As self-defined sunny ways give way to increasing concerns about the economy and the jobless rate, the haze of reality is on the horizon.
The Prime Minister wrapped his arms around most of Canadian society with an election campaign of inclusion. The Liberals were rewarded with a national mandate and true national representation. But the victory also owed some credit to the politics of exclusion; namely, the marginalizing of the wealthiest in society.
The fashionable but intellectually lazy labelling of the “one per cent” fits well with modern discourse. It is an easy sound bite and pits a faceless, presumably undeserving elite against everyone else. Overtaxing the most financially successful is the language of unthinking class warfare, which was unfortunately well-rewarded by voters. The problem is that making wealth a wedge issue isn’t good policy. This year’s federal income tax hike on those earning more than $200,000, combined with similar moves in several provinces, puts the top marginal income tax rate at more than 50 per cent in most of the country. In Quebec, every dollar of earnings over $200,000 gets hit with a federal-provincial tax rate of 53.3 per cent. In Ontario, paycheques above $220,000 are now taxed at 53.5 per cent. Economic warning lights should be flashing.
And it turns out that the Trudeau government’s big tax increase on the wealthy doesn’t come close to raising enough money to compensate for the shortfall in federal revenues created by a small tax cut for the middle class. Both the government and the independent Parliamentary Budget Officer concede as much. Instead of filling a fiscal hole, the overtaxing of highest income earners has dug Canada a new one. The move wasn’t an answer to a sudden economic need; it isn’t clear what its purpose was at all, apart from vicious politicking. There should be a severe allergic reaction when the tax code is changed for political convenience.
The sawing off of wealth at a convenient round sum of $200,000 is nothing more than crass populism. It ignores merit-based economic success stories. It penalizes the PhD engineering grad at the University of Waterloo who has aspirations of a fine starting salary in the country that educated her.
Those who support the tax ’em high campaign say there is no evidence in 2016 that a brain drain naturally follows. They forget our experience in the 1990s, when those most-highly skilled left Canada or couldn’t be persuaded to come to Canada.
It is with great regret this error is being repeated again, and this time by a federal leader who claims to represent all. All, that is, except the self-starters, the self-employed, the highly trained professionals, the small business owners and those entrepreneurs holding multinational citizenships.
The most successful have choices. Why would we continue to make it more difficult for them to choose Canada?Report Typo/Error
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