Tax collection from the wealthiest individuals and corporations has fallen worldwide since World War 2, while government subsidies, bailouts and support programs favouring the wealthiest constituents have soared.

The plunging US corporate income tax revenue as a portion of GDP (below since 1934) reflects a trend that has played out across all OECD countries.
 

At the same time, the highest federal marginal tax rate for individuals was continually lowered from 94% in 1944 to about 28% in 1988 (US, red line below, since 1913). It’s 37% today.
 

In Canada, the general corporate tax rate has fallen from 50% in 1982 to 26% in 2020, while the top marginal personal tax rate has fallen from 80% in 1972 to 60% until 1981, to 33% today.

An increasing dependence on consumption taxes and rising government debt has replaced declining tax revenue. Reduced federal transfer payments to provinces and states have increased dependence on ‘sin’ taxes on things like alcohol, cannabis, gambling, gaming, and lotteries.

Now, we have an aged population where public debt charges and elderly benefit expenses are growing impossibly faster than the economy (projected below for Canada from 2026 through 2030).
 

Something has to give. Smaller government spending is desirable, and waste should be reduced wherever possible. But a civil society cannot run on cuts alone. We can’t get meaningful revenue from people who make little and have less, and we can’t pay for the future if young people are not engaged and launching households of their own. These facts require our collective attention and adult thinking as we evaluate policy paths from here.

The discussion below is on point.

Michael Green, Chief Strategist and Portfolio Manager for Simplify Asset Management, joins Julia La Roche on episode 318 to break down his viral three-part series on America’s real poverty line, revealing why families making $100,000-$140,000 are trapped in what he calls the “valley of death” – where government benefits are withdrawn before cash earnings can replace them. He explains how childcare costs, benefit cliffs, and tax code changes since the 1950s have made the American Dream nearly impossible for young families, why economists reacted so negatively to his work, and how the official poverty line ($31,200) is completely disconnected from reality. Green also discusses the implications for markets, predicting a 1929-style crash from passive investing flows, and shares what gives him hope: human potential and the power of free people over slaves. Here is a direct video link.

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