Newspapers in Canada widely reported on a recent TD Bank study that real after-tax income has barely budged in 15 years. The report lays most of the blame on rising income taxes and Canada Pension Plan contributions and calls for an action plan for increasing productivity, cutting taxes and investing in education.
While the report focuses on the 3.6% increase in real after-tax income over 15 years, I find it interesting that inflation-adjusted pre-tax income increased by a mere 9% over 15 years. However, household wealth has been rising much faster over the same time frame. Isn’t that good news?