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While many workers were laid off and had to rely on income support of $500/week during the pandemic, the stock market boom means half of CEOs will likely see an increase in their compensation for 2020.
Ottawa (15 Jan. 2021) — According to a recent report from the Canadian Centre for Policy Alternatives (CCPA), by January 4th at 11:17 am, the pay for a typical CEO at a top-100 company was as much as what the average Canadian worker will earn in all of 2021. The report, The Golden Cushion, CEO compensation in Canada, shows just how big a problem income inequality is in Canada.
According to the report, in 2019 the average CEO at a top-100 company made 202 times as much as the average Canadian workers. And while many workers were laid off and had to rely on income support of $500/week during the pandemic, the stock market boom means half of CEOs will likely see an increase in their compensation for 2020.
Tax cuts and loopholes add to income inequality
The tax system is supposed to reduce the gap between the very wealthy and the rest of us by taxing people based on their ability to pay. Unfortunately, tax cuts and loopholes that disproportionately benefited the wealthy allowed many of those making ridiculously high salaries to avoid paying their share. So does the failure of successive federal governments to take meaningful action to crack down on tax havens.
Taxes, particularly income taxes, still reduce income inequality, but not to the extent that they once did — and could again.
Myth used to justify letting the wealthy avoid paying their share
The justification used when cutting taxes for the wealthy is that it will encourage economic growth that will benefit everyone. This is a myth.
As a NUPGE report, The Myths About Tax Cuts, explains, all cutting taxes for the wealthy and large corporations has done is increase income inequality. Tax cuts for the wealthy are not an effective way to build a strong economy.
A recent report from the International Inequalities Institute at the London School of Economics confirms this. According to the authors, “Major tax cuts for the rich since the 1980s have increased income inequality, with all the problems that brings, without any offsetting gains in economic performance.”