Opinion-Policy Nexus

A national election campaign is, or should be, the centrepiece of our democratic system, a time when great and important ideas – policies vital to the nation’s future – are debated before the jury of electors.

That’s the theory. In practice, big ideas make most political leaders nervous, especially during elections. They find it expedient to narrow their focus, to emphasize proposals with immediate or short-term electoral appeal, and to expend their energy on attacking their opponents.  

The current 2019 exercise in democracy is following the familiar pattern.

Yet there are issues that cry out for national debate.

One is income disparity – the widening gap between rich and poor, between those who have the means to afford whatever their hearts desire and those who live from paycheque to paycheque (if they are fortunate enough to collect one). Or, as it is framed these days, the gulf between the “one per cent” and the rest.

An improbable story in the Washington Post last week caught my eye. It was written by Abigail Disney. Yes, one of those Disneys. Abigail is the granddaughter of Roy O. Disney who, with his brother Walt (Abigail’s great-uncle), co-founded the entertainment behemoth that still bears the family name. At 59, she has gone her own way as an independent film producer and philanthropist.

In the Post article, she called out Disney for the “naked indecency” of paying its CEO Robert Iger the “insane” amount of $65.6 million (his take-home in 2018). “That’s 1,424 times the median pay of a Disney worker,” she wrote. “To put that gap in context, in 1978, the average CEO (in the U.S.) made about 30 times a typical worker’s salary. Since 1978, CEO pay has grown by 937 per cent, while the pay of an average worker grew just 11.2 per cent.”

In interviews elsewhere, she sharpened her critique. “No one on this freaking planet is worth that kind of money,” she said.

That may be true, but in fairness to poor Iger, his net worth is estimated at a paltry $350 million, compared to Abigail’s inherited $500 million. A filthy rich pot calling an extravagantly wealthy kettle black?

Still, the point was worth making: the huge income disparities between the top, the middle and the bottom are tearing the fabric of society, damage that has become more pronounced since Donald Trump started handing out tax breaks to the rich while cutting back programs for low-income Americans.

Income disparity and the inherent unfairness of the tax system is a potentially explosive political issue in the United States, where Warren Buffett, the world’s third richest man, candidly confesses that his marginal tax rate is lower than his secretary’s.

Two contenders among the legion seeking the 2020 Democratic nomination are proposing to shift more of the burden to the top one per cent.  Bernie Sanders has been vocal on the issue for years, while Elizabeth Warren is calling for an “ultra-millionaire tax” – an additional two per cent on households with a net worth of $50 million-plus and three per cent on those worth more than $1 billion.

In Canada, the Conservatives have no interest in making the rich pay, while the Liberals proceed with cautious mice steps.

Justin Trudeau promised in the 2015 election to reduce taxes on middle class families and to increase them on the wealthiest. The changes, which came into effect on Jan. 1, 2016, reduced the tax rate from 22 per cent 20.5 per cent on incomes between $45,283 and $90,563, a move that benefited 43 per cent of taxpayers. Meanwhile, a new top tax rate of 33 per cent on incomes above $200,000 was expected to cost the top 1.4 per cent of taxpayers an average of $5,255.

Middle-income earners did benefit, but the gap did not narrow. The poorest half of Canadians still hold only 4.5 per cent of the country’s wealth while the country’s billionaires managed to increase their collective wealth by $20 billion in the past year.

Posted

Tuesday, April 30, 2019 - 09:44

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