Do not confuse income and wealth.

A letter to my local daily newspaper argued recently that "high-income earners are paying their share."

High-net-worth individuals' incomes deriving mainly from capital gains, one's "share" is more complex than one's taxable income might suggest.

Unrealized capital gains (held financial assets' change in price) can and do accumulate exponentially, dwarfing the net worth of workers who generally spend their pay on living expenses and might have a few dollars in a savings account if they are lucky.

According to the Toronto Star, July 6, 2023, "The wealthiest 20% of households controlled nearly 68% of the total net worth in Canada in the first quarter of 2023, while the least wealthy 40% accounted for 2.7%."

A Jan. 15, 2023, Oxfam Canada study ("Richest 1% Bag Nearly Twice As Much Wealth As The Rest Of The World Put Together Over The Past Two Years") reports that "For every $100 of wealth created in the last 10 years [in Canada], $34 has gone to the richest 1 per cent and only $5 to the bottom 50 per cent. This means that the richest 1 per cent have gained nearly seven times more wealth than the bottom 50 per cent in the last 10 years."

High-net-worth individuals justify this inequality with a Fraser Institute study, "Measuring Progressivity in Canada's Tax System, 2022," which concluded that the top 20% of income-earning families in Canada pay more than half of total taxes, including personal income, sales and property taxes.

But a high-net-worth individual's income is mainly capital gains – not unrealized capital gains, which can accrue forever without being taxed, but those that are booked (realized) when a financial asset is sold.

Of booked capital gains, only 50% are taxed (67% in certain cases according to recent rule changes), and, by a complex set of deductions, limits, and exemptions, that 50% are taxed at about half the rate on ordinary income, a rather generous privileging of realized capital gains relative to earned income such as wages.

Unrealized capital gains are an entirely different animal, as the transcript of an April 19, 2022, Trans Canada Wealth Management video, "Using a Margin Account," explains:

With a margin account, you can borrow against your securities, and just like that, you get the money. You can do whatever you want with it.

You do not have to pay any taxes when you borrow money on margin. …

Margin accounts give you flexibility if you ever run into any issues where you need money quickly. You can borrow against your portfolio and then pay it back.

The capital gains of a senior whose life savings amount to the value of the family home deserve protection, but margin account borrowing is a trick that allows speculators in land, housing, and the derivatives casino to extract liquidity from unrealized capital gains without realizing them and thus not paying taxes on that income.