Do the Rich Pay Their Fair Share?
Published in Le Droit
(Canada) on 30 August 2011
by Pierre Jury (link to original)
(Canada) on 30 August 2011
by Pierre Jury (link to original)
Translated from
by Rhianna White.
Edited by Jennifer Pietropaoli.
The debate is back: at a time when so many governments are writing their budgets into the red, do the rich contribute their share to the fiscal platter?
The question first arose in the U.S., where both sides monopolized a portion of the summer over the issue of the increase of the debt ceiling. If the debate was long and acrimonious, it’s because the American right refused to consider any new taxes and wanted to force President Barack Obama to reduce U.S. spending on social programs.
The president received support from an unexpected ally in Warren Buffet, the multi-billionaire who competes with his bridge partner, Bill Gates, for the title of the richest man in the country, if not the world. He was transparent in revealing his tax bill from 2010 — he owed nearly $7 million out of a taxable income of $40 million, a tax rate representing 17.4 percent of his income. He added that it's “less than the 20 other individuals in his office” who had to pay between 33 and 41 percent of their paychecks.
Buffet concluded that he received enough from the public generosity of his government and that he wasn’t at all against the idea of increasing his tax burden.
In his wake, 16 of the wealthiest individuals from France imitated his sentiments. They let Nicolas Sarkozy’s government know that they were ready to do their part, but they were more specific: They made it known that there would be “an exceptional contribution.” Read: They were ready to pay a year or two, to give an example, but not indefinitely. And the sum to be paid must be “reasonable.”
For several months, the French government has been studying different scenarios that would lead to an increased contribution of perhaps $10,000 by some 30,000 mega-rich individuals (who make over $700,000 in net income each year). Some people have called it peanuts; others have proclaimed it to be an important symbol.
Consequently, elsewhere, other countries want wealthier citizens to contribute more, notably in Italy and Greece. There are even some who are attempting to bring to the table a single tax rate (or flat tax), which would impose the same percentage to all taxpayers, rich and poor. Anti-poverty activists always attack with force. For them, a low-wage earner of $20,000 is proportionally more affected by a tax bill of $2,000 (assuming a rate of 10 percent) than a rich professional who declares a $200,000 income…and must pay $20,000 to the state.
In Canada, the debate is rather quiet. Each spring there is a call for the right to a single rate, which would simplify tax returns and would leave the majority of 45,000 employees in the Revenue Agency of Canada unemployed. The only one who occasionally addresses the issue publicly is Beauce Maxime Bernier from the libertarian fringe of the Conservative Party of Canada.
So, do the rich pay their fair share? To be clear, Canadians don’t seem to believe it. They are convinced that the middle class carries too large of a tax burden between the poor, who benefit from the generosity of social programs, and the rich, who profit from tax loopholes that take a part of their income out of the sight of the state.
The call from Warren Buffet is significant: Not only is it time for him and his rich friends to pay more, but he has debunked the approach of one of the key arguments used by conservative Canadians for lower taxes: that keeping taxes low promotes the reinvestment of saved sums that drive the economy and therefore benefits everyone (trickle down economics). “That’s crap,” said Buffett.
To raise the tax rate of the richest individuals won’t hurt, but the measure probably applies more to the U.S. than Canada. Where I come from, too many tax loopholes really seem to cause the problem. The government should worry more about that issue. It won’t solve the deficit problem, but it would give Canadians the impression that there is a little more justice in this vulgar world.
The question first arose in the U.S., where both sides monopolized a portion of the summer over the issue of the increase of the debt ceiling. If the debate was long and acrimonious, it’s because the American right refused to consider any new taxes and wanted to force President Barack Obama to reduce U.S. spending on social programs.
The president received support from an unexpected ally in Warren Buffet, the multi-billionaire who competes with his bridge partner, Bill Gates, for the title of the richest man in the country, if not the world. He was transparent in revealing his tax bill from 2010 — he owed nearly $7 million out of a taxable income of $40 million, a tax rate representing 17.4 percent of his income. He added that it's “less than the 20 other individuals in his office” who had to pay between 33 and 41 percent of their paychecks.
Buffet concluded that he received enough from the public generosity of his government and that he wasn’t at all against the idea of increasing his tax burden.
In his wake, 16 of the wealthiest individuals from France imitated his sentiments. They let Nicolas Sarkozy’s government know that they were ready to do their part, but they were more specific: They made it known that there would be “an exceptional contribution.” Read: They were ready to pay a year or two, to give an example, but not indefinitely. And the sum to be paid must be “reasonable.”
For several months, the French government has been studying different scenarios that would lead to an increased contribution of perhaps $10,000 by some 30,000 mega-rich individuals (who make over $700,000 in net income each year). Some people have called it peanuts; others have proclaimed it to be an important symbol.
Consequently, elsewhere, other countries want wealthier citizens to contribute more, notably in Italy and Greece. There are even some who are attempting to bring to the table a single tax rate (or flat tax), which would impose the same percentage to all taxpayers, rich and poor. Anti-poverty activists always attack with force. For them, a low-wage earner of $20,000 is proportionally more affected by a tax bill of $2,000 (assuming a rate of 10 percent) than a rich professional who declares a $200,000 income…and must pay $20,000 to the state.
In Canada, the debate is rather quiet. Each spring there is a call for the right to a single rate, which would simplify tax returns and would leave the majority of 45,000 employees in the Revenue Agency of Canada unemployed. The only one who occasionally addresses the issue publicly is Beauce Maxime Bernier from the libertarian fringe of the Conservative Party of Canada.
So, do the rich pay their fair share? To be clear, Canadians don’t seem to believe it. They are convinced that the middle class carries too large of a tax burden between the poor, who benefit from the generosity of social programs, and the rich, who profit from tax loopholes that take a part of their income out of the sight of the state.
The call from Warren Buffet is significant: Not only is it time for him and his rich friends to pay more, but he has debunked the approach of one of the key arguments used by conservative Canadians for lower taxes: that keeping taxes low promotes the reinvestment of saved sums that drive the economy and therefore benefits everyone (trickle down economics). “That’s crap,” said Buffett.
To raise the tax rate of the richest individuals won’t hurt, but the measure probably applies more to the U.S. than Canada. Where I come from, too many tax loopholes really seem to cause the problem. The government should worry more about that issue. It won’t solve the deficit problem, but it would give Canadians the impression that there is a little more justice in this vulgar world.