In her file Inequalities revisited in Quebec – putting the Gini back in the bottleResearchers Camille Lajoie and François Delorme from the Research Chair in Taxation and Public Finance at the University of Sherbrooke show that income inequality has worsened over the decades.
From 1982 to 2019, the select group of the 10% richest taxpayers in Quebec saw “their” share of total annual income increase by 6.1% to 38.4% of all income earned in Quebec.
You read that right: the handful of our “rich” 10% have monopolized almost 40% of all income!
Furthermore, the extremely select group of 1% of “very, very” rich Quebecers are also vastly enriched by monopolizing 11.9% of total income, increasing their share of the pie by 4.9 percentage points since 1982.
While the rich got richer, the remaining 90% of taxpayers’ share of total annual income shrank to 61.6% of all income.
Other key data on rich people’s enrichment: The average annual income (in 2022 dollars) of the 10% “rich” group increased by about 48.8%, from $119,963 (in 1982) to $178. dollars and 476 US dollars (in 2019).
The increase was significantly greater among the top 1% of richest people. Their average income skyrocketed by 113.9%, reaching $554,068.
During the same period from 1982 to 2019, the average annual income (in 2022 dollars) of the remaining 90% of taxpayers increased only 14.3% and amounted to about $31,811.
THE SOLUTION
What can be done to reduce these income inequalities?
The question is all the more relevant since 87% of respondents to a Léger poll conducted in 2021 by the Observatoire québécois des inequalities believe that reducing income inequalities should be a priority for Quebec society.
Should we place a greater burden on the few rich and very rich taxpayers by making the income tax even more progressive?
Not sure! According to researchers Lajoie and Delorme, Milligan’s (2019, 2021) work suggests that there is an upper bound on the marginal tax rate. “In fact, beyond this limit, the revenue loss resulting from changes in the behavior of high-income taxpayers exceeds the revenue gain from the higher tax rate.”
What is the solution?
“Options to reduce inequalities must include improving income support measures at the lower end of the income distribution scale, rather than increasing taxation on high incomes,” the authors conclude. from the file Inequalities in Quebec revisited.
They add that greater support for the poorest in Quebec society, rather than trying to increase the tax burden on the richest, would even make it possible to partially close the wealth gap with Ontario.
Let François Legault and his Finance Minister Eric Girard take it for granted!
