Windsor Star

ROBBED BY THE RICH, THE LEFT ARGUES.

UNDER ATTACK BY GOVERNMENT, THE RIGHT CLAIMS. BUT IN REALITY THE MIDDLE CLASS ARE DOING JUST FINE. AND THE LIBERALS’ TAX PROPOSALS WON’T CHANGE THAT.

- ANDREW COYNE,

The thing you have to understand is that this is all about the middle class.

The Liberals are proposing to limit the ability of owners of small private corporatio­ns to avoid tax because they are so determined to look out for the interests of the middle class — because, as Finance Minister Bill Morneau explained in Parliament the other day, “our system right now encourages the wealthiest Canadians to set up a private corporatio­n so they can pay a lower tax rate than middle-class Canadians.”

And the Conservati­ves are opposed to these changes for exactly the same reason: to protect the middle class. The people who will pay for these tax changes, Conservati­ve Leader Andrew Scheer thunders, are “not wealthy Canadians; these are hardworkin­g, middle-class entreprene­urs planning and creating jobs.” By contrast, he notes, the Liberal proposals would do nothing about the numbered companies and family trusts from which the wealthiest Canadians benefit — wealthy Canadians such as, oh, Bill Morneau. And Justin Trudeau, while we’re at it.

Class warfare has a rich political legacy, of course. What is curious about the modern version of it is how oddly one-dimensiona­l it is. Previous generation­s of class warriors cast society as an epic battle of labour against capital, the working class against the upper class. Today, it’s all about the middle class, those hard-working, long-suffering, put-upon folk, whom every party vows to defend and whom, to hear their opponents tell it, every party is eager to attack.

Hard work is the universal theme of the middle-class pander: the middle class, it seems, being the only one to put in an honest day’s labour, unlike the idle rich or the skiving poor.

You work hard, the right tells the middle class. Why should the government take so much of what you’ve earned? You work hard, the left tells the middle class. Why should others earn so much more than you?

Each agrees the middle class is being held back, pinned down, dragged under. They differ only on who is the villain — the government, in the right’s account, the rich, in the left’s.

All this bipartisan flattery of middle-class vanity and stoking of middle-class resentment­s is made easier by the absence of any shared definition of the term. Most people in North American societies think of themselves as being middle class, and politician­s are content to let them think it, “most people” being another way to say “a majority of the voters.”

Asked in Parliament to supply a definition, the best Marc Garneau, the transport minister, could come up with was that “the government of Canada defines the middle class using a broad set of characteri­stics that includes values, lifestyle, and income.” He added that “middle-class values are values that are common to most Canadians from all background­s, who believe in working hard to get ahead and hope for a better future for their children.” So: everyone, then.

In fact, many of the selfstyled middle class are rather better off than they imagine. The median household’s total income was about $70,000 in 2015, according to the 2016 census. The median individual taxfiler, StatsCan reports, had just $34,000 in total income. Yet many people with incomes considerab­ly above these benchmarks consider themselves middle class, and policies catering to their interests are justified on that basis.

It has often been remarked that the Liberals’ famous “middle-class tax cut” in fact delivered the maximum benefit to taxpayers with incomes of about $90,000, nearly three times the median, while continuing to deliver a net tax cut to Canadians earning in excess of $200,000 (since those in the top tax bracket also benefit from cuts in the lower brackets).

The economist Stephen Gordon has noted that much of the venom directed at the “one per cent” comes from those in the next 19 per cent, well represente­d in the academic and media world, whose share of total income has also been growing (actually, since 2006 the one per cent’s share has been falling) but who have deftly deflected any blowback from those below to those immediatel­y above them, by posing as angry members of the forgotten middle class.

The middle class — the actual one, not the pantomime one — has not been doing as badly as all that, of course. Median incomes rose more than 20 per cent after inflation over the last two decades; they are now, not only at their highest level ever, but among the highest in the world. But if people are prepared to believe they are middle class when they are not, they are no less capable of believing tales of how badly off they are, and how badly treated.

Of course, what matters to many people is not that they are paying too much tax, but that others are paying too little. Here again, you’d think the news would be of some comfort: the latest figures, compiled by the Canadian Taxpayers Federation, show the top one per cent (those with incomes above $250,000), while they earn about 10 per cent of all income, pay about 21 per cent of federal income taxes. The top eight per cent of taxfilers bear more than half the total burden.

That’s not an argument against the Liberals’ latest proposals, which contrary to opposition rhetoric would hit, not the middle class, but a relatively small number of relatively well-to-do taxpayers. The case for closing tax preference­s is not that the rich pay too little tax overall, but that they pay too little in this particular respect.

Still, it does suggest the left’s preferred narrative, that the middle class are being robbed by the rich, is as false as the right’s, that they are under attack by the government. The middle class are making out just fine.

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