The National Post has used a recent paper from the Macdonald-Laurier Institute’s Philip Cross to explain why a greater emphasis on wealth distribution isn’t going to help lift Canadians out of poverty, given that Canada’s tax and transfer system is already highly progressive.
Cross’ paper, titled “Giving and Taking Away: How taxes and transfers address inequality in Canada”, explains that looking at tax rates doesn’t tell the whole story, a view strongly endorsed by the Post. Transfer programs, such as old age pension and employment insurance, are also heavily subsidizing the incomes of those in the lower- and middle-classes, funded largely by taxes on the wealthy.
“While their wages may not have increased at the same pace as those of upper income earners, the value of the transfers they receive from that group has grown substantially”, the Post writes in its editorial. “The result has been to reduce income inequality, not increase it.”
Instead, the Post concludes, policies aimed at increasing trade, productivity, investment and profit will do more to help low-income Canadians.
“More redistribution is not the answer”, the Post writes.
