Trudeau must be bold in tackling inequality

Posted on January 18, 2016 in Equality Debates – Opinion/Readers’ Letters – Re: Four ways Trudeau can tackle income inequality, Opinion Jan. 13
Jan 18 2016.   Ali Orang / Christopher Thomas

While Carol Goar’s ideas on income inequality can make a difference, Canadians should expect much more from Justin Trudeau. Undoubtedly, his government’s policies (such as infrastructure investment and tax plans) will help to alleviate inequality. However, he will have to be more deliberate and specific.

The problem of inequality is too serious and too complex to tackle it covertly – only because a more explicit and aggressive plan might alienate and anger business elites, as Carol Goar puts it.

The root of the problem goes back to over 35 years ago when the West bought into the idea that governments should clear the way for business to run the economy. So the wealth would automatically be created and distributed fairly. The wealth was indeed created but it failed to be distributed fairly.

Various credible reports (such as the Organization for Economic Co-operation and Development’s report) put Canada near the top of income inequality among the industrial nations. This is on a par with the studies that have shown Canadians believe Canada has become a less fair country. Without concerted and careful government actions, the gap will widen. The income of the overwhelming majority of Canadians has been stagnant for many years, while the top earners’ income has increased.

The Trudeau Liberals’ plan in tackling poverty and inequality should include an increase in social spending, a flexible employment insurance program, and a more serious tax reform. A rollback from taxes that have been cut from the rich and big business in the last 35 years would be a good point to start.

Ali Orang, Richmond Hill
I would like to suggest a fifth, barely hinted at in Carol Goar’s column: modestly increasing rates of taxation on corporate profits, rather than simply the compensation of executive officers. Only Thomas Mulcair and the NDP dared broach that possibility in last fall’s federal election campaign, and, frankly, I thought they did so rather quietly and on tippy-toes.

Their proposal was for an increase on the taxes of profits of large corporations from 15 per cent to 17 per cent. Given the tax burden on individual Canadians – I, a retiree with an annual income of about $40,000, pay at a rate higher than that – given also some rather sensational increases in corporate profits in recent years (like the banks), given the legal theory of the corporation as a person, and given the higher (some much higher) rates charged of corporations in most comparable countries, a modest increase to the taxation of profits earned in Canada seems to me a fair and obvious solution to the financial dilemma facing the new Liberal government and its finance minister, who is going about the country looking for ideas.

Why are we haggling about incurring a budgetary deficit of up to $15 billion to pay for much-needed social, health, and educational improvements and infrastructure when a solution is staring us in the face and when that that solution is on the revenue not the expenditure side?

Show some courage, Justin Trudeau and Bill Morneau, and start to demand that large corporations pay their way in Canadian life — corporations which by and large have done little to moderate unemployment and, too often, much to avoid even the low taxes they have been charged.

Canadians look to you not to behave like yet another Party of Business but to become what we hoped you would be when we elected you — a Party for Canada!

Christopher Thomas, Toronto

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