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"Handouts" to the Wealthy
THE TAX SYSTEM: The principle of a progressive tax system
holds that the level of taxation should be related to the ability
to pay. In 1998 the average Canadian family paid total federal
and provincial tax of $12,490 or 20.1% of its income. If our tax
system was progressive in practice a family with income over
$300,000 would pay more than 20.1%. In fact, families with income
in excess of $300,000 paid, on average, 14.4%, or 5.7% less than
the average family. Even with a flat (i.e. non-progressive)
tax this amounts to a handout of $17,100 per family (i.e. 5.7% of
$300,000).
FRACTIONAL RESERVE BANKING: In 1984 Statistics Canada found
that the richest 20% of Canadians held 75% of the nation's
financial wealth (stocks, bonds, etc.). A more recent survey
found that the richest 1% now hold 40%. Let's take 75% as a
reasonable current estimate of the financial wealth held by the
richest 10% of Canadians. As of 1999 Canada's chartered (i.e.
private) banks have created – out of thin air please note – about
95% of our money supply
($557 billion) as debt, otherwise known
as bank credit. The interest on this debt is at least 6% every
year. If we assume that those banks are 75% owned by the richest
10% of Canadians, it follows that our government, by
allowing privately owned banks to create most of our money
supply under the fractional reserve system of banking (see
`Fractional Reserve Banking or Usury' under General
Economic Data), paid or "handed out" $25 billion to
well-to-do Canadians (6% of 75% of $557 billion). Although the
banking class would never admit it, this amounts to a $8,300 ($25
billion divided by 3 million well-to-do Canadians) "handout" for
every man, woman and child in the richest 10% of the
population.
It should be understood that
the public debt (federal,
provincial, and municipal) is overwhelmingly owned by
wealthy individuals, both Canadian and non-Canadian. The interest
paid ($77 billion in 1998) on this public debt, not to mention
the interest paid (?) on private debt is the consequence of
having a debt economy, i.e. a system by which private corporations called
banks create about 95 percent of
our money supply in the form of interest-bearing bank credit.
Now, allowing banks to create a nation's money supply is neither
an economic necessity nor an enlightened social policy. Could we
not then consider those debt payments as a disguised "handout," a
sort of tribute paid to the financial elite that has been built
into the economic organization of modern societies so skillfully
that it is rarely detected, much less questioned? We think
that you can, in which case the handout in question amounts to
(using our earlier assumptions) $57.75 billion (75% of $77
billion), or $19,250 ($57.75 billion divided by 3 million well-to-do
Canadians) for every man, woman and child in the richest 10% of
the population. That's quite an impressive handout. Of course
there's private debt too, but we won't belabour the
point.
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What Can You Do?
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