July 2026 Is it fair?

 

The July 2026 Fraser Institute report reveals that the top twenty per cent of income-earning families in Canada, pay nearly two-thirds of the country's personal income taxes, and more than half of total taxes. 

Alternatively, the myth-loving lefties, especially the NDP, feed their followers a diet of envy and resentment.  They lie when they say "make the rich pay," as they promote the fantasy that higher-income earners do not pay their fair share.

There is a common myth that top income earners do not pay their share of taxes and that increasing taxes on this income group is effective in generating additional government revenue.

However, high-income families already pay a disproportionately larger share of all taxes-nearly two-thirds (65.3 percent) of personal income taxes and over half (58.3 percent) of total taxes-demonstrating they contribute their fair share and supporting the case for limited government.

In contrast, the bottom 20 percent of income-earning households pay only 0.7 percent of all federal and provincial personal income taxes and 1.7 percent of total taxes in Canada.  This is due to the tax system's rate structure, where the share of taxes owed increases as income rises.

Raising taxes on high-income earners ignores the economic consequences of rate increases and the predictable behavioural responses to high tax rates or new taxes.  In response to a tax increase, many will change their behaviour to reduce their taxable income through tax planning or evasion, delaying investment, or going elsewhere, resulting in governments raising less revenue than anticipated.  High taxes turn incentives on their head.

A high tax economy reduces Canada’s competitiveness with other industrialized countries, especially our largest trading partner, the United States.  Increasing taxes on high-income earners makes Canada a less attractive place to live, to work, and to invest, while causing lower-income people to struggle in a harsher economic context.  Society becomes more divided between the haves and the have-nots.  It is not all about money, as NDP style socialism has negative social consequences for everyone.

Highly skilled and productive people, such as entrepreneurs, technical engineers, corporate managers, doctors, scientists, and software developers, will migrate to where the opportunities exist and the economic climate is most favourable.  The underlying government ideology about the cost and size of government means everything for national success and the general standard of living.  The proven axiom is that the more extreme the socialist government behaves, the worse off are people, especially lower-income earners and those who need public assistance.

There are common misconceptions perpetuated by the political left in Canada that top income earners pay little in taxes and that increasing taxes on this income group is an effective way to achieve economic justice and generate significant additional revenue for expanded social benefit programs.

In Canada, top income earners already pay a disproportionately large share of taxes, whether through income tax or other levies.  This reflects our shared value that those who succeed should contribute more, consistent with Canada's progressive tax system.  However, the balance has gone over the tipping point.

In contrast to the federal government’s stated expectation, the tax increases that Ottawa imposed on top income earners yielded less revenue than policy-makers predicted, as affected taxpayers adjusted their work and social behavior over time.  Also, investment plans changed.  A similar result will occur if the governments decide to increase tax rates further.  The time-proven principle applies.  High taxes, especially a steep progressive tax system, are not as beneficial as politically advertised, as they especially hurt lower-income earners, and do not maximize full revenue potential.

Income inequality did not come from 'exploitation' or some evil financial controllers.  It stems from economic growth driven by a free enterprise system, which has lifted more people out of poverty than all government programs combined.  Capitalism—free enterprise, not cronyism—has fueled innovations that improve our lives.

From electric power, the automobile, the airplane, and air conditioning to Uber, 3D printing, and SpaceX: all marvels of modern civilization came from the pursuit of profit, not government planning and excessive regulation.  Even the iPhone, Internet service, and the platforms that clueless activists use to promote leftist ideologies were all built by capitalists.  Yet socialism is making a comeback in popular thought.  Why?

It is very easy to make unrealistic promises.  It costs nothing to promise free stuff.  It takes little thought to get applause by saying, “eat the rich,” “cancel student debt,” or “a home is a human right.”  However, if degrees of socialism work so well, why are people always trying to escape from it?  Why do people cross deserts, climb walls, and risk drowning to get to the free enterprise west like Canada and the USA, and not Cuba, China, or other socialist controlled societies?  Why does socialism always fail?

Idealist political philosophies, once applied, always sour.  The socialist system is inefficient and becomes inhumane because it is built on false ideas.  It takes away the incentives and also accountability to produce and improve, because it violates human nature by denying the right to ownership and business initiative.  Open competition and marketplace choice help make the self-renewing system work.  In the longer term, socialism can only be maintained by institutional coercion and violence.

Those who are unfamiliar with history often imagine socialism as voluntary, communal sharing.  It sounds kind and generous.  In practice, socialism disrespects human dignity, destroys autonomy, and puts economic and social power into the hands of unaccountable politicians, bureaucrats and technocrats.  When that happens, what usually follows is abuse, corruption, waste, poverty, misery, and hopelessness.

Take seriously the life stories of those who have survived socialism.  Ask the Eastern Europeans why they risked their lives in attempts to escape their socialist countries after WWII.  Why do the North Koreans pay smugglers to sneak them out of Kim’s paradise, risking torture and execution?  Find out what the Venezuelans think of socialism while waiting in line for hours to buy toilet paper.  They previously had an oil-rich developing economy that socialist demagogues ruined. 

For over a century, people who tried socialism have always voted against it with their feet.  They build boats out of garbage to move their families from controlled economies to the free-enterprise Western economies.  No one is running from capitalism, because it yields freedom and opportunities to pursue a good life.  Socialistic philosophy may sound reasonable in an academic lecture and TikTok clips, but it ends in poverty and repression.

Capitalism has its blemishes, as extremes are regulated, because it evolves organically from market interactions among flawed human beings, and that is also why socialism is not the solution.  Canada’s founders got it right.  The pursuit of peace, order, and good government means the freedom to try, to fail, to learn, and to thrive, without a heavy-handed government deciding who gets what.  It is our moral duty to secure that legacy for our children.

Canada has been a political and economic free-enterprise democracy that calls for free markets, limited government intervention, privatization, deregulation, and free trade.  The philosophy especially emerged following the Second World War, through the work of economists such as John Kenneth Galbraith, Friedrich Hayek, and Milton Friedman.  After the economic crises of the 1970s, confidence in Keynesian economics was somewhat diminished.  This allowed conservatism to gain prominence.  It became mainstream under Margaret Thatcher in the UK, Ronald Reagan in the US, and Brian Mulroney in Canada.  Globalization boomed with the rise of free trade agreements such as NAFTA.  William Spencer Vickrey, Michael Walker, and Stephen Harper took wise economic thought and practice in the Canadian context to the next positive level.  However, recent crises and excesses have prompted governments to adopt more interventionist approaches, which will likely do more harm than good.  The hopes for wise financial administration from academic Mark Carney have completely faded.