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Top Income Shares in Canada: Recent Trends and Policy Implications

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  • Michael R. Veall

Abstract

According to Canadian taxfiler data, over the last thirty years there has been a surge in the income shares of the top 1%, top 0.1% and top 0.01% of income recipients, even with longitudinal smoothing by individual using three- or five-year moving averages. Top shares fell in 2008 and 2009, but only by a fraction of the overall surge. Alberta, British Columbia and Ontario have much more pronounced surges than other provinces. Part of the Canadian surge is likely attributable to U.S. factors but a comprehensive explanation remains elusive. Even so, I draw implications for policies which might achieve some support from across the political spectrum, including the elimination of tax preferences that favour those with high incomes, the promotion of shareholder democracy and, to maintain Canada’s relatively high intergenerational mobility, continued wide accessibility to healthcare and education.

Suggested Citation

  • Michael R. Veall, 2012. "Top Income Shares in Canada: Recent Trends and Policy Implications," Department of Economics Working Papers 2012-11, McMaster University.
  • Handle: RePEc:mcm:deptwp:2012-11
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    File URL: http://socserv.mcmaster.ca/econ/rsrch/papers/archive/2012-11.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:kap:jgeosy:v:20:y:2018:i:1:d:10.1007_s10109-017-0255-0 is not listed on IDEAS
    2. Beach, Charles M., 2014. "What Has Happened to Middle-Class Earnings? Distributional Shifts in Earnings in Canada, 1970-2005," CLSSRN working papers clsrn_admin-2014-13, Vancouver School of Economics, revised 26 Mar 2014.
    3. Osberg, Lars, 2013. "Instability implications of increasing inequality: Evidence from North America," Economic Modelling, Elsevier, vol. 35(C), pages 918-930.
    4. Christoph Schinke, 2014. "Government Ideology, Globalization, and Top Income Shares in OECD Countries," ifo Working Paper Series 181, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Jean-Yves Duclos & Mathieu Pellerin, 2015. "The Evolution of Hourly Compensation in Canada between 1980 and 2010," CIRANO Working Papers 2015s-15, CIRANO.
    6. Peter Burton & Shelley Phipps, 2017. "The Economic Well-Being of Canadian Children," LIS Working papers 704, LIS Cross-National Data Center in Luxembourg.
    7. Kao-Lee Liaw & Lei Xu, 2013. "Changes in Wage Distributions of Wage Earners in Canada: 2000-2005," Quantitative Studies in Economics and Population Research Reports 451, McMaster University.
    8. Hou, Feng & Picot , Garnett, 2015. "Immigration, Low Income and Income Inequality in Canada: What’s New in the 2000s?," CLSSRN working papers clsrn_admin-2015-2, Vancouver School of Economics, revised 25 Jan 2015.
    9. Andrew Sharpe & Evan Capeluck, 2012. "The Impact of Redistribution on Income Inequality in Canada and the Provinces, 1981-2010," CSLS Research Reports 2012-08, Centre for the Study of Living Standards.
    10. Duclos, Jean-Yves & Pellerin, Mathieu, 2015. "The Evolution of Hourly Compensation in Canada between 1980 and 2010," IZA Discussion Papers 8917, Institute for the Study of Labor (IZA).
    11. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    12. Jean-Yves Duclos & Mathieu Pellerin, 2015. "The Evolution of Hourly Compensation in Canada between 1980 and 2010," Cahiers de recherche 1506, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    13. Jeff Larrimore & Richard V. Burkhauser & Gerald Auten & Philip Armour, 2016. "Recent Trends in U.S. Top Income Shares in Tax Record Data Using More Comprehensive Measures of Income Including Accrued Capital Gains," NBER Working Papers 23007, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    income concentration; income polarization; Canadian personal income tax system; intergenerational mobility; corporate governance;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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