He says because over 80 per cent of CEO pay comes from bonuses, theoretically if a company does really well, then CEOs do really well, and if a company does badly, CEO bonus pay will reflect that.
But the report reveals this is not the case, with many high-paid CEOs maintaining huge earnings and simultaneously receiving government subsidies.
Macdonald’s report makes five recommendations, including introducing a wealth tax and implementing higher top marginal tax brackets. It also calls to eliminate the capital gains inclusion rate loophole and the stock option deduction for large companies.
Blaikie says we need to act quickly to curb widening inequality.
“It’s a trend that seems to be accelerating because the more wealth that this small number of people at the top have, the more power that comes with that and the greater their ability to try to reinforce systems that direct wealth to themselves instead of fairly to everyone,” he said.
“That’s why we continue to push and continue to talk about all the various ways the government could not only be raising some more revenue for itself and for the programs that we all depend on, but also to have a fairer distribution of wealth.”
If a wealth tax were introduced, Blaikie says those being taxed would still be extremely wealthy compared to most Canadians and “it’s not like anyone’s asking them to go live on the street themselves or something like that, we’re just asking that they recognize all of the public investment they benefit from as part of how they make their money.”
Finance Minister Chrystia Freeland has now been tasked with establishing a minimum 15 per cent tax rule for top-bracket earners, which would include an attempt to prevent the wealthiest Canadians from reducing their tax burden through various tax planning loopholes.
She was also told to invest in the Canada Revenue Agency to combat tax avoidance, and raise corporate income tax for banks and insurance companies that make more than $1 billion.
The Liberals raised the tax rate from 29 per cent to 33 per cent for people earning more than $200,000 in their first year in office. Because of inflation, the top tax bracket now starts at $216,511.
The real value of reports like this are the questions they raise, said DT Cochrane, a policy researcher with Canadians for Tax Fairness (C4TF), a non-profit and non-partisan organization that advocates for fair and progressive tax policies.
“Why are these almost overwhelmingly white men making these obscene salaries? … Does anyone really deserve $11 million a year? Did they really do anything to earn an extra $95,000 a year?” Cochrane asked.
“You don’t have to think about it for very long for the answer to be an obvious ‘no.’”
– With files from The Canadian Press
Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer
This content was originally published here.