Forget the concerns of the Occupy movement. Forget the cries that income inequality is increasing in Canada. Two recent reports have revealed that Canada has the wealthiest middle class in the world and that our income inequality is declining!
On April 22, 2014, the New York Times published an article entitled “The American Middle Class is no Longer the World’s Richest”. This article was based on analysis of data provided by LIS, a group that maintains the Luxembourg Income Study Database and serves a global community of researchers, educators, and policy makers. The Times looked at about 20 nations and found that, in 2010,Canadians bumped Americans out of the top spot for highest average after-tax income for the middle class, a position the U.S. held for decades. Why? Because, since 2000, median income in Canada has risen almost 20% compared to only a little over 1% in the U.S.
The most recent year in the LIS analysis is 2010. The Times article noted that other income surveys suggest that, since 2010, pay in Canada has risen faster than pay in the United States because Canada takes “more aggressive steps to raise the take-home pay of low- and middle-income households”.
Sure enough, this was confirmed when the Parliamentary Budget Office issued a report on May 27, 2014. This report showed that eight years of Conservative Government have been beneficial for taxpayers. Combined reductions in taxes since 2005 amount to more than $30 billion. Of that, $17 billion comes from lower personal tax rates, and $13 billion from the reduced GST/HST.
Furthermore, the PBO report also determined that “cumulative tax changes since 2005 have been progressive overall and most greatly impact low-middle income earners.” All taxpayers have seen their incomes rise as a result of the Conservatives’ tax reductions but the increases have been disproportionate, with low-middle earners seeing a 4% increase in after-tax income while high-income earners have seen only a 1% increase.
The bottom line is that Canada has had the wealthiest middle class in the world since 2010 and income inequality is declining in this country. Both findings – from vastly different sources – attribute our success to the Harper Government.
For years, the opposition has attacked Prime Minister Stephen Harper for policies they say favoured the rich at the expense of the poor and middle class. FALSE! The above reports clearly contradict these claims. The Conservative Government – not the Liberals or the NDP – are truly the guardians of the middle class in Canada!
