Editing Openai/694c32ff-4db8-8006-a42d-34dfb80b14ea (section)

== gpt-5-1-auto-thinking ==
=== User: Can you give me a breakdown of income vs. ===
Can you give me a breakdown of income vs. Cost growth among the different tax brackets in Canada from 1980 to now?

=== Assistant: Short version: ===
Short version:
Since the early 1980s, the cost of living has risen a lot for everyone, but income gains have been wildly unequal across the income distribution. Most Canadians have seen incomes grow just a bit faster than prices; the very top has seen their incomes explode.

I’ll translate your “tax brackets” into income groups of tax filers, which is how the long-run data are actually reported.

==== 1. Cost growth: how much have prices risen since ~1980? ====

Using the Consumer Price Index (CPI) for Canada:
* From 1982 to 2022, the price of a “typical basket” of goods and services rose about 175%. → In plain terms, something that cost $1 in 1982 costs about $2.75 in 2022. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>

So that’s our benchmark for “cost growth.”

==== 2. Income growth by income group (“tax brackets” in practice) ====

Best long-run breakdown is from tax-file data (Distributional National Accounts) analysed by Xuereb et al. for Canadians for Tax Fairness and the World Inequality Lab. WID - World Inequality Database<ref>{{cite web|title=WID - World Inequality Database|url=https://prod.wid.world/www-site/uploads/2023/12/WorldInequalityLab_WP2023_27_Income-inequality-in-Canada_Final-1.pdf|publisher=WID - World Inequality Database|access-date=2025-12-25}}</ref>

They look at tax filers grouped by income share, 1982–2022:
* Bottom 50% of tax filers
* Middle / upper-middle: 50–99% (everyone except the top 1%)
* Top 1%
* Top 0.01% (the ultra-rich, ~3,000 people in 2022)

===== 2.1 Nominal (before inflation) vs “real” (after inflation) =====

First they compare nominal income growth to CPI growth, then compute real growth.

Over 1982–2022: taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>

| Group (approx. tax “bracket”)                                | Nominal after-tax income increase | Real income growth after inflation |
| ------------------------------------------------------------ | --------------------------------- | ---------------------------------- |
| Bottom 50% (“lower brackets”)                                | +254%                             | ≈ +29% real                        |
| 50–99% (excluding top 1%) (“middle & upper-middle brackets”) | +242%                             | ≈ +24% real                        |
| Top 1% (“top bracket”)                                       | +511%                             | ≈ +122% real                       |
| Top 0.01% (“ultra-top sliver”)                               | +942%                             | ≈ +279% real                       |
| CPI (cost of living)                                         | +175%                             | —                                  |

How to read this:
* Bottom 50% - Money in their pockets (after tax) is about 3.5× higher than in 1982 (254% increase). - But prices are ~2.75× higher (175%). Once you strip out inflation, real income for the bottom half is up only ~29% over forty years — less than 1% per year on average. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* Middle / upper-middle (50–99%) - After-tax incomes up ~242% in nominal terms, so margin over inflation is only ~24% real for forty years. - They’ve done slightly better than the bottom half, but not by much. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* Top 1% - After-tax incomes have risen ~511% – roughly 6×. - After inflation, that’s about +122% real – more than double their early-1980s purchasing power. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* Top 0.01% - After-tax incomes up ~942% – roughly 11×. - Real purchasing power up around +279%.

Put differently: for the bottom 99%, income has only slightly outpaced prices; for the top 1%, income has exploded. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>

===== 2.2 Market income (before taxes & transfers) vs cost growth =====

If you look at market income alone (labour + capital before tax and transfers), the bottom half actually loses to inflation: taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* CPI: +175% (prices up 2.75×)
* Bottom 50% market income: +150% (incomes up 2.5×)
* Top 1% market income: +513%
* Top 0.01% market income: +951%

So:
'' Bottom 50%: market incomes have grown ''slower* than costs. Their modest real gains come mainly from tax/transfer policy (child benefits, GST credits, etc.), not the labour market. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* Top 1%+: market incomes grow 3–5× faster than prices, even before you adjust for tax cuts at the top. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>

==== 3. How this lines up with statutory tax brackets ====

You asked about “tax brackets,” so two key pieces:
# Top marginal tax rates fell a lot while top incomes took off - Combined top marginal personal rate (federal + Ontario example) fell from about 80% in 1970 to ~51% by the late 1980s, via reforms in 1972, 1982 and 1987. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref> - Corporate tax rates dropped from ~52% in 1982 to around 26–27% by 2022. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref> - That period coincides with the explosion of top-end incomes and corporate profits documented in the DINA work. WID - World Inequality Database<ref>{{cite web|title=WID - World Inequality Database|url=https://prod.wid.world/www-site/uploads/2023/12/WorldInequalityLab_WP2023_27_Income-inequality-in-Canada_Final-1.pdf|publisher=WID - World Inequality Database|access-date=2025-12-25}}</ref>
# Effective total tax rate has become less progressive Canadians for Tax Fairness estimate total tax paid as a share of income (income, payroll, sales, property, etc.): taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref> - 1988: - Median earner and top 1% both paid ~35% of income in total taxes. - 2022: - Median earner: pays about 43% of income in total taxes. - Top 1%: pays only 23.6% of income in total taxes. So despite higher statutory rates on high brackets, the overall system (once you include GST, corporate taxes, capital gains rules, etc.) is now effectively more regressive than it was in the late 1980s.

==== 4. Costs that hit lower brackets hardest (housing & essentials) ====

CPI is an average. Two big categories that matter most for the lower brackets have grown faster than CPI: taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* Shelter share of budgets: - 1982: shelter ≈ 23.4% of an average household’s consumption. - 2019: ≈ 29.3%. - 2021: ≈ 31.4% overall, and about 35% for the bottom-quintile households.
* Residential property prices: - House prices ~10× higher in 2022 than in 1982. - That’s about four times faster than the after-tax income growth of the bottom half; only the top 0.01% have seen income growth on the same scale as house prices. taxfairness.ca<ref>{{cite web|title=taxfairness.ca|url=https://www.taxfairness.ca/en/resources/reports/canadas-affordability-divide-how-1s-rise-left-millions-behind|publisher=taxfairness.ca|access-date=2025-12-25}}</ref>
* Recent wage vs inflation (2019–2024): - From May 1981 to May 2024, median real hourly wages rose only about 20%, and most of that was after 2003. Statistics Canada<ref>{{cite web|title=Statistics Canada|url=https://www150.statcan.gc.ca/n1/pub/11-631-x/11-631-x2025003-eng.htm|publisher=Statistics Canada|access-date=2025-12-25}}</ref> - Recent StatCan work shows that from 2019–2022 wages grew only slightly faster than CPI overall, but for many workers (e.g., hospitality), wage growth lagged prices, eroding purchasing power. Statistics Canada<ref>{{cite web|title=Statistics Canada|url=https://www.statcan.gc.ca/o1/en/plus/1615-income-meet-inflation|publisher=Statistics Canada|access-date=2025-12-25}}</ref>

So even where real incomes for the bottom 50–90% are slightly positive over 40 years, core costs like housing, rent and food have eaten up a larger slice of those incomes, particularly in the lower “brackets.”

==== 5. Putting it in one sentence ====

From roughly 1980 to today:
* Bottom half & middle brackets: - Incomes have grown only slightly faster than basic prices, and market incomes alone actually lost to inflation for the bottom 50%; transfers did the heavy lifting.
* Top brackets (top 1% & especially top 0.01%): - Incomes grew many times faster than both costs and GDP per person, while their effective total tax rate actually fell.

If you’d like, I can:
* Recast this into a GreedRadar-style graphic/table (e.g., “How Canada’s tax brackets lost to rent but the 0.01% won”), or
* Break it down by decade (80s, 90s, 00s, 10s, 20s) for narrative use in an article.