Missing Middle Class

FTLComm - Tisdale - Wednesday, July 9, 2003
If you are a regular reader and visitor to this web site you are familiar with the various contributors who toss in their two cents worth almost on a weekly basis. Each and every one tells their story with sincerity and willingly share with us all their views of a sometimes pretty confusing world. As I have mentioned before, I really want to see a wide range of opinion, because I like everyone else in this world, need to know what others think and that complex process shapes our own thoughts.
Yesterday Walter Robinson told us how the federal taxes in Canada are paid and what proportion of the population participate and to what extent. For those of us in Western Canada the very idea of tax money going to Ottawa seems ridiculous, since we have a federal government run by Quebec for Quebec. Well of course that is not completely true, the federal government did once spend money in Western Canada, but only on a provincially shared basis. I realise that sounds a bit on the bitter side, but we in Western Canada really need to know about the weather and have airports and highways and those sorts of things, but like the railroads those are things of the past.
I want to take a minute of your time to talk about Walter Robinson's discussion on taxes and mostly, the last paragraph in his story where he feels that the rich in Canada are taxed enough and are paying their share.
Now it should be pointed out that Walter is not a rich guy worried about his assets, he is a working guy with a good business education, who sees the world from the perspective available from his educational background. We must respect his view point from that perspective, but we also need to realise that things look a lot different from the angle at which they are seen.
It is unfortunate that many of you who read this, and many of the politicians you will and have voted for in the past, share Walter's view of the world. I really can't help feeling a bit sad about this because I remember being a freshman in college. As an arts student I had to take physical education with commerce students and I was shocked to discover that they had so much in common with each other and were so different in their outlook on life from me, that I often wondered what would become of them
There are two things that create wealth in a society, creative innovation and courage to take a risk. Entrepreneurs the world over and throughout time have foster these two characteristics and a few have been successful. Consider if you will, why someone enters "commerce" or a "masters of business" (MBA) programme and you will discover they are looking for a sure thing. No risks, "count the money and tell others how to run things." They as a group are the least innovative, least creative and have the lowest level of courage available, yet over and over we are seeing people with this education and background being placed in charge. Why the United States even has one of these folks as their president.
In the break down of the tax payers and their role played explained by Walter Robinson you will have discovered that 83.5% of the taxpayers in Canada pay one third of Canada's federal taxes. This fact shocked me because it means quite simply almost nine out of every ten people in this country is poor, earning an average of $19,380 a year. That simply sucks. The question Walter did not ask is why are there so many folks in a country as wealthy as this one, earning so little?
Having grown up in the 60s, I and many of my peers, came from the middle class or moved into it simply because of the affluence of the 60s meant that my working class father and mother seen to it, that I got a college education. Now in the statistics, Walter reports that the middle class is now 13.8% of all Canadians. WHAT!!!! This group of people shoulder about one third of the federal taxes in the country.
Only 598,700 Canadians earn more than $100,000 a year and Walter notes that they are a mere 2.7% of the people who pay taxes and pay 31.7% of the federal taxes in the country. To this Walter concludes:
The lesson learned from this book is clear. Should we tax the rich more? No, they already pay their fair share.
Earlier he notes:
Tax the rich more? Lets not put the cart before the horse. Perhaps our economy could first foster more wealth creators and innovators.
I see no reason to disagree with Walter's conclusion, but the issue is exactly what he says. Putting the cart before the horse. Income is dependent upon earning ability, pure and simple and that is the horse in this argument. The cart "taxes" is not what a society is about, for indeed, what poor person would not dearly love to be able to pay more taxes. The problem is the horse.
What we need is not to reduce taxes as Walter pleads over and over, but we need more wealth. We need people who earn more and can contribute more to the society. Every citizen has that as their goal even if they do not realise it, (well perhaps except for the complaining wealthy who always want more, more, more, more)
Canada's middle class is under attack, we are becoming a smaller and smaller entity each and every year. As we become fewer the lower working class, those earning low incomes and those not earning enough to pay taxes, are growing in numbers, unprecedented since the 1930s. If Walter gets his way and taxes are cut, will this make a larger middle class, or will it just increase the wealth of the half million higher earning Canadians?
So let's look at some practical solutions and look first at the bottom. Poverty is a blight on the whole society and we must first start by increasing social assistance to all people unable to earn a living. If we claim we can not afford to do that, than we do not deserve to enjoy the standard of living we now enjoy.
The second measure must be to increase the minimum wage to $10 instantly creating a whole bunch of tax payers and at the same time we need provincial legislation to slam dunk part time work so that any company depending on part time workers must pay the equivalent of each part time employee's salary in taxes, so that we as a society, can support them. Instantly, you with the MBA mentality will be cringing as you realise that this would smash the fast food chains and a whole raft of other big businesses who would wail and either sell out or shut down. Since almost all employers are American owned corporations this would be a good thing.
If you haven't figured it out yet, our Canadian economy is tortured and so are our tax payers because the profits from almost all Canadian business, be it in manufacturing, retail or service is foreign owned and the owners demand and get more than 10% of their investment every year in profits, while you are lucky to get 2% on your investments. That money goes home. Not to wealthy Canadian tax payers, but to very rich people in other countries.
Now for the secret to success. If you want to transform this society, spend your money, every taxable cent you can find, on making this a better culture by investing in education. From kindergarten to graduate school, improve the lives of the people of the generations to come, by giving them the best education that money can buy. Innovators, scientists, risk takers are arts and science students who will create a world of their own if given half a chance and that chance is pure and simple book learning.
But look what our society is doing with education. Post secondary schooling is the means to creating a viable and powerful tax paying middle class yet we are seeing college tuition going up at a rate four times the inflation rate. Education is now by the elite for the elite and the trend continues to see the rich training their offspring to be business administrators, non-risk takers, non-innovators, people who play it safe and will never turn a buck for their country that they can't dodge with a tax loop-hole.
Sure Walter let us not over tax the wealthy, but let us instead create more wealthy people, reducing the burden for all people and making a damn better country for everyone. As long as the spread between the rich and the poor grows, the standard of living for everyone is devolving. Employers need to realise that to stay in business they need to boost not their company profits, but make better products, increase sales and provide better service and to accomplish those goals, they need a workforce that can rock.

Timothy W. Shire



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Editor : Timothy W. Shire
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