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

==== 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>