stay alive and reasonably healthy.... Mac and cheese doesn't cut it...

2. Health care... To prevent illness and to recover properly should it happen

3. Shelter..... To stay warm and dry, and

4. Transportation...to find a job and to get to it.

When we compare "rising incomes" of the 1% to the rest of us, are we subtracting the cost of these essentials, and comparing what is left over?..what is left for discretionary spending?

In spite of the fact that the lowest 70% might have "rising incomes" the cost of these essentials...housing especially...has been far outrunning those incomes, leaving most Canadians sliding backwards.

The cost of ANY production has to include payment for those essentials...whether as sufficient wage to allow individuals to provide for themselves, or as a cooperative effort to provide the service universally by government. If that cost is not included, there will be pitchforks in the streets.

...

The problem with rising housing vs rising incomes is the blatant stupidity of a lot of the population. Houses used to be smaller and were fine, but a lot of stupid entitled people decide to take out huge mortgages and drive up the housing market on debt. Rich people didnt cause that.

400,000 dollar homes on the prairies on a 50,000 salary? I mean c'mon man!! No wonder wealth is under attack. Instead of blaming and hating rich people, people need to take some reaponsibility and save their money

[Icebound]

The problem with rising housing vs rising incomes is the blatant stupidity of a lot of the population. Houses used to be smaller and were fine, but a lot of stupid entitled people decide to take out huge mortgages and drive up the housing market on debt. Rich people didnt cause that.

400,000 dollar homes on the prairies on a 50,000 salary? I mean c'mon man!! No wonder wealth is under attack. Instead of blaming and hating rich people, people need to take some reaponsibility and save their money

You are partially correct.

But developers ....with their city planner friends ....do not want to build $100,000 homes. They want to extract the maximum out of us, and our "leadership" is not encouraging otherwise.

[Topaz]

Today, on the news, I heard that in Canada, Canadians are paying 42% of their pay is in taxes, this includes all 3 levels of government and ALL taxes paid. So with anyone under 20,000. not paying income taxes and anyone over 100-150,000. doing better, the rest of us,are not doing very well and that's why some say, forget the credits and reduced the income tax rate and it would help if the feds gave more money back to the provinces, so WE wouldn't have a chain-reaction down the 3 levels of government were the taxpayer always take the fall.

[Icebound]

Y

Today, on the news, I heard that in Canada, Canadians are paying 42% of their pay is in taxes, this includes all 3 levels of government and ALL taxes paid.

That is a nice stat.... but even if true... It is a useless stat.

It is not like your 43% is not paying for useful stuff that you and your neighbours need... not the least of which is providing a government, judicial, and social infrastructure that keeps you relatively violence-free.

Now, it IS fair to ask and investigate how efficiently that money is being spent.... But the number by itself it totally useless.

[blueblood]

You are partially correct.

But developers ....with their city planner friends ....do not want to build $100,000 homes. They want to extract the maximum out of us, and our "leadership" is not encouraging otherwise.

But once again people are still stupid enough to fork over the dough with huge mortgages. Let the houses sit and the demand dry up. Why is it up to leadership? Are people too stupid to manage money?

[bush_cheney2004]

1. Economies of scale.

2. Harper hasn't made it easier to get good data.

3. Bilingualism makes statistics Canada inefficient.

OK...but those are excuses, not good reasons. Has little to do with Harper or any other PM. The Canadian data surely exists somewhere...in government, academia, and business. Discussions of tax credits, tax "cuts", and other revenue changes in Canada should easily spark interest and bring such information to the fore. Yet, time after time, and despite being largely irrelevant, we see references to U.S. data and trends because it is "easier". And it is so commonly accepted that few even bother to dig deeper for CanCon stats.

Any mention of sources like the Fraser Institute automatically moves attention to "right wing" bias and motives, regardless of the underlying data or analysis.

Edited August 30, 2015 by bush_cheney2004