Wealth Sees Exponential Growth

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    The country’s 86 richest individuals and families – 0.002 per cent of the total population – are getting exponentially richer and now have accumulated as much wealth as the country’s poorest 11.4 million, says a report by the Canadian Centre for Policy Alternatives. That’s more than in 1999, when the richest 86 had as much money as the poorest 10.1 million. The point, says David Macdonald, economist and author, is to show that if income inequality is a policy and social justice concern, then wealth inequality is worse. In fact, the super-rich list of Canadian residents has little to do with income in the traditional sense, he says. None of the 86 are company CEOs. Instead, the ones on the list are there by virtue of being company founders or related to company founders. They have gotten there by creating and trading assets, whether companies, real estate, or securities. “We often focus on income inequality but that’s a socialist paradise compared to wealth inequality,” says Macdonald. Between 1999 and 2013, the wealthiest 86 Canadians had grown their wealth from $118 billion to $178 billion on real non-inflationary terms. The growth, says Macdonald, is becoming increasingly concentrated because it is taxed differently from income. If one Canadian makes $100,000 a year selling a company (or shares) while another makes $100,000 a year working at a job, the worker will pay twice the tax of the business seller, he says, adding that a combination of a higher inclusion rate (for capital gains) and higher income taxes at the top of the income scale could go part way to offset the flood of wealth that is accumulating in the pockets of Canada’s wealthiest and ensure some benefits are returned to the majority of Canadians.