Playing politics of envy


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Behold the curious role reversal.

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Hey there, time traveller!
This article was published 06/07/2011 (4234 days ago), so information in it may no longer be current.

Behold the curious role reversal.

The political right has always accused the political left of fomenting the politics of envy and class warfare because it criticizes social and economic inequality and the growing gap between rich and poor.

Today, as that gap widens to chasms not seen since the early years of the last century, if not before, the political right has suddenly turned the tables, appropriating the politics of envy itself to step up its new war against unions and free collective bargaining.

The Air Canada and Canada Post labour disputes triggered a wave of media commentaries and editorials trying to stir up class envy among the private sector’s largely non-unionized taxpayers because they’re being “forced” to pay the “bloated” salaries of public-sector union “fat cats” and “aristocrats.”

This bait and switch steers everyone away from the real issue, the massive upward wealth shift occurring in Canada, the U.S., and, to a lesser extent, Europe.

Political scientists will tell you that democracy rests on the social and economic stability created by a large and vibrant middle class. Countries with a tiny fabulously wealthy elite and everyone else barely keeping their heads above water are unstable, violence-ridden and decidedly not places most of us would want to call home.

Maclean’s May 1 issue compared the salaries of Canada’s 50 top CEOs in 1995 to 2007. “Read ’em and weep,” it wrote. “In the past 12 years, there’s been a 444 per cent salary increase for Canada’s top CEOs. The top 10 earners collected a total of $60.7 million in 1995. By 2007, that number had jumped to $330 million.”

Canada’s richest 0.1 per cent, the 25,000 Canadians with average annual incomes of $1.5 million, have made spectacular income and wealth gains over the last three decades while the earnings of the vast majority of Canadians have remained stagnant or fallen after inflation.

This top 0.1 per cent have more than doubled their share of the national income pie, something not seen since the 1920s.

“By 2009, the worst year of the recession, the wealthiest 3.8 per cent of families had captured a stunning two-thirds of all financial wealth in Canada,” says Bruce Campbell, executive director of the Canadian Centre for Policy Alternatives. “Since 2000, they have persuaded governments to cut taxes and shrink the federal treasury by a mind-boggling $420 billion.”

Sixty years ago, Canada’s top earners paid an income tax rate of 80 per cent. Today, they pay at 42.9 per cent. The proliferation of government tax shelters, most recently, tax free savings accounts, means Canada’s wealthiest 0.1 per cent now pay less tax overall as a portion of income than the poorest 10 per cent.

The capital gains tax cut “stands as the biggest single income grab from the federal treasury by the wealthy in Canadian history,” Campbell continues. The multibillion-dollar corporate tax cuts are not being invested in plant and equipment but siphoned off in shareholder dividends and executive salaries and bonuses.

“This high level of economic and political inequality is corroding the quality of our democracy and eroding our sense of who we are,” Campbell warns. “Our image of ourselves as a caring and sharing society is now a fading reflection of a past that no longer exists.”

The bulk of Conservative tax initiatives direct even more wealth to that same 0.1 per cent.

The media abound with stories on how to bundle up the value offered by the new tax-free savings accounts with RRSPs and RESPs. But you need at least $100,000 to get maximum value from doing so, says CCPA economist Armine Yalnizyan.

That excludes 80 per cent of Canadian households. Even before the last recession, 3.3 million Canadians already fell below Statistics Canada’s low-income cutoff and 10 per cent of Canadian households lived on less than $16,000 annually.

Income splitting is another Harper bonanza for the rich. A 2006 Library of Parliament study showed fully half of all Canadian families, those with incomes of less than $60,000, would realize just eight per cent of the benefit. The rest goes to the wealthiest families. The poorest, single-parent families, get nothing at all.

Elderly benefits follow a similar pattern. Compare the Conservatives’ pension-splitting scheme for rich seniors to its meagre increase in the guaranteed annual income supplement for the poorest. The former costs the treasury over $920 million, the latter just $300 million.

Given this cornucopia of rewards for the richest Canadians, trying to foment class envy against postal workers and other public servants should be seen for what it is — an attack on democratic values and democracy itself.

Frances Russell is a Winnipeg

author and political commentator.

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