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Why Not Tax the Universities' One Per Cent?

Posted: 04/23/2012 11:17 am

Just before the 2012 Ontario budget vote, ONDP leader Andrea Horwath successfully injected a conversation about increasing the taxes of the ultra-rich into the political sphere.

She placed her party's support for the budget contingent increasing income taxes by two per cent for Ontarians who make more than $500,000. Forget the one per cent who in Canada, make an average income of $387,400, according to the Canadian Centre for Policy Alternatives. Horwath wants to make the elite of the elite pay just two per cent more. On Monday, April 23, Dalton McGuinty agreed to the tax increase.

Some of these ultra-rich work in the universities. Horwath's tax for the +$500,000 will affect just four employees in the entire sector: three presidents and one professor. They will take home two per cent less of their taxpayer and student funded salaries.

In post-Drummond Ontario, how could anyone working at a university find themselves among the half-millionaires club, let alone the one per cent? Despite Drummond's assertion that financial ruin would beset Ontario if university workers' wages weren't tackled, he missed the opportunity to recommend cost savings through implementing a cap on public sector compensation.

There are 248 lucky university folks and 49 even more lucky college folks who rise above $250,000. These salaries reach $89 million when added together. Number one is a staff person, the president and CEO of the University of Toronto's Asset Management Corporation. In 2011, William Moriarty made $655,995. Number two is the luckiest Canadian of all: For working no days at the University of Waterloo in 2011, Governor General David Johnston maintained his $610,504 salary. Waterloo issued a statement to say this is totally normal. They issued a nearly identical statement last year.

In fairness, maybe it is normal. Former vice-president administration at Ryerson University Linda Grayson was paid just over $270,000 in 2011 despite having left Ryerson in 2010.

The third-highest earner is also the highest paid professor. Former Goldman Sachs vice-president investment banker Kent Womack was paid $560,928 last year.

The highest paid trio in the college sector is the presidents of Seneca, Humber and Conestoga colleges: David Agnew ($396,360), John Davies ($427,915) and John Tibbits ($409,900), respectively. Davies pulls to the front when his nearly $13,000 in benefits are added to his salary.

Ontario's public sector salary disclosure (or, the Sunshine list) catalogues everyone working at colleges or universities who makes more than $100,000. This can range from workers who, after decades of service and a strong union, have finally cracked the threshold, to celebrity professors like Richard Florida (he made just over $370,000). Or runner-up mayoral candidates, like George Smitherman, who made $158,833 for specially advising Ryerson president Sheldon Levy, who made $360,000.

These salaries should be considered against the increasing costs borne by students. Built into the 2012 Ontario budget is the assumption that students will pay another five per cent increase in tuition fees.

If the NDP get their way, only four men in the entire college and university sector--one of whom didn't actually work in the sector last year--will see their taxes increase by two per cent.
There is wasteful spending in the college and university sector but the Sunshine list refutes Drummond's claim. It's not at the faculty level and certainly not at the support staff level.
Institutional presidents, the ones who dominate the top of the list, have the closest ties to government and greatest influence over policy. This is likely why administrative salaries have been allowed to balloon while students have had to pick up the tab through an education tax that has increased by five per cent annually.

Horwath's exercise has demonstrated the popularity of tax increases for the ultra rich, but it could have been extended further. Existing systems of wealth re-distribution must be used to offset the perceived need to increase tuition fees through corporate taxes and extending the definition of ultra-rich to the entire one per cent.

Until a tax increase for the one per cent is normalized public policy, and an education tax for students is considered outrageous, social inequality in Ontario will continue to grow.
There were no students on the Sunshine list.

 

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HUFFPOST SUPER USER
Tyler Austin
Women = people. Corperations ≠ people.
08:46 PM on 04/23/2012
Well if the teachers are making more then 500,000 a year then I'm sure they will be taxed. So... whats the big deal?
And universities are not indeviduals so I'm not sure why we're talking about personal tax rates anyway.
Also don't we give universities a bunch of money from the Province anyways?.
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HUFFPOST SUPER USER
Alex Betsos
08:35 PM on 04/23/2012
Umm. Student tuition rates barely cover the costs of running a university. You' don't pay the full fee for university. Stop looking at it as an increase, and more of as feeling the actual weight of the degree you are about to receive. It's true, in our parents time they paid a lot less for university. that's because there were fewer people and MORE of the cost was covered by the government.
Also why would students be on the sunshine list. That's absurd. You go to university so that maybe if we're lucky we can get on that list. Not to mention 100 000 is not a whole lot of money anymore.
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HUFFPOST BLOGGER
Nora Loreto
12:41 PM on 04/25/2012
Do you mean feeling the weight that we're likely to face of unemployment? If we looked at K-12 education in this way, our system would be totally inequitable. And the last line was tongue-in-cheek. I thought that was clear but maybe not.
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07:29 PM on 04/23/2012
sometimes little $ punishment goes the long way, Universities waste a lot of money.....
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HUFFPOST SUPER USER
Doctor Nick
Hi, everybody!
06:57 PM on 04/23/2012
I'm not sure what the message is here. Should we be raising taxes on everyone who makes over 100K instead of 500K? Or raising taxes only on the top one percent (387K)? Or should we be freezing professor salaries (for all professors, or only those making over 100K) if tuition is rising at more than X% per year (I'm not sure what Nora considers fair - maybe 2% for inflation?).Should we not be trying to compete for "celebrity" professors? Or should we be only freezing (senior) administrative salaries?
While I agree broadly in income redistribution through the tax code or through freezes/cuts to high paid civil servants (including professors), the only thing clear from this article is that Nora wants lower tuition. That is understandable, but in a world of finite resources I'm not convinced some increase in tuition is a bad idea, particularly for (a)children of wealthy parents and (b)fields of study with limited career options or social value.
06:28 PM on 04/23/2012
Lets tax doctors extra because they work in health care .... silly article. Success should not be punished, but encouraged!
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HUFFPOST SUPER USER
Kristopher Leang
training to take down the elite
08:09 PM on 04/23/2012
i dont think you understand the concept of paying your fair share. the rich use the roads, health services and other government programs too. since they are richer, they infact probably use it more, driving bigger and more vehicles more often (because they have the means) hence using the road more than their poorer counterparts. they also fly more, polluting our air.

this isnt about punishing anyone, its about paying your share. please stop spreading this right wing propaganda, its untrue
12:01 PM on 04/25/2012
What propaganda did I spread? How much is fair? Your concept of fair and mine seem to differ, maybe because it is an intrinsic notion of how one feels about their contribution. Doctors pay their share in taxes and the crucial service they provide. I think that's fair.

Before you go and assume that I am a doctor spreading right wing propaganda, I'm neither. But that does not mean I don't appreciate the service they provide.

How bad is life in Canada? Are the roads not maintained? Are your rights not respected? What I was posting about was this divisiveness that seems to have emerged over the last few years. We must respect the contributions of all Canadians without having to use the moniker of rich and poor.

At least we have the right to healthy debate. Lets agree to disagree.