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Tuesday, June 17, 2014

The Great Divide in Canada

According to the tax study Piercing the Veil, the top 13 per cent of after-tax income in Canada goes to the top one per cent of income earners, with an additional $100,000 added to their income each year through private corporations they control.

And the ultra-rich – the top 0.01 per cent – earned $2.7 million to $3.5 million each through such corporations, money that would not ordinarily be measured when Canadian researchers look at income inequality.

While only five per cent of Canadians that fall in the bottom half of income distribution hold any stake in such corporations, they are heavily used by those in the top one per cent, with at least 65 per cent holding shares.

The wealthiest 1% earn 10 times more than average Canadian. Rich got 14.6% richer in 2013.

Michael Wolfson of the University of Ottawa, and professors Mike Veall of McMaster University in Hamilton and Neil Brooks of York University in Toronto, points to the role of tax planning in lowering tax bills for the wealthy and conclude “income inequality is higher than conventionally measured.”

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