Long before COVID-19, the gap between the rich and the poor was already a fault line in Canadian society. Since the pandemic started, it’s become a chasm.
How do we move forward?
Tax the wealthy. It’s not something you expect to hear from a pair of doctors with high incomes, but we understand that healing economic inequity can promote better health for everyone. It’s a policy prescription that most Canadians support, but as recently as November’s fiscal update, it’s one the government keeps failing to fill.
During the pandemic’s first six months, Canada’s 20 wealthiest people added another $37 billion to their fortunes: enough to put $1,000 into the pockets of every person in Canada. Meanwhile, people around us are living paycheque to paycheque like never before. Nearly half of Canadian households are $200 or less away from not being able to pay their bills at the end of the month.
Check your bank balance. If you’re lucky enough to have one, check your investment portfolio, too. What you find there reveals a lot about your health. From statistics over the past 30 years, we know that the more money you have, the more likely you are to live longer. This is backed up by the Canadian Medical Association and years of research showing that many health outcomes, from infant mortality and heart failure to life expectancy, are linked to the degree of economic inequality within a country. If you’re from a racialized or Indigenous community, this inequality is more likely to affect your health.
Even if you’re wealthy, though, you’ll find that people live longer and healthier lives in countries with smaller gaps between the rich and the poor. Beyond health, inequality also harms investment, both in people and in the economy.
Countries with less economic inequality arrived there in different ways. In Japan, it is the result of more balanced pre-tax incomes. Sweden, on the other hand, sets higher taxes to invest in high quality social programs that level the playing field. In Canada, we do neither particularly well.
Our policies have been promoting an unequal society for a long time. The past 30 years have seen a drop in tax contribution from the wealthiest as our top income tax bracket slid from 43 per cent to 33 per cent and corporate taxes plummeted from 36 per cent to 15 per cent. Meanwhile, our public social spending lags much of Europe, Japan and even the United States.
What can we do to build a healthier society?
Families who have been fortunate enough to accumulate great wealth can contribute to the social infrastructure that helped them get there. Teams from both the Broadbent Institute and Canadians for Tax Fairness have proposed, among a host of other reforms, a widely supported tax on extreme wealth. Recently, the federal NDP picked up on these ideas, proposing a one per cent tax on net wealth of more than $20 million. While this has the potential to raise more than $5 billion for public investment, one per cent is still a far cry from the wealth taxes of up to eight per cent proposed by previous contenders for the U.S. presidency.
There’s a strong case for linkages between inequality and health outcomes through phenomena such as toxic stress in children. A tax will not only improve health by addressing economic inequality at its roots, but will also provide badly needed financing for social infrastructure we can all benefit from. For example, Canada is the only high-income country with a universal healthcare system that does not have a universal drug plan. The economic shock of the pandemic is disproportionally affecting women, shining a spotlight on our lack of a national childcare program. And the Canada Emergency Response Benefit has demonstrated the power of what robust social assistance can do.
While the NDP proposal for a one per cent wealth tax was blocked by Liberal and Conservative MPs, Canadians still want bold action.
Support for a one per cent wealth tax is wide and deep, with 79 per cent of Canadians in favour. Among Conservatives, those in favour outnumbered those opposed by almost two to one. Support was even more overwhelming from Liberal voters.
A more inclusive economy is wishful thinking while the wealthiest in Canada disproportionately benefit from the pandemic. The government has a historic opportunity to tilt the playing field towards fairness for the many in Canada who, now more than ever, are struggling to make ends meet and stay healthy. A one per cent wealth tax would lay the foundation for a thriving, healthy recovery.
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Everything in this article is wrong. A small fraction of our greatest producers already pay most of the income taxes in this country. Their work keeps our lives running and improving. In poor countries there is no wealth gap – everyone is poor. As a society advances the best ideas are rewarded, wealth is created that benefits everyone and so the great creators build more wealth than simple labourers. It is government power to damage and destroy our productive abilities that is the biggest problem we face. Let us live and produce and trade freely and watch us grow better lives.
I suppose we could also ask physicians in Canada who are making in excess of $200,000 a year to give back some of their income to the health care system. Would that make sense?
Flattening inequities has great potential, but we don’t need more TREATMENT by your profession or from bigpharma: we need multimodal supports to help ppl flatten their bellies, like England is doing for type 2 diabetes. Otherwise you’ll just expand your sector’s role to beyond the 12% it’s already contributing to our GDP. Can you look past your implicit biases to understand my messages in the video linked via tinyurl.com/global-economy-feedstock?
I love this proposal.
I feel very fortunate to be able to practice medicine in the Canadian medical system. A physician colleague from Uganda recently had the opportunity to work at a hospital in Ontario – and, although he was impressed with the access to organ transplants, emergency MRIs, or cath-labs for thrombolysis – he was most impressed with how health care teams strived to provide the best medical care to all people in hospital regardless of their personal incomes.
However, practicing medicine for over 20 years in Canada, and the COVID-19 pandemic, has also impressed on me the impact of underlying socioeconomic inequities on health.
I am not an economist, but based on the growing divide between rich and poor, the promise of trickle down economics didn’t seem to deliver. Given the harms of inequity in the world, I am seriously questioning if our society really does benefit from continuing to support billionaires – billionaires who seem to disproportionately benefit from taxpayer-funded infrastructures – and then use their wealth to lobby for even more benefits, while sometime even decrying financial aid for others.
Could some of these inequities be seen as a race between 2 people – at the beginning one person gets an unfair head start, and then, based on the “rules”, for every race that person wins, they are given an additional head start for the next race – widening the gap.
Donations and charities are great, but I don’t think any charity or billionaire philanthropist has done more good than good governments and good government policies.
Frankly, I am surprised there are not more people questioning the extreme wealth a few individuals amassed during the pandemic as millions of front-line workers had to take additional risks of getting COVID and millions lost their jobs.
I think the authors make a strong case. Based on the evidence they presented, fair taxes, including a wealth tax that takes into account some of the existing inequities, seem to be steps in the right direction.
The sustainable proposal isn’t to shove more money into the treatment paradigm of our public health system, any more than building more highways will solve gridlock. We need wealth for wellness vs health. See some further thoughts in youtube via tinyurl.com/global-economy-feedstock
So tired of silly stories like this. I don’t take medical advice from my financial advisor; why would I take financial advice from some doctors?
Sure…let’s put more money into the pockets of poor Canadians…so they can squander it before the new year is here.
The government’s role is to provide opportunities. ..not handouts. Nor is it supposed to play the role of Robin Hood!
I am far from rich, but I absolutely opposed to ‘tax the rich’ sentement. Notice the bracket for taxing wealth is far above a typical doctors income. If I were to become rich I would simply move my wealth around to avoid bogus tax increases. Increased taxation leads to bloated budgetsa ndnincreased public employment, which is a net drain on resources. Supporting wealth creation on the other hand is a net gain of resources.
You cannot tax your way to prosperity. Goverments need to create environments that foster wealth creation, then get out of the way.
I DO believe we could get more from the better off voluntarily IF, and this is a big IF…they could see actual bonofide results with the money they surrender. Taxes go into the black whole known as General Revenues…with no real accounting on the value we as citizens recieved from contributing.
As far as CREB goes, you DO realize that jt spent over a TRILLION dollars we DONT have!!!!!
Hey Dr’s…stay in your own lane…..
You forgot we have federal and provincial income tax. Too marginal tax rates on high income earners exceed 50% in many provinces. Failure to include this is misleading.
Wealthy people use their money to grow their business, create jobs, and donate to research and education. Research shows that countries with the highest GDP and most wealth amongst the populace actually voluntarily donate the most money. The reason why quality of life in USA or Canada looks so different to life in say Somalia is thanks to capitalism, innovation and friendly entrepreneurial competiton. Want people to have better quality of life and reach their full potential? You should promote lowering taxes, especially for businesses, so people can build and grow innovative business. Why do for instance Ontario engineering school grads go south of the border so often? Where are they supposed to work in Ontario? Why are we not inventing the new googles and amazons and microsoft? Why is the main option for Canadian grads to go work in the USA at world leading companies?
I realize when you go to school in Canada for 12 years of post secondary education to become a doctor it is hard to overcome the socialist brainwashing, but capitalism and money are not “bad”.
I guarantee both authors would love a chance to work at Mayo Clinic or Johns Hopkins or Mass General where private wealth has donated to massive world class innovation the likes of which we can only dream of at Canadian hospitals – I sure would love to work where I don’t have to beg the government for a few hundred dollars for basic hospital equipment.
It is such a catchy headline to “tax the rich” with no thought or responsibility of what that means and I fundamentally agree with Dr Who’s comment.
Tax the rich comes with a more bloated government and public services sector running projects and businesses that they are not qualified to run.
As a non rich member of society, I choose to volunteer my time and a percent of my estate annually…but I choose to do this as do rich people. Taxes, and wasted programs, are forcing me to constantly re-evaluate my philanthropic position as I watch so much wasted in expansion of government, duplication of spending and quite frankly, top heavy beurocracies running too many fragmented sectors. Healthcare is a prime example.
Let the rich CHOOSE to donate and let the non-rich CHOOSE to donate and volunteer. We can be of more value.
“You should promote lowering taxes, especially for businesses”
Its a matter of proportion. Do Larger CEO bonuses really provide a greater advantage compared than fueling small startups that impact a community’s health and wellbeing. Keeping local revenues for supporting local businesses and genuine cohesive interactive, local community (grassroots) supports as opposed to a “top down” disenfranchising action from some bunch of large corps. Patting themselves on the back for one-off brass plaqued name on some inaccessible building (to the general populous) is not the way to support the human biological units who make up the majority of our towns and cities and “expect” things to get “better”, more “productive” or generate a general sense of “wellbeing”.