To the editor;
Your editorial of Feb. 13, provided by Mark Milke, a fellow of the Fraser Institute, was a partial discussion of the role the proverbial 1% in the economy. It ended with a critique of those critical of the 1%, who the author accuses of promoting class warfare, and by implication of fomenting the resentments and social unrest that class warfare brings about. Warren Buffett, one of the richest men in the world said this of class warfare: “There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning.” (www.nytimes.com/2006/11/26/business/yourmoney/26every/html) And I would add, aided and abetted by organizations, like the Fraser Institute, which are funded by the rich for the specific purpose of convincing you that what benefits them also benefits you. And that is not necessarily so.
Milke states that critics of the 1% should be reminded of two facts. The first is that tax proceeds from the top 6.6% produces 47% of all federal and provincial income tax revenues. As Ben Stein simply put it in a New York Times article, though the rich pay a lot of taxes as a total percentage of tax collected, they do not pay a lot of taxes as a percentage of what they can afford to pay (see above article). The second fact that Milke reminds critics of, is that successful entrepreneurs create opportunities for others. He gives one example. But most corporate chief executives are not entrepreneurs. They are executive employees hired to administer the company by boards of directors made up largely of chief executives of other companies. The relationship between boards of directors and senior executives is truly incestuous nepotism.
Milke points out disingenuously how low the threshold is to reach the 1% level (less than $250,000 annually), when he knows that the real issues is in the stratosphere. Many who have studies the issue of growing inequality in society know that the problem is even a finer slice than this. Fifty to 60 years ago, a CEO of a large corporation was paid from 25 to 40 times the average domestic wage, when marginal income tax rates on the highest incomes, at times, exceeded 90%. Today, the CEO of Air Canada makes $40 million a year, approaching 1000 times the average wage.
A CEO of an American health care company recently received $109 million,exceeding 2000 times the U.S. average. There have been recent years when the CEO of Disney received in excess of $300 million, exceeding 6000 times the average. All at a time when tax rates on the highest incomes, at around 40%, are among the lowest they have been in 80 years, and, if the CEOs have their incomes in forms other than salary, can reduce the tax rates effectively by as much as half.
In a July edition of McLean’s magazine, an article making various U.S.-Canadian comparisons pointed out that from 1966 to 2011, ‘the average inflation-adjusted income of the bottom 90% of Americans grew by ... $59.’ And from what I know of distributions, those at the bottom of that 90% would have had incomes decline. But the income of the top 10% increased by $116,071. Do the math! That means 99.5% of all growth in the U.S. economy in the last 45 years has gone to the top 10%. (McLeans, Jul. 8, 2013, page 25.) And from what I know of distributions, by far the greatest share went to the 1%, the 0.1%, and the 0.01%. Canada is not that far behind in that process. And the Fraser Institute wants more of the same. It is the agent of those who most prosper from a system based on the exploitation, impoverishment and oppression of those who work, by those who own capital, few of whom are able to escape very far, or for very long.
Yours sincerely,
Glenn M. Andrews
Barriere, B.C.