Further to Toby’s comments, Miles Corak has posted an excellent commentary on the new numbers on high incomes, together with a spread sheet showing average effective tax rates by income group from the 1980s. The big story is that the average effective tax rate for the very affluent has been stable since the early 1980s as their income share has grown, and that the average effective tax rate for high income groups has fallen significantly since the early 1990s.
I posted an Economy Lab piece on this as well. While opinions will differ on what is fair, I think the big finding here is that the income tax system has not limited rising income inequality.
- Flaherty’s Legacy: Ideological, reckless and just plain lucky (March 20th, 2014)
- IWD 2014: The “girl effect” reduces inequality, but Canada can’t coast on that much longer (March 7th, 2014)
- The labour share and income inequality (February 26th, 2014)
- Why the Minimum Wage Debate Isn’t Going to Go Away (February 21st, 2014)
- Income Splitting Déjà Vu (February 15th, 2014)