If NDP Leader Jagmeet Singh is elected Prime Minister of Canada, anyone with a net worth of more above $10 million will be subject to a new tax of one percent on every dollar over $10 million.
The NDP’s 115-page campaign commitment package includes a heavier public price tag for the wealthy. That manifesto, which Singh unveiled on Thursday, lays out what to anticipate from his party once an election campaign gets underway.
“To put it clearly, no other party can commit to investing in people without eliminating existing services or placing the burden back on people,” Singh said at the press conference.
“We’re the only ones with a plan that says it doesn’t have to be that way.”
While the Liberals, Conservatives, Bloc Quebecois and Green Party have yet to lay out their election platforms — and no election has actually been called — experts have mixed opinions about whether a wealth tax policy is one that gets the economic green light.
Singh’s proposed policy would tax anyone making over $210,000 at 35 per cent per year. It would also slap the super-rich — anyone with over $10 million in wealth — with the one per cent wealth tax on anything over that amount.
Parliamentary Budget Officer Yves Giroux crunched the numbers on the NDP’s original wealth tax pitch last year, and he found that even a wealth tax on families with net worth of over $20 million would rake in $5.6 billion in 2020-21.
A $10 million threshold would rake in even more funds for the federal coffers — and that could make a real difference, according to Randy Robinson, director of the Ontario office of the Canadian Centre for Policy Alternatives.
“It’s a good policy and we would encourage all parties to adopt it,” said Robinson.
“We have to do something about the inequality in this country. And fighting inequality is partly about taxing the very wealthy.”
However, one economist warned that wealth taxes as a whole can set a dangerous precedent in the world of taxation.
“There’s a general presumption in economic theory and practice around taxation that you don’t tax the same income twice,” said Brett House, the deputy chief economist at Scotiabank.
“Wealth has been broadly derived from income that has already been taxed once, and so the notion of a wealth tax tends to violate that principle of not taxing the same the same income a second time.”
This can be an issue of fairness, according to House.
“You make a whole set of decisions on how you’re choosing to earn money, how you’re choosing to save and invest it based on a set of tax rules,” he explained.
“And then if you change those rules such that money you already pay tax on is going to get taxed again, there is a basic fairness principle that’s being violated there.”
On top of that, House warned that wealth taxes don’t have a great global track record.
“Most jurisdictions that have tried wealth taxes over the last few decades have eliminated them because they have been very difficult to collect,” he said.
“So they have distorted incentives and not produced the revenue that was projected at the time of their implementation.”
But if the government wants to do it, they can, according to one advocate who supports a wealth tax.
“If there’s a will, there’s a way that the government can crack down on … tax avoidance measures,” said Toby Sanger, executive director of Canadians for Tax Fairness.
“And they’re increasingly doing that. A lot of the wealth at the very top is corporate shares and business interests. And that’s easily trackable.”
Sanger added that a wealth tax would help to tackle inequality — and the money collected could “be used to pay for public services to pay for the cost of the pandemic.”
In Canada, the top one per cent of families hold about 25.6 per cent of the wealth, the PBO reported last year. That’s about $3 trillion.
“If you have $10 million in wealth, you can certainly afford to pay one percent of that for the betterment of the country. I don’t think there’s any question of that,” said Robinson.
Sanger added that a wealth tax would help to tackle inequality — and the money collected could “be used to pay for public services to pay for the cost of the pandemic.”
According to the PBO, the top 1% of Canadian families own around 25.6 percent of the country’s wealth. That works up to around $3 trillion.
“If you have $10 million in fortune, you can easily afford to give 1% of it to the country’s benefit. “I don’t think there’s any doubt about it,” Robinson remarked.
Source_ globalnews.ca
