INEQUALITY IS NOT WHAT IT USED TO BE. It never used to be something we talked about much. Now, we talk about it all the time. That’s a good thing says Lars Osberg.
“The discourse on inequality, has changed dramatically in the past five years” says Osberg, a Dalhousie University professor of economics, whose life’s work has made him a world authority on the subject of inequality.
Osberg believes that even though the gap between the rich and the poor has widened since the 1980s, a shift is coming.
He recalls that six years ago, in the 2015 federal election, taxing the wealthy was simply not on the table. Even the NDP campaigned on a balanced budget while proclaiming that income tax rates beyond 50 per cent were out of the question.
The pandemic changed a lot of that: billionaires’ made headlines finding ever more preposterous ways to flaunt their ballooning billions; tent cities of homeless filled more and more public spaces; food bank lineups stretched longer and longer. The inequality gap grew. It became impossible not to notice—or so easily accept.
“COVID-19,” says Osberg, “has given a huge shock to inequality and political perceptions.
89% favour a wealth tax
An August 2021 an Abacus Data poll found that 89 per cent of Canadians want a wealth tax, and 92 per cent favour closing tax loopholes that allow corporations to hide profits in tax havens.
In his 2018 book, The Age of Increasing Inequality: The Astonishing Rise of Canada’s 1%, Osberg points out that in the past 40 years the historic gap between the rich and the rest in this country has broadened dramatically — to toxic levels, in fact.
The top one per cent of the One Per Cent doing the best of all.
Real income growth for most of the rest of us has been stalled all that time.
Whatever happened, he asks, to the historic bargain that was struck in this country after the Second World War? “The rich, the middle class and the poor,” he writes, “all shared in economic growth.”
The incomes of the rich were then taxed at 70 per cent, not 30 per cent as now. To revert to those old levels today could net some $26 billion.
Osberg takes the long view when it comes to change. But nothing can resist change when it’s time has come. It’s not unreasonable to think we’re getting to that point.
A minimum tax on corporate wealth was long seen as a pipe dream. Not now. Some 140 countries have just agreed to a minimum global corporate tax of 15 per cent as an antidote to the use of certain countries as tax havens.
“It is a sign of change,” says Osberg. “The devil is always in the details, however, as to what will be counted in taxable income, and therefore how much this minimum is actually enforced. Maybe the tax rate should be higher, but that can come later. Multinationally-agreed, minimum corporate tax rates weren’t coming at all for many years.”
Nobody loves a billionaire
Washington Post columnist Helaine Olen recently noted: “Billionaires are on a collision course with the rest of us. Survey after survey shows a solid majority of Americans believe that the rich in general and billionaires in particular are not paying their fair share....”
The director of the United Nations’ World Food Programme recently challenged billionaires (specifically Jeff Bezos and Elon Musk) to “step up now, on a one-time basis” to end world hunger.
“$6 billion to help 42 million people that are literally going to die if we don’t reach them. It’s not complicated,” he added.
Musk has a net worth of nearly $289 billion, a $6 billion donation represents just 2% of his fortune.
Opinion polls in Canada show overwhelming support for a new wealth tax on the rich.
Osberg talks about “the exploding international literature” on the subject of income inequality. He belongs to a non-profit association called the Society for the Study of Economic Inequality, founded in 2005. It includes some 300 researchers, academics, policy-makers and activists from 70 countries — and their number is growing.
Whether or not gross inequality exists is no longer a question. The burning question now is whether all the talking about it will finally bring action to shrink it back to levels that no longer leave a tiny fee with way too much and way too many with not enough.
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