Thought you got a tax cut? You'd better be a corporate CEO then.

Back here, and in previous posts, I have argued that our income tax system is regressive due to too narrow a margin between tax brackets and too few tax brackets. Some disagreed with me, and I'm sure still do, however, it only takes a few minutes of running numbers through a decent tax program to discover that the wealthy have a better chance of paying a lower percentage of their pre-tax income in taxes than the lower-middle class wage earner.

It appears I'm not alone in my observation.

The tax burden for the richest Canadians is falling while the poorest are paying more, according to a new study.

After years of tax cuts, the top 1 per cent of families was by 2005 paying a lower percentage of their income to governments than those at the bottom of the income scale, according to analysis of the tax system published today by the Canadian Centre for Policy Alternatives.

"Canada's tax system now fails a basic test of fairness," said Marc Lee, a senior economist with the Ottawa-based think tank.

"Canada's upper income earners are not paying their fair share in taxes compared to 15 years ago."

The policy centre said the trend is eating away at the concept that underpins the tax system – the notion of progressiveness that says those with a greater ability to pay should contribute more than others.

Lee's analysis tracks the percentage of all earnings Canadians in different income brackets send to federal, provincial and local governments in the form of income, payroll and property taxes and in fees.

It finds that the rich, with annual incomes of more than $265,000, saw their tax rate decline dramatically between 1990 and 2005 by nearly 4 percentage points to 30.5 per cent.

To be clear here, and fair, this trend is not the fault of the Harper government. It goes back to the Mulroney government and then subsequent Liberal governments which perpetuated an already flawed system. But that's only the federal side of the story. The fact is, right-wing provincial governments have an impact which can be far greater.

But middle-income families still pay about 6 percentage points more in total taxes than a family in the top 1 per cent.

"We've lost progressivity, particularly at the very top of the earnings distribution, and we should be aiming to have a tax system where the most able, the most affluent in our society, are paying a greater share of their income in taxes," Lee said in an interview.

He said this development over 15 years owes much to provincial income tax cuts such as those brought in by the governments of Mike Harris when he was Ontario premier from 1995 until 2002.

One of the reasons for that is the limits placed on other forms of taxation. The effect of the maximum allowable CPP/QPP contribution on a middle wage earner is significantly greater than that of a high wage earner, just as an example.

Lee said this shift can only pick up steam as a result of the six-year, $14 billion cut in corporate taxes decreed in the Harper government's Oct. 30 mini-budget because those who benefit from corporate earnings tend to be at the upper end of the earnings scale.

"Essentially, it's a fairly large upper-income tax cut," he said, adding that it means the whole system will likely become more unfair.

"This is going to make that trend of the regressive pattern at the very top all the worse."

And if you need to put that into perspective, small business is getting a tax reduction from 13.5% to 11%. A 2.5% reduction. Large corporations however, are getting a reduction from 22.1% to 15%. That means there is a greater amount of money from profit to be distributed among shareholders. Aside from pension funds, mutual funds and similar instruments, the wealthiest of the population hold the largest blocks of shares in large corporations providing even more of a return and an increase in personal wealth. There are, of course, a multitude of complications, but when large corporations provide bonuses in the form of stock options to top executives they are actually distributing a large portion of the wealth generated by a company to the highest paid employees of that company. That doesn't even begin to explore the profit sharing plans that many large companies offer top executives as an incentive to make the company more profitable.

So, while the system of income taxation and its regressive nature cannot be placed squarely on the shoulders of the current government, they can be held responsible for making it more unfair as the system moves through the years. They could have, but did not, reform the tax system in favour of the low to middle wage earner.

But then, you probably knew that, didn't you.