The Rich Get Richer

Linda McQuaig notes in the Toronto Star that “Canada is becoming a much more unequal society”: the top one percent doubled their share of income from 1980 to 2000. (“When all taxes are factored in Canadians all pay the same relative amount,” Star, October 16, 2005).

This same week, The Economist laments that Britain is becoming less socially mobile: fewer people are able to move up the ladder (“Land of Hope and Glory,” Economist, October 8, 2005, p. 42). People born after 1970 are significantly less likely to have “escaped their class origins” than those born twelve years earlier.

Why?

Note that both nations have, at least for the last twelve years or so, been governed from the left. It is left-wing policies that are producing this result.

No surprise. A free market allows fortunes to both rise and fall. Greater government regulation protects vested interests and makes it harder for newcomers to break in.

But there’s more. This should freeze people at their income levels, but not give the richest such a big boost. Note that Canadian stat: double their share of income.

That, I submit, is probably the effect of feminism. A generation ago, working class women already worked outside the home, because they had to. Wealthy women did not. Today, upper class women also work outside the home, effectively doubling incomes at the top level.

This in itself would not be so bad; one woman’s wealth does not detract from the next person’s. But there is that matter of class mobility. When we double the number of upper-class people flooding in the workforce, there are a lot fewer crumbs to spill down to the unwashed. It becomes less likely for anyone to move up off the loading dock.

Affirmative action: welfare for the very wealthy.


McQuaig goes on to point out that, when all taxes are included, rich and poor currently pay about the same percentage of their income in tax. While income tax is progressive, property taxes and sales taxes are regressive. It ends up roughly a wash.

She thinks this is an argument for higher taxes on the rich.

But for the rich, taxes are always more or less voluntary. The rich are mobile. Tax them too heavily, close their loopholes, and they, or their taxable assets, are on the next westbound train. You cannot soak the rich without getting everyone else very wet.

To the contrary; if McQuaig is correct that rich and poor both pay the same proportion of their income in taxes, raising the tax burden harms everyone, and reducing the tax burden helps everyone.

The rich, indeed, probably still prefer big government, as they always have. Unlike the poor, the money they pay in taxes is excess to basic requirements. It is worth it to protect their social position and their assets; never mind the argument that government spends more on the priorities of the rich than those of the poor.

Everyone who works for government will, of course, also want bigger government.

And this is the coalition that rules us. This is the Liberal Party: the wealthy, and government employees.