Wage Gap - done by noon on day 1

[Karlin]

by noon on the first day back to work in the new year, Canada's CEOs have brought in as much as I take in over the whole year.

At 7 Million doallars a year, their incomes might seem gross. When we look at it compared to 'regular people' - the average income people - it really is gross.

We have heard about the growing income/wealth gap that is occuring all around the globe, where just a very few people have most of the money {5% have 90% approx.]

This might seem like an imbalance, or it might appear that some human lives are worth so much less than others, but in reality it is just capitalism. Concentrated Wealth is not a stated goal of capitalism,, but it is a certainty in a system of investors and labour classes.

There was a time when the governments would actually take steps to keep the grossly overblown concentration of wealth from occuring. Then, governments were basically taken over by the people who would get that wealth.

 

[Colpy]

Actually, according to the Globe and Mail, some CEOs already had earned the yearly salary of a mimimum wage worker by 9:46 AM.

Obviously, this is obscene.

In 1960, according to an article I read, but am unable to credit (it was a while ago) the average CEO of a company made 15 times the wage of the lowest paid worker of that company.............so, the mail boy makes $16,000, the CEO makes $240,000.

Now that figure is 130 times.......the mail boy makes $16,000, the CEO makes $2 MILLION.

Something is wrong.

 

[L Gilbert]

Uhuh. Did you guys think about the other end of it? Their net income? Didja know that the richest 10% (Might even be a smaller percentage than that) pay more than 50% of the income tax collected in Canada? I have no problem with people earning whatever they can. My problem is gov't. That has to be the biggest waste of money ever invented alng with churches n the like.

 

[Kreskin]

I remember back in the 70's I was taking a sociology class and at that time Volvo announced the conversion to a robotics plant. Back then we talked about the future of skilled factory work, or lack thereof. That Volvo plant was the tip of the iceberg. Just where were the average joes going to work? How much were they going to pay people to push buttons or watch machines do their old jobs? It was evident even then that as much as tech/robotics were being pushed to "make our lives easier" it was obvious who would benefit financially.

I would love to reread the old "Future Shock" book. I can't remember most of it (hey it was 70's/80's) but it probably predicted a wage gap.

 

[L Gilbert]

Well, as I said, I have no problem with whatever people can make for themselves. What does bother me (besides big gov't) is that banks and oil companies make fantastic profit (billions) and very few people seem to realize any benefit. They could drop a couple billion, still keep investors happy, and fix a whole lot of homeless and hunger problems (or something). They've become like gov'ts, more interested in their own comfort than in people's survival and yet it's people that are behind them. I'd say there's a few people lost their grip on reality. Sooner or later, it'll backfire.

 

[TomG]

Uhuh. Did you guys think about the other end of it? Their net income? Didja know that the richest 10% (Might even be a smaller percentage than that) pay more than 50% of the income tax collected in Canada? I have no problem with people earning whatever they can. My problem is gov't. That has to be the biggest waste of money ever invented alng with churches n the like.

I wonder if there's a source for the stat. I've also heard stats that corporations contribute a high percent of total tax revenues, and I've heard that both stats don't hold water. On the other hand, I've heard that single individuals in Canada who are at the bottom of the taxable income levels have the highest marginal tax rates of any income group. Marginal tax rates include GST, PST, property, excise etc. taxes--all of which are regressive. I also hear that cities (where high income people live) receive $1.25 in tax transfers from senior governments for every dollar in tax revenues they contribute to senior governments. I have a problem with that but I don't have sources off-hand.

I don't have a problem with people receiving the product of their labour--even if that means some very big income earners and high wealth concentration. I don't have a problem with that as long as wealth concentration takes place under conditions of the ideal economic competitive model--which of course we don't have and maybe never had. In absence of the discipline of the theoretical competitive model, the high incomes contain substantial components of theft. Those who have power use that power to steal from the system (steal mean receiving more then the value of their product). Nobody believes CEO products are huge.

Stealing from the system also means conducting an assault on the earth and environment without paying all costs of externalities. Externalities are the total costs of producing and consuming a product. Highways, landfills, ruined land, toxic waste and air pollution are some externalities that are not paid, or are paid from general tax revenue. We subsidize corporate profits and CEO incomes every time we pay our taxes. We subsidize them big time. We also subsidize the ever increasing consumption of short-lived shoddy products, and what do we get in return except more wealth concentration and a doubtfully viable future? Oh well, got to maintain that aggregate demand. I have a problem with that. There is a connection between huge corporate profits and huge CEO incomes just like there is a connection between government policy and lack of restraint in undisciplined free market capitalism. My sources would be books by Joseph Stiglitz and Jared Diamond.

 

[BitWhys]

oops

double post

 

[BitWhys]

...On the other hand, I've heard that single individuals in Canada who are at the bottom of the taxable income levels have the highest marginal tax rates of any income group. Marginal tax rates include GST, PST, property, excise etc. taxes--all of which are regressive...

good post, although I wouldn't make a too big of an issue out the government transfers. in short, its either that or a rousing game of "beggar thy neighbour". these days, anyways.

Canada’s high-income earners are not overtaxed—report

OTTAWA—Despite recent reports to the contrary, Canada’s high-income earners do not pay a disproportionately large share of personal income tax.

A new analysis by Prof. Neil Brooks of Osgoode Hall Law School, released today by the Canadian Centre for Policy Alternatives, takes a closer look at the numbers in Statistics Canada’s “Tax Incidence in Canada.” The Stats Can report sparked a series of news stories this spring claiming the top 10% of income earners pay 52% of the total tax bill but Brooks finds these figures both misleading and incomplete in assessing the fairness of the tax system.


The Statistics Canada study showed that the share of federal income taxes paid by the top 10% increased from 46% in 1990 to 52.6% in 2002. Brooks points out, however, that this increase is not a result of the tax system becoming more progressive. Instead, the main reason for the increase was because the share of earned income going to the most affluent among us increased by 12.6% over that same period, while the share going to the bottom 50% of tax-filers declined.


“In fact, the increasing inequality in the distribution of income in Canada is the real story of the Statistics Canada analysis,” Brooks says. “Canada is becoming a much more unequal society.”


Furthermore, Statistics Canada included all tax-filers in their study, half of whom reported incomes of less than $23,000 in 2002. This inclusion lowered the threshold for being in the top 10% -- all those earning more than $64,500 were considered to be in this highest category -- and increased their apparent share of taxes paid.


Brooks points a finger at the business press for embracing the selective use of statistics to create false impressions about who pays the greatest share of taxes. When all taxes are considered, he notes, the Canadian tax system is roughly proportional.


“All Canadian residents -- whether they earned $10,000, $100,000 or $1,000,000 -- pay somewhere between 30% and 35% of their income in taxes of all kinds,” says Brooks. “Contrary to the claims of business groups, we already have a flat tax system. The mild progressivity of the income tax system simply offsets the regressivity of other taxes like the GST, retail sales taxes and property taxes, which take their biggest bite, proportionally, from lower-income Canadians.


“By itself, the percentage share of the income tax paid by the rich is almost meaningless in assessing the fairness of the tax system,” he concludes.

Any guesses which side of the equation Stephen "all taxes are bad" Harper supports? :wink:

 

[DurkaDurka]

We subsidize corporate profits and CEO incomes every time we pay our taxes. We subsidize them big time. We also subsidize the ever increasing consumption of short-lived shoddy products

If you are going to harp about Subsidies, why not tear the government a new one for subsidizing expansion of auto assembly lines? The subsidies which benefit a couple thousand "working people".

 

[I think not]

I never understood what the issue is. I must be brain dead. A small percentage are richer than most.

And?

What should be done? Take away their wealth and bring them down to where everybody else is?

And what with that accomplish?

 

[L Gilbert]

I wonder if there's a source for the stat.

Right from StatsCan: http://www42.statcan.ca/smr04/2005/05/smr04_12305_04_e.htm

I don't have a problem with people receiving the product of their labour--even if that means some very big income earners and high wealth concentration. I don't have a problem with that as long as wealth concentration takes place under conditions of the ideal economic competitive model--which of course we don't have and maybe never had. In absence of the discipline of the theoretical competitive model, the high incomes contain substantial components of theft. Those who have power use that power to steal from the system (steal mean receiving more then the value of their product). Nobody believes CEO products are huge.

[

Stealing from the system also means conducting an assault on the earth and environment without paying all costs of externalities. Externalities are the total costs of producing and consuming a product. Highways, landfills, ruined land, toxic waste and air pollution are some externalities that are not paid, or are paid from general tax revenue. We subsidize corporate profits and CEO incomes every time we pay our taxes. We subsidize them big time. We also subsidize the ever increasing consumption of short-lived shoddy products, and what do we get in return except more wealth concentration and a doubtfully viable future? Oh well, got to maintain that aggregate demand. I have a problem with that. There is a connection between huge corporate profits and huge CEO incomes just like there is a connection between government policy and lack of restraint in undisciplined free market capitalism. My sources would be books by Joseph Stiglitz and Jared Diamond.

So what's the solution? Communism?

 

[L Gilbert]

good post, although I wouldn't make a too big of an issue out the government transfers. in short, its either that or a rousing game of "beggar thy neighbour". these days, anyways.

Canada’s high-income earners are not overtaxed—report


Any guesses which side of the equation Stephen "all taxes are bad" Harper supports? :wink:

Interesting: stats say whatever you want them to. Still, I cannot see a pragmatic feasible solution.
IOW, JK Galbraith once said, "In capitalism, man exploits man. In communism it's the opposite." So, logically, the solution must be somewhere in between, but who will find the point in between?

 

[Karlin]

Uhuh. Did you guys think about the other end of it? Their net income? Didja know that the richest 10% (Might even be a smaller percentage than that) pay more than 50% of the income tax collected in Canada? I have no problem with people earning whatever they can. My problem is gov't. That has to be the biggest waste of money ever invented alng with churches n the like.

Taxes are good, and I cannot raise a single tear for the loss of HALF their incomes, which means they might have to actually work a full day to earn what the average earner gets in a whole year.

The 50% rate does not apply to ALL their incomes either - maybe half.

 

[Karlin]

I never understood what the issue is. I must be brain dead. A small percentage are richer than most.

And?

What should be done? Take away their wealth and bring them down to where everybody else is?

And what with that accomplish?

That small percentage is taking away the oil wealth of Alberta.
That small percentage are the ones who have "80% of the wealth in just 5% of people's hands"

Yes Virginia, it does add up to a significant portion of our nation's wealth, and furthermore, the economy is set up to HELP the Elite Wealthy people aquire and keep more and more of it. For the opposite, see Venezuela and how they have reduced their poverty rate so drastically in such a short time BY JUST TAKING AWAY THE HUGE INCOMES OF "A SMALL PERCENTAGE".

We could accomplish a lot by 'taking it away'. One other issue is the simple fact of haves-and-have-nots, and the social problems that causes. Also, in general, wealthy people create poor people by compatitive incomes[prices rise when some have money - see alberta today] ;
hence the old saying 'the poor have allways been a great soure of wealth". Hey my friend 'thing-not', wrap your 'dead brain' around that one, just for the exersize you will get!!

 

[BitWhys]

Interesting: stats say whatever you want them to. Still, I cannot see a pragmatic feasible solution.
IOW, JK Galbraith once said, "In capitalism, man exploits man. In communism it's the opposite." So, logically, the solution must be somewhere in between, but who will find the point in between?

Funny you should quote Galbraith like that since he was very much IN FAVOUR of progressive income tax regimes.

 

[L Gilbert]

Taxes are good, and I cannot raise a single tear for the loss of HALF their incomes, which means they might have to actually work a full day to earn what the average earner gets in a whole year.

The 50% rate does not apply to ALL their incomes either - maybe half.

I see nothing wrong with taxes either. I just think that what is done with them stinks badly.
Um, If I earn my (somewhere around) $50K and some doughhead figures he's going to take a chunk of it and give it to some other dood who prefers sitting in a bar till his welfare check is gone then at home in front of the idiot box the rest of the month, he'll likely get a owie on his beak. I have my preferred examples of charity I like to do things for and I think that's the best way for me. If someone else prefers to let others decide what acts of charity are done with his money, then that's fine too.

 

[L Gilbert]

Funny you should quote Galbraith like that since he was very much IN FAVOUR of progressive income tax regimes.

Why? Do I have to like someone or even agree with them in order to quote them?
I see nothing wrong with income tax, anyway. What do you mean?

So, again, do you have a solution to the issue?

 

[L Gilbert]

Um, the reason I prefer to choose which charities I give time or money to is like this. If I give a buck for some needy kid in Nigeria, I don't want some paper shuffler pocketing 90¢ of it: I want the majority to actually get to the kid.

 

[BitWhys]

Why? Do I have to like someone or even agree with them in order to quote them?
I see nothing wrong with income tax, anyway. What do you mean?

So, again, do you have a solution to the issue?

again?

I already answered it once.

 

[TomG]

G'Day Gilbert: Thanks for the source. I wasn't aware that the top income decile extended from multi-million incomes to 65K (0.065 of one million)--it sort of makes group comparisons hard to interpret. I wonder if the conclusions would be the same among the 99th percentile and low income groups, and if forms of wealth other than income were included. I wonder if the marginal tax rates would still be comparable.

It's probably not fair to require a solution of me since I don't consider my product to be valued at an average 7-million. However, if I received that much, I'd expect that a solution would be demanded of me or people with big sticks would come looking for me. So, what is the solution? I doubt that the choices are between unrestrained free-market capitalism and communism. I don't imagine many people believe that either work.

I do think that a solution requires a social environment where all institutions are sellable to most everybody as 'fair.' Societies that don't sell 'fairness' to most everybody seem to fail prematurely and with horrific consequences. As possible alternatives, the Scandinavian social democracies/monarchies seem to be doing OK economically and seem fairer than our arrangements. They don’t spend much effort protecting themselves against terrorists either.

I dislike CEO's as a group for the same reasons you seem to dislike welfare recipients. Both groups are rewarded beyond their contributions and rewarded at the expense of others. Neither is fair and both distort resource allocation. Even John Crispo wouldn't try to sell executive compensation as economically justified let alone fair more than 15 years ago.

I prefer welfare recipients to CEO’s myself. For the most part welfare recipients lack choices while CEO's make explicit choices to be where they are and do what they do. Most welfare recipients are single parents, ex-psychiatric patients or physically disabled. It seems fair to support the incapable and incapacitated rather than rely on starvation or some such thing as instruments of social policy. CEO's however, could flip burgers if they find their roles unpleasant.