How a wealth tax could help Canadians


Jagmeet Singh reaches out to delegates as he leaves an NDP convention stage with Gurkiran Kaur on Feb. 17, 2018 in Ottawa. File photo by Alex Tétreault

Canada’s NDP has proposed a one per cent tax on wealth over $20 million as part of its election platform. The party doesn’t include much detail yet but estimates it could generate several billion dollars a year.

Pundits have been quick to pounce on a wealth tax as too extreme, difficult or costly. A National Post column last month asked: “What is the problem to which creating a wealth tax is a solution?”

Growing inequality is the problem.

The richest families in Canada are now more than 4,400 times wealthier than the average family, according to a study by the Canadian Centre for Policy Alternatives (CCPA).

This widening gap has gone hand-in-hand with declining social and economic mobility. The CCPA found that family dynasties are more likely to keep their money in the family than they were two decades ago thanks to light taxes and loopholes that primarily benefit the wealthy, while Statistics Canada recently reported that family income mobility has declined since the 1980s.

The idea of a wealth tax sparked more interest earlier this year after Democratic leadership contender and U.S. Sen. Elizabeth Warren proposed a two per cent tax on those with more than US$50 million in assets, with the rate rising to three per cent for fortunes over US$1 billion.

“The Ultra-Millionaire Tax” would target all assets, from closely held businesses to residences outside the country. Warren estimates it would bring in US$2.7 trillion over a decade ⁠— revenue she would use to reverse staggering inequality in the country through measures such as universal child care and free tuition at public colleges.

Rising disparity is a global problem, and it’s not just progressive politicians who are pointing out the need for increased taxes on wealth.

Both the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) — hardly left-wing organizations — have highlighted growing inequality of wealth as a problem and suggested that countries increase taxes on wealth and capital.

Some argue that wealth taxes would lead to a mass exodus of wealthy entrepreneurs, hurting Canadian investment. Yet, an OECD study found that wealth taxes led to little in the way of real declines in investment and aren’t necessarily bad for the economy. MORE

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NDP links environment with economic justice to head off Green challenge

Jagmeet Singh. Photo: Jagmeet Singh/Facebook

The NDP has released its full set of election campaign commitments early, in the hope that voters will take the time to absorb them, and that those policy proposals will become a key part of the national conversation leading up to the October vote.

The media took notice — at least for a day or two.

Some reporters and commentators focused on the big differences between Jagmeet Singh’s ambitious proposals and Tom Mulcair’s constrained and modest platform last time around. In 2015, the party tied its own hands with a base promise to achieve a balanced budget within a first mandate.

Other commentators took note of the progressive hue of the 2019 platform, and decreed that the NDP has gone back to, as a National Post headline put it, “interventionism, protectionism and fiscal insanity.”

In fact, the NDP’s platform is not radical.

On the revenue side, the 2019 NDP calls for restoration of the corporate tax to its former 2010 rate, and for a modest increase in taxes on the highest income earners, notably in the form of a wealth tax on total assets of over $20 million. It also proposes an increase from 50 to 75 per cent on the taxable amount of capital gains.

In terms of programs, Jagmeet Singh’s NDP emphasizes affordability.

Its platform pledges to deliver: truly universal healthcare, which would include eye care, mental health and, of course, prescription drugs; a half million units of affordable housing over 10 years; expanded employment insurance; a cap on cell phone fees; and measures to increase the number of child care spaces while reducing their cost for parents.

The environment also occupies a big place in the NDP’s plans.

The party pledges to eliminate oil and gas subsidies and invest that money in renewables. It will also invest in low carbon transportation, especially public transit. And it even promises to work with jurisdictions that want it to provide free public transit.

These and other key promises all fall within the mainstream policy framework of most developed countries, with the notable exception of the United States. The NDP’s policy proposals are designed to humanize and rationalize Canada’s private enterprise, market-based economy, not limit or undermine it. MORE

POLL: Over two-thirds of Canadians back a wealth tax

Rising inequality is often ignored by neoliberal politicians focusing on profit and growth while social concerns are often not on the political radar.

Support is steady across demographic, regional and even party lines

Image result for ricochet POLL: Over two-thirds of Canadians back a wealth tax

A new poll conducted by Abacus Data on behalf of advocacy group North 99, and provided exclusively to Ricochet Media, shows that the newfound appetite for a wealth tax in the United States has spread north of the border.

A wealth tax, championed by U.S. politicians like Elizabeth Warren, Bernie Sanders and Alexandria Ocasio-Cortez, would levy an additional tax on the assets of the super rich. Unlike policies such as a new top marginal tax rate that have also been floated by Ocasio-Cortez and others, a wealth tax would apply not only to income but to all assets.

67 per cent of all Canadians support or somewhat support a wealth tax

The poll of 2,000 Canadians was weighted to reflect census data and tested the proposal of a two per cent wealth tax on individuals with assets over $50 million, payable annually.

It found a staggering 67 per cent of all Canadians support or somewhat support the proposal. Only 14 per cent were opposed or somewhat opposed, while 17 per cent were unsure or felt they didn’t have enough information to respond.

“There is a real appetite, a real demand among voters across the political spectrum for bold, progressive policies”

What we see here,” explained Taylor Scollon, co-director of North 99, “is that policies that politicians are not necessarily talking about, that we don’t hear a lot about, to address rising inequality and lack of opportunity for workers, for the middle class, are quite popular. But they are just not present in the discourse right now.

These ideas are being talked about a lot more in the U.S., Elizabeth Warren has put out a similar proposal, but these are policies that Canadians support too.” MORE

Outrageous Fortune: Documenting Canada’s Wealth Gap

Bill Gates Gets Why People Are Doubting Billionaires—And He Has A Defense (Even For Mark Zuckerberg)

Simon Dawson / Bloomberg

“I think it’s fascinating that for the first time in my life people are saying, ‘Okay, should you have billionaires?’ ‘Should you have a wealth tax?’ I think it’s a fine discussion.”

It’s a discussion that took place yesterday just a block from Trump Tower, home of America’s first-ever billionaire president. “My opinion is that there should be an estate tax and maybe even higher than we have today. Among The Forbes 400, I don’t think we’d get a majority—Warren [Buffett] and I are sort of against interest on that,” says Gates. “So I think there’s plenty of debate about how capital should be taxed, how estates should be taxed.”

“Philanthropy is there because the government is not very innovative, doesn’t try risky things and particularly people with a private-sector background—in terms of measurement, picking great teams of people to try out new approaches,” says Gates. “Philanthropy does that.”

But as for the kind of disincentivizing economics lamented by the Beatles in “Taxman” and increasingly championed by America’s far left, Gates remains clear: “The idea that there shouldn’t be billionaires—I’m afraid if you really implemented something like that, that the amount you would gain would be much less than the amount you would lose.”  MORE