Media statement released today
Toronto, April 18, 2012
Provincial parties urged to adopt proposal for modest tax increase as part of Ontario Budget
Joint statement by Doctors for Fair Taxation and Lawyers for Fair Taxation
With a crucial vote on the Ontario Budget just days away, groups supporting fair taxation to address income inequality are urging all provincial parties to agree to a proposal to increase taxes on the very wealthiest of citizens.
While the New Democratic Party proposal to increase the tax rate for Ontarians earning more than $500,000 per year (fewer than the top one percent of income earners) is exceptionally modest, it is an important acknowledgement that we cannot continue to sustain unaffordable tax breaks for the very wealthy and would mark an important shift in the discourse around taxes.
Ontario’s wealthiest citizens and corporations have enjoyed nearly two decades of substantial tax cuts that have contributed to growing income inequality. This is no longer morally justifiable or fiscally responsible. Consider:
- In the 1950s, 60s, and early 70s, the top marginal tax rate (including federal and provincial taxes) was 80%. During this period Canada enjoyed its longest period of sustained economic growth ever.
- Today, the highest Ontario personal income tax bracket is 46%. This rate has not been this low since the Great Depression.
- With this rate beginning at $132,000 in annual income, governments are in essence providing a flat tax for the super rich. Millionaire athletes and billionaire tycoons pay the same tax rate on their high incomes as doctors and engineers.
- Between 1980 and 2009 and controlled for inflation, the top 20% of earners increased their employment incomes by 38.4% but the middle fifth lost 0.3% of their market incomes and the bottom fifth lost 11.4%.
- Ontario Social Assistance rates would need to be raised by 25% to 60% to buy the same goods and services they bought in 1995
- Canadian disparities in health, which are directly caused by socio-economic disparities, are responsible for 20% of health care costs.
- Due to tax cuts by federal and provincial governments, public revenues dropped by 5.8% of GDP from 2000 to 2010. This is the equivalent of approximately $100 Billion in foregone revenue.
We need to address income inequality and one way is to roll back some of the tax cuts made to the wealthiest Ontarians. All parties should seize the opportunity presented by the Ontario Budget and a minority Legislature to implement higher increases on the province’s highest earners.
In order to further this reasonable discourse on taxation, we also recommend the Standing Committee on Finance and Economic Affairs investigate other options for fair revenue generation – including increasing corporate tax rates – and bring forward proposals in time for the 2013 Ontario budget.
Hundreds of members of the medical and legal profession as well as many other Ontarians have signed petitions supporting the call for fair taxation. We see the infinite potential of our province and country and understand fair taxes are part of our contribution to realizing this potential.
Our message to all provincial parties is clear: Tax us! Ontario is worth it.
We are distinct groups of doctors and lawyers who believe unfair taxation has contributed to growing income inequality in Canada. We are working in collaboration and with other Canadians to shift the public discourse on taxes, encourage governments to adopt reasonable tax increases on their wealthiest citizens and to seriously study new revenue tools to help address income inequality. For more information please visit:
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