Juno News - Reality Check： The rich aren’t Canada’s problem

00:00:00.000 I'm Jasmine Moulton and it's time for a reality check.

00:00:10.900 Reality check is a new show that we'll be dropping every Wednesday that will use facts

00:00:15.440 and logic to debunk the favorite arguments of the left. So don't miss out. Tune in every week,

00:00:20.720 every Wednesday on YouTube or subscribe wherever you get your podcasts. Don't miss a show. For our

00:00:25.680 topic this week, we're going to be tackling one of the left's biggest obsessions and that is the

00:00:30.880 rich. Take a listen. The cost of everything is going up. Some say it's because of supply chain issues.

00:00:36.500 Some say it's because the government spent money on programs to help people in need.

00:00:40.420 Here's the truth. Why is the cost of everything going up? Simple answer, greed. When the cost of

00:00:46.840 things go up, it hurts some people, but it benefits those at the very top. And it's not the grocery

00:00:52.540 store workers, those that stock the shelves, farmers that grow your food or small businesses

00:00:57.200 and grocery stores like this. Large corporations, big box stores and big retail are making record

00:01:03.780 profits in this time. Why should you pay more and more just so that large corporations can make more

00:01:10.260 and more profit? It's a rigged system. So here's the most important economic fact of our time.

00:01:17.600 We are living in an age of surging income inequality, particularly between those at the very top

00:01:24.980 and everyone else. This shift is the most striking in the U.S. and in the U.K., but it's a global

00:01:32.000 phenomenon. It's happening in communist China, in formerly communist Russia. It's happening in India,

00:01:38.740 in my own native Canada. We're even seeing it in cozy social democracies like Sweden, Finland,

00:01:44.940 and Germany. From what we heard from those two clips, we can basically boil the left's arguments

00:01:49.780 about the rich down to two main arguments. One, that the rich don't pay their fair share,

00:01:55.440 and two, that the rich are getting richer and the poor are getting poorer. Now, the first thing to do

00:01:59.900 when you hear these arguments is to ask for a definition. There's no single definition of what

00:02:05.140 the rich means, and it really is this nebulous term, but it's worth nailing down what their definition

00:02:09.960 is of the rich, because that could really impact what they think should be done about this problem.

00:02:15.540 Now, usually what the left means when they're referring to the rich is the top 1%, but still,

00:02:21.720 that definition doesn't suffice because there are two different categories that mean two very

00:02:26.260 different things. On the one hand, you could have the top 1% of income earners in Canada,

00:02:31.160 and on the other, you have the top 1% of wealth in Canada. What you might be surprised to learn is

00:02:37.280 that in order to qualify as the top 1% of income earners in Canada, you just need to earn over $250,000

00:02:45.180 a year. Now, this is according to Statistics Canada. Now, on the other hand, if they're not

00:02:50.180 talking about income earning, if they're talking about top 1% of wealth, well, that's a different

00:02:56.060 story. So according to a report from the parliamentary budget officer, in order to be in the top 1% of

00:03:01.820 wealth in Canada, and this is family wealth, the threshold to be in the top 1% is just over $6

00:03:08.480 million. I believe it's something like 6.1 million. So just to recap, first step, anytime you hear those

00:03:13.960 arguments, always ask them to define what they mean by the rich, because their definition will have big

00:03:19.100 impacts on what they think should be done about the problem. So as I said, the left have two main

00:03:23.680 arguments when it comes to the rich. A, that the rich don't pay their fair share, and B, that the rich are

00:03:28.180 getting richer, and the poor are getting poorer. Let's debunk argument number one, that the rich

00:03:33.180 don't pay their fair share. The Fraser Institute released a report that said that the top 20%

00:03:37.760 of income earners in Canada paid about two-thirds of all income taxes in Canada. It was about 64%.

00:03:44.780 That's a big chunk. The top 1% of income earners in Canada pay for 18% of all income taxes in Canada.

00:03:51.840 So the very first question that you should ask a leftist if they say that the rich should pay their

00:03:55.940 fair share is, what would be fair if 1% of Canadians pays 18% of income taxes, how much more should

00:04:02.900 they pay? If 20% of the top income earners in Canada cover 64% of income taxes, how much more

00:04:10.380 should they pay to make that fair? In fact, Dr. Mark Milkey published a report with the Canadian

00:04:15.740 Taxpayers Federation that found that one-third of tax filers in Canada, which is about 9 million

00:04:21.540 people at the time of the report, they don't pay any income tax at all. So the entire income tax burden

00:04:28.420 is borne by two-thirds of tax filers in Canada. His report goes on to show that in jurisdictions in

00:04:35.280 Canada where there are a number of high-income individuals, they actually serve to alleviate the

00:04:41.440 tax burden on middle-income and lower-income Canadians as well. So if anything, it really helps

00:04:47.420 to have high-income earning people in paying tax in the same jurisdiction as you because you'll end

00:04:53.500 up paying less taxes. Your tax burden is relieved. It actually helps middle-income and lower-income

00:04:59.480 Canadians when we have higher-income Canadians who can help to shoulder the burden. So it really isn't

00:05:05.180 true. If the left is pretending to care about lower-income Canadians, they wouldn't really want to get rid 0.85

00:05:11.960 of the higher-income ones either. Now, that's for the top 1% of income earners. But if we shift over

00:05:17.800 to the top 1% of wealth, family wealth in Canada, well, their solution is a bit different. Instead of

00:05:24.680 increasing, as we know, with income tax, it's a graduated tax system, people who earn more pay more.

00:05:31.620 Now, whether that's a good idea might be a topic for another podcast. But when it comes to wealth,

00:05:36.640 the left shifts their argument and they say that instead of a graduated system like we have on

00:05:42.060 income, we should have a wealth tax that slaps in, comes into effect at a certain level of wealth. Now,

00:05:48.320 a wealth tax is a terrible idea, which again, probably deserves its own entire show. It's that bad. But

00:05:55.940 I think that we need to touch on it because it always comes up in this debate about the rich. The left

00:06:00.840 is always saying that there should be a wealth tax. The evidence should speak for itself. There's been a ton

00:06:05.800 of European countries that tried wealth taxes and abandoned them because they don't work and

00:06:09.860 there are a lot of money to implement. But in Canada, the parliamentary budget officer actually

00:06:14.500 released a report saying that if we had a wealth tax, they're not really sure, but it might bring

00:06:20.200 in $5.6 billion. I did a quick calculation and $5.6 billion, the revenue that a wealth tax would bring

00:06:26.740 in, wouldn't even cover four days of Justin Trudeau spending. So you'd get to partway through

00:06:32.260 Thursday before that revenue would run out. So just to recap, the rich do pay their fair share.

00:06:37.400 They pay the vast majority of income taxes in Canada. They actually help to alleviate the tax

00:06:42.560 burden on lower income Canadians and middle income Canadians. And a wealth tax is very poorly understood

00:06:49.940 by the left, but it wouldn't do anything to alleviate the financial mess that Canada's in,

00:06:55.700 but it would wreak havoc on industry and a variety of industries. It would just wreak havoc generally

00:07:03.380 in Canada. All right. And now to debunk the left's second typical argument when it comes to the rich,

00:07:08.660 which is the rich are getting richer and the poor are getting poorer. I am so excited to debunk this

00:07:13.180 because it's such a ridiculous statement that can be proven wrong so easily, which I can't wait to do.

00:07:18.160 But first watch this clip. 0.91

00:07:19.420 Let me give you a few numbers to place what's happening. In the 1970s, the 1% accounted for about

00:07:27.760 10% of the national income in the United States. Today, their share has more than doubled to above

00:07:36.480 20%. You may recognize for our podcast listeners that voice. It was our, it is our finance minister

00:07:43.880 and deputy prime minister, Christia Freeland. Now this is from a Ted talk that she had years ago,

00:07:50.040 but why I wanted to include this clip is because it really underpins the philosophy of the current

00:07:55.260 government in Canada of prime minister, Justin Trudeau and the way that he's this government is

00:08:01.140 really revolves around this idea that the rich are getting richer, the poor are getting poorer.

00:08:06.860 This philosophy played a big role in why Christia Freeland holds the position that she has today. 1.00

00:08:11.880 The book that she wrote Plutocrats outlines this philosophy and her Ted talk does as well,

00:08:18.140 which we just listened to. And the very first way to counter this argument that the rich are

00:08:22.640 getting richer and the poor are getting poorer is very simple. It's that it's not an empirical

00:08:27.120 argument. It's an emotional one. Empirical being something you can measure. We can clearly measure

00:08:33.040 that the poor are not getting poorer globally and here at home in Canada. In fact, Dr. Steven Pinker is

00:08:40.540 someone whose work on this I really admire. So he's a Harvard professor. He's out of Montreal,

00:08:45.200 actually a proud Canadian. And he said this, he dismisses the rich getting richer, poor getting

00:08:51.020 poorer argument as a relativistic one, meaning you're just comparing things relatively. Is the gap

00:08:56.900 widening? Well, is that really the relevant question? Because it would be far more relevant

00:09:02.060 to focus on measures such as absolute prosperity. It doesn't matter necessarily where the poor are in

00:09:07.980 relation to the rich, but more so how are the poor doing generally? Are they moving up the ladder?

00:09:13.740 Are they getting a better quality of life, et cetera? Just because there's inequality that doesn't

00:09:19.200 equal poverty. He calls that a logical fallacy. As I said, what we actually see around the globe and

00:09:25.100 here at home in Canada is that the poor are getting richer. Let me read a quote to you from

00:09:29.920 humanprogress.org. Globally in the past 25 years, more than 1.25 billion people escaped extreme

00:09:37.720 poverty. That equates to over 138,000 people being lifted out of poverty every single day. Now this

00:09:45.380 stat should make people happy. And if it doesn't, if it angers them because it debunks their argument

00:09:50.920 that the poor are getting poorer, then that should tell you a lot about who you're talking to. But

00:09:55.000 fortunately, I mean, that's something really incredible that people are being lifted out of poverty

00:09:59.640 every single day at alarming rates and not just around the world, but also here in Canada. So

00:10:06.140 according to the government's own data, which is published on its website, poverty in Canada is at

00:10:11.880 one of the lowest rates it's been in recent history. And it's a pretty sharp decline as well. Now the

00:10:17.060 left also, when they talk about the rich, like to talk about them, like they're this exclusive

00:10:21.140 impenetrable group that there's, you know, a group of maybe Toronto elitists or something like that,

00:10:27.380 that we just, we can never aspire to join. It's impermeable. We just will never gain entry into

00:10:33.100 that exclusive group. But Statistics Canada actually shows another story. So I took a look

00:10:39.300 at some recent census data. And if you look at the top income earners in Canada, five years ago,

00:10:45.880 only 50% of the current top income earners in Canada were in that group. So it really is quite

00:10:52.720 fluid. I mean, there is room for social mobility in Canada. The Canadian dream is alive and well.

00:10:58.620 It's just simply not true that there's this group of rich people in Canada that stay rich and the rest

00:11:04.320 of us can't ever gain entry. But here's one of the biggest mistakes and flaws that the left has in

00:11:09.640 their logic when it comes to the rich. The left talks about the pie as if when the rich gain their

00:11:16.360 portion of the pie or economic growth, as the rich get richer, they think that necessarily it's a

00:11:23.380 zero sum game, which means that the poor have to get poorer. But what they don't understand is that

00:11:28.080 in any sort of growing economy, while your portion might get smaller, your total wealth might actually

00:11:34.180 be bigger. So you'd have a smaller piece of the pie, but you'd actually have more in your pocket at

00:11:38.480 the end of the day. So your retort in this case really should be that the focus should be on growing

00:11:43.220 the pie, not on redistributing it. Now, this actually brings me to one of my favorite examples.

00:11:49.800 It's a video clip that we'll play in just a moment that explains why the wealthy get a bad rap, but

00:11:56.000 really they do play an important function in our society in upward mobility within our society.

00:12:02.260 Here's the clip.

00:12:02.720 Why is it we have this lack of money where people who can't support themselves decently and get a 1.00

00:12:08.880 decent job where all these big men are up on top making oodles and oodles of money? They don't 1.00

00:12:13.820 need it. They can only eat that much, eat in a sleep in a bed. And what do you suppose they do?

00:12:17.620 If they don't eat it and don't use it, what do you suppose they do? They hoard it.

00:12:21.660 And what do you mean they hoard it? Do you mean they put it under their pillows? That's right. No.

00:12:25.080 They keep investing it. Investing it in what? That's right.

00:12:27.960 What are they invested in? Well, in oil and everything where, I mean, all these other people.

00:12:33.220 What are they invested in? Don't get off the subject. No. What are they invested in?

00:12:36.380 Well, they invested in a lot of different things that the little people need.

00:12:40.920 Well, do they invest it in factories? Yes.

00:12:43.100 Do some of that money end up in machines? Yes.

00:12:45.200 Do those factories and machines provide ordinary working people with jobs or not?

00:12:49.760 What do you suppose the productivity of this country would be and of the wage rate would be

00:12:54.040 if the total amount of capital in this country today was what it was 100 years ago?

00:12:59.640 Where do you suppose the improvements in productivity come from except from the investment by people of their savings?

00:13:08.940 But let me go to your fundamental question.

00:13:11.400 First place, nirvana is not for this world.

00:13:14.660 There is no paradise.

00:13:16.860 Of course, we've got a lot of people who are poorly off.

00:13:19.320 But if you look at it over time, if you get a sense of proportion, the well-being of ordinary people has been the main thing that has been improved by economic progress and economic growth and development.

00:13:34.020 That was famous economist Milton Friedman explaining the value of investments that help spur innovation and entrepreneurialism within our society.

00:13:42.780 To conclude, when politicians in Canada, leftist politicians like to focus on and target the rich,

00:13:48.400 it really is a distraction from their own atrocious financial track record.

00:13:52.940 As I've already pointed out, revenue from a wealth tax would last the Trudeau government three and a half days.

00:13:58.260 So that is not a serious solution to fix this country's financial problems.

00:14:03.460 For those of you who are unaware, Justin Trudeau has doubled this country's debt since he came into office.

00:14:09.840 Now, while finance minister Chrystia Freeland likes to blame COVID as an excuse, let's not forget, and we really should hold them to account here,

00:14:18.080 that government added $100 billion to the country's debt before COVID-19.

00:14:24.260 So recall, they were in office five years before COVID-19 was even a word anyone had heard,

00:14:29.880 and they added $100 billion to the debt.

00:14:32.960 If you're $100 billion off the mark, you shouldn't be giving anybody financial advice.

00:14:37.980 You should really be doing some introspective thinking about maybe how you could do better managing the economy.

00:14:43.400 Quite frankly, this government shouldn't be looking at the rich to solve its financial problems.

00:14:47.080 They should be looking in a mirror.

00:14:48.120 The most obvious retort when governments like, or politicians like Jagmeet Singh, Justin Trudeau,

00:14:55.780 like to talk about how the rich get richer,

00:14:57.820 is that they're conveniently ignoring how their government enriches the already quite wealthy families in this country.

00:15:05.240 My favorite example of this was when the Trudeau government gave $12 million to Loblaws

00:15:11.120 to put in some sort of environmentally friendly freezer.

00:15:16.780 So $12 million of tax taken from taxpayers' pockets,

00:15:21.640 given to a large company owned by one of the wealthiest families in Canada.

00:15:26.800 I think that, so it's owned by the Wesson family.

00:15:29.180 I think that their total net worth is somewhere around the $10 billion mark.

00:15:34.060 I think they're something like the fourth richest family in the country.

00:15:37.240 It's insane to think that a government who pretends to defend the interests of the lower income and middle class

00:15:45.080 would take money out of their pockets and hand it over to one of the wealthiest family companies in the country.

00:15:51.840 If the left was really serious about helping lower income Canadians or even the middle class,

00:15:58.020 they would acknowledge the fact that the best poverty reduction tool we've ever known in the history of mankind

00:16:04.020 is the market economy.

00:16:05.620 So to recap, here's a reality check for leftists complaining about the rich.

00:16:10.340 The rich do pay their fair share.

00:16:11.740 They pay most of the income taxes in Canada.

00:16:14.080 Two, a rising tide floats all boats.

00:16:15.940 As the rich get richer, investment and absolute prosperity increases across the board.

00:16:20.780 Getting rid of the rich in Canada would hurt entrepreneurialism and innovation,

00:16:24.860 which are two things that this country desperately need right now.

00:16:27.660 Lastly, the real solution here is smarter, smaller, and more accountable government.

00:16:31.400 That's our show for this week.

00:16:32.420 Thank you for tuning in to Reality Check with Jasmine Moulton.

00:16:35.080 Don't forget to follow us wherever you get your podcasts.

00:16:38.900 Like, subscribe on YouTube.

00:16:40.900 And remember that we're releasing a new show every Wednesday.

00:16:43.800 See you next week.

Juno News - July 27, 2022

Reality Check： The rich aren’t Canada’s problem

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