'Canadian dream' is a myth more than a reality"

[MarchHare]

Originally Posted by CaptainCrunch

Is it a war on the middle class, or is it governments at all levels providing way to many social programs and jacking up the tax rates on the middle class?

Specifically, what taxes have increased on middle income Canadians in the past 20 years?

[Devils'Advocate]

I'm far more interested in why increased social programs have helped the top 20% see their wages skyrocket.

As implied in my initial post, the economic growth this country has seen over the last few decades has landed firmly in the hands of the wealthy. We are making no progress on improving the plight of the bottom 20% and also the middle 60% are going nowhere.

What is worse, as the CBC article points out, it is unlikely to see people in the low to middle class move into the higher class. The "Canadian Dream" is a smaller version of the "American Dream": that you can start from the bottom and with enough hard work and dedication you too can be rich and famous. But it is a lie. A lie that Americans have bought hook, line and sinker. It is what makes the poor in the US vote against their own interests - because they firmly believe that they will be rich one day. It is not as bad here, but that opinion is still out there despite evidence to the contrary.

[V]

Originally Posted by Flash Walken

Right, I wasn't trying to misrepresent you.

One thing we can agree on is that it's essentially impossible to raise a family of 4 comfortably on a single income. That's not subjective.

30, even 20 years ago, this wasn't the case.

What changed? Where did that money go?

I raise a family of 6 relatively comfortably on a single income. I just don't seem to have the raging need for consumption of high end goods that I see others fight with.

Maybe that's the answer to your question, though. The bar that seems to be set for comfortability might have shifted over the years.

[CaptainCrunch]

Originally Posted by MarchHare

Specifically, what taxes have increased on middle income Canadians in the past 20 years?

Obviously I would have to go and do some research on this when I have the time, but I believe the overall tax rates and obviously the dollar rates have increased over time and probably fairly dramatically.

I just don't believe that a blanket statement of increasing wages in the private sector for individuals in the middle and lower class would somehow magically improve the standards of living for everyone.

[FlamesAddiction]

Originally Posted by Oil Stain

My guess would be part of it being that the economical competitive advantage the developed countries such as North America and Europe enjoyed in the early part of the the Oil and Gas consumption era is shrinking. The USA is no longer buying resources from developing countries for a pittance, manufacturing goods and selling those back to the consumers at high profits. Developing countries are designing and manufacturing their own goods, so competition is driving up resource costs while at the same time the developed world loses manufacturing jobs.

That might be part of it, but I don't think the pie has actually shrunk at all... just the section of the pie that the lower and middle classes used to share is disproportionately smaller now. The upper class has seen massive increases to their wealth during the same period. This is one of the reasons why the cost of living and property values continued to rise despite the middle class remaining stagnant for the most part.

The other part would be changing expectations. If you don't care about having new cars, yearly vacations to tropical countries, eating out in restaurants frequently, designer goods, a family can probably still get by on a single income.

I don't think the average family went to Mexico every year, or even at all in the 1970's. My father never bought a new vehicle until he was in his 40's. My sister and brothers all had purchased new vehicles before they were 25.

I think people's perceptions of what they need to "own" in order to be middle class has changed greatly over the years.

Some luxuries are more easily affordable (vacations) or accessible through credit (cars), but it's a façade and a trap for many people. It's not real wealth. Just curious, but did they buy the new cars outright or did they use credit? If they paid for them outright, then that is impressive and I wouldn't think the norm.

[MoneyGuy]

The Canadian dream is not dependant on what you earn, but what you make of what you have. Most anyone can have financial security, build a moat around your family and retire comfortably and worry free.

This is the land of opportunity. Luck has little to do with it if you make smart decisions. You create your own future. Starting now.

[Sliver]

Originally Posted by V

I raise a family of 6 relatively comfortably on a single income. I just don't seem to have the raging need for consumption of high end goods that I see others fight with.

Maybe that's the answer to your question, though. The bar that seems to be set for comfortability might have shifted over the years.

Either you have a monster income or you don't live in Calgary. Which is it?

[Raekwon]

Originally Posted by Sliver

Either you have a monster income or you don't live in Calgary. Which is it?

Or living Mortgage/Rent free. I would like to know also as we would like a second kid and it doesn't seem financially feasable.

[V]

Spent the last 10 years in Calgary before moving to Edmonton a couple years ago. We haven't noticed a drastic change to our budget since the move.

I'm just an engineer, not in O&G, so it's not like I make a fortune either.

I have a mortgage that's larger than I would like, but my wife really liked this house when we moved here, so here we are.

I don't really have an answer to your question.

[Raekwon]

Originally Posted by V

Spent the last 10 years in Calgary before moving to Edmonton a couple years ago. We haven't noticed a drastic change to our budget since the move.

I'm just an engineer, not in O&G, so it's not like I make a fortune either.

I have a mortgage that's larger than I would like, but my wife really liked this house when we moved here, so here we are.

I don't really have an answer to your question.

I think it answers a lot. I'm guessing your single income is in the 80-120k range?

[Sliver]

Originally Posted by V

Spent the last 10 years in Calgary before moving to Edmonton a couple years ago. We haven't noticed a drastic change to our budget since the move.

I'm just an engineer, not in O&G, so it's not like I make a fortune either.

I have a mortgage that's larger than I would like, but my wife really liked this house when we moved here, so here we are.

I don't really have an answer to your question.

Do you live in Edmonton, or in a less expensive community around Edmonton?

I just can't help but think you're leaving something out.

Maybe you started life off with an inheritance? Maybe there is family money that subsidizes you? Maybe you are opting to save nothing for your kids' RESPs? Maybe your are under-saving for retirement? Or maybe as an engineer you have a large enough income that you can cover all that stuff independently, in which case good for you.

[Flash Walken]

Here is a disquieting point of view:

What if the need for social services has been driven by the decline in wages for the average citizen?

In a 20 year period, Canada lost 2 percent of it's GDP (3.9 percent of GDP in 1971 to 1.8 in 1991) to decreasing corporate tax rates, and 36 percent of income tax paid by the country's richest (400k+ per year) individuals.

That's a staggering loss of revenue.

[troutman]

Diane: Actually, I'd like to join you, but I have class tonight.
Thornton Melon: Oh. How 'bout tomorrow night?
Diane: I have class then, too.
Thornton Melon: I'll tell you what, then. Why don't you call me some time when you have no class?
Diane: [laughs] Alright. Maybe I will.

[Sliver]

Originally Posted by fotze

Contributing to his kids RESP's isn't a necessity.

I suppose not. I always consider it an immovable obligation, but you're right that it's not.

[V]

Originally Posted by Sliver

Do you live in Edmonton, or in a less expensive community around Edmonton?

I just can't help but think you're leaving something out.

Maybe you started life off with an inheritance? Maybe there is family money that subsidizes you? Maybe you are opting to save nothing for your kids' RESPs? Maybe your are under-saving for retirement? Or maybe as an engineer you have a large enough income that you can cover all that stuff independently, in which case good for you.

Haha, I don't know what to tell you Sliver. I actually live in St. Albert, which is more expensive than Edmonton. Property taxes are significantly higher than both Edmonton and Calgary, and the house we bought was slightly more expensive than the house we owned in Calgary.

I grew up in a single income family. My dad is a high school teacher. No inheritance, no family money. My Grandfather passed away this last summer, and I did manage to snag a 20 year old jigsaw.

I payed for my own undergrad degree, and am currently paying for my own graduate degree (with borrowed money that I'm tacking onto the mortgage, most likely, unfortunately).

I am saving for retirement, although a pension definitely helps with that (about 17% comes off my paycheque every payday). We also make low 5-figure charitable donations annually, although half of that comes back at tax time.

I'll tell you where I don't spend my money, though. Our summer vacations are camping trips. We don't go to Mexico, or anywhere tropical. My kids have never been on a plane. I took my kids to the theatre for the first time in their lives last weekend to see the Lego movie. That's the first time I've been in a theatre in about 10 years. My kids play in cheap sports like soccer because we can't afford hockey. I do enroll them in violin lessons, so that's an expense that's very difficult to make, but we manage.

My wife and I eat out about 2 times a year. She drives a 12 year old SUV, I drive an 8 year old Civic. I don't buy new top of the line kid's stuff. Most of it is used or on extreme sales. We are currently developing our basement so that we can rent it out.

Honestly, we're comfortable where we are and have everything we need. I have friends who live our lifestyle on 70-80k, and that's where I don't understand how they can do it. That seems unduly tight.

[Sliver]

Originally Posted by V

Haha, I don't know what to tell you Sliver. I actually live in St. Albert, which is more expensive than Edmonton. Property taxes are significantly higher than both Edmonton and Calgary, and the house we bought was slightly more expensive than the house we owned in Calgary.

I grew up in a single income family. My dad is a high school teacher. No inheritance, no family money. My Grandfather passed away this last summer, and I did manage to snag a 20 year old jigsaw.

I payed for my own undergrad degree, and am currently paying for my own graduate degree (with borrowed money that I'm tacking onto the mortgage, most likely, unfortunately).

I am saving for retirement, although a pension definitely helps with that (about 17% comes off my paycheque every payday). We also make low 5-figure charitable donations annually, although half of that comes back at tax time.

I'll tell you where I don't spend my money, though. Our summer vacations are camping trips. We don't go to Mexico, or anywhere tropical. My kids have never been on a plane. I took my kids to the theatre for the first time in their lives last weekend to see the Lego movie. That's the first time I've been in a theatre in about 10 years. My kids play in cheap sports like soccer because we can't afford hockey. I do enroll them in violin lessons, so that's an expense that's very difficult to make, but we manage.

My wife and I eat out about 2 times a year. She drives a 12 year old SUV, I drive an 8 year old Civic. I don't buy new top of the line kid's stuff. Most of it is used or on extreme sales. We are currently developing our basement so that we can rent it out.

Honestly, we're comfortable where we are and have everything we need. I have friends who live our lifestyle on 70-80k, and that's where I don't understand how they can do it. That seems unduly tight.

Wow dude, that sounds awesome. Straight up, it seems like you're doing life right. Thanks for sharing the details and sorry for being so skeptical.

[GGG]

Originally Posted by SebC

The closest thing to a standardized definition of middle class is the middle 60% of families sorted by income. Obviously, by this defintion, the middle class cannot grow or shrinking in terms of the number of people in contains, so a "shrinking middle class" refers to the economic size of the middle class shrinking.

Here's a chart that's relevant to the thread.

(Source - StatsCan)

Doesn't this graph show that the middle class is doing fine? This accounts for inflation by putting thing into 2011 dollars. I suppose that only partially considers purchasing power as inflation of housing recently has been greather than general inflation

To me if the Middle Class income in constant dollars has remained stagnent than that is what you would expect barring a change in economic philosophy.

EDIT: It does show that there is ample room to increase taxes on the top 20%. Another interesting graph would be to show it inclusive of government services recieved. This would better reflect how much money each group is using to live off us.

[nik-]

edit: nm

[Raekwon]

Originally Posted by V

I have friends who live our lifestyle on 70-80k, and that's where I don't understand how they can do it. That seems unduly tight.

80k is where I would put the minimum income for multiple child families with single income. I'm still trying to figure out how to reach that mark let alone the 100K that I would feel comfortable at.

[MarchHare]

Originally Posted by CaptainCrunch

Obviously I would have to go and do some research on this when I have the time, but I believe the overall tax rates and obviously the dollar rates have increased over time and probably fairly dramatically.

You're going to have to provide a citation for this, because I don't think your perception matches reality.

The last time there was a personal tax increase at the federal level was the introduction of the GST in 1991. Since then, the Liberal governments of Chretien and Martin reduced personal income tax rates (corporate taxes too, but that's immaterial to this discussion), and Harper's Conservative government lowered the GST by 2%. So at least at the federal level, Canadians have a lower tax burden today than they did 20 years ago. When in power, both parties also introduced several new tax credits that allow Canadians to further reduce their overall tax burden if they meet the qualifying criteria.

Provincially I'm not familiar with the specifics of every province, but Alberta has had a flat 10% income tax rate for as long as I can remember. However, with the elimination of the healthcare premium a few years ago, Albertans are also taxed at a slightly reduced rate now.

So as far as I can tell, your narrative that middle-income Canadians are worse off today because of increasing tax rates simply isn't true. If I'm wrong about this, please cite sources that correct me.