If you earn $136,275, you’re in the same federal income tax bracket as Gerry Schwartz, chief executive of Onex ($88 million); Nadir Mohamed, CEO of Rogers ($27 million); Donald Walker, CEO of Magna International ($19 million); and Gordon Nixon, CEO of the Royal Bank ($14 million).

Approximately two million Canadians are taxed at Ottawa’s highest rate: 29 per cent. The vast majority make between $140,000 and $170,000 — a comfortable but not princely income, especially for residents of Toronto, Calgary and Vancouver. But 422,000 are millionaires (118,000 of them in this city) and 32 are billionaires.

Is it fair that they are taxed at the same rate as an oncologist in Cambridge, a police inspector in Barrie, a high school principal in Toronto or a scientist at the Baycrest Centre for Geriatric Health? Is it right that Canada’s tax system, which is steeply progressive for those earning $11,138 to $136,270, suddenly turns flat at the top?

For decades there have been sporadic calls from economists, think-tanks and opposition MPs to jack up tax rates for the privileged elite. The response of the finance department is best captured by a 1985 remark from then finance minister Michael Wilson. “Canada has an acute shortage of rich people,” he told the Canadian Economics Association, dismissing the budgetary impact as negligible.

That mindset prevailed through five Conservative and Liberal governments although no politician has expressed it as bluntly as Wilson. It still holds sway, despite a dramatic widening of the gap between rich and poor; a proliferation of self-styled “supermanagers” who rake in 170 times as much as the average worker; and a deepening sense of injustice among young people, victims of corporate cost-cutting, struggling wage earners and worried middle-class families.

It is true, as Wilson observed, that imposing higher taxes on the ultra-rich wouldn’t produce a fiscal bonanza. But it would slow the growth of inequality, ensure high-income earners pay their share of the cost of running the country and give the stalled majority a stake in Canada’s economic success. It would also bring Canada’s tax code into the 21st century. When the current rules were enacted, a salary of $137,000 put an individual in the economic stratosphere. Stock options were unheard of. The distribution of wealth was relatively stable.

None of those assumptions pertain to today’s socio-economic landscape.

Ontario modernized its income tax code six months ago, adding a new bracket for individuals with taxable incomes over $150,000. Nova Scotia and British Columbia likewise have more progressive structures than Ottawa. None of them saw a mass exodus of high-rollers as the business lobby had warned. There was no sell-off of luxury estates in Rosedale, Chester or Shaughnessy Heights. There was barely a ripple of dissent.

So what is stopping the federal government?

Inertia is the biggest deterrent. Adjusting the tax system is an onerous, time-consuming task. It is easier to stick with the status quo.

Fear of throttling capitalism is a factor. Policy-makers believe higher taxes would induce CEOs to work less, exploit more tax loopholes and stash more cash in offshore tax havens.

Public ignorance plays a role. Most Canadians don’t realize Ottawa is operating with 43-year-old tax rules. Most taxpayers are unaware they bear a disproportionate share of the tax load. Most voters prefer a quick tax cut than a fairer system.

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Two new tax brackets — the C.D. Howe Institute suggests a 32 per cent rate for those with incomes over $250,000 and a 35 per cent rate at the $400,000 mark — won’t fix Canada’s impenetrable, loophole-ridden, 2,650-page Income Tax Act. But correcting its most egregious shortcoming would be a useful start.