Joe Biden will arrive in Ottawa this afternoon. He and Justin Trudeau will have a lot to talk about during his short visit. Linda McQuaig hopes that Biden will offer Justin some good advice on how to tax the wealthy:
Joe Biden is proposing a number of measures, including an ambitious minimum tax on the wealthiest Americans — in the first big tax grab on the wealthy since Ronald Reagan’s election in 1980.
A fierce fight over taxing the wealthy looms in the U.S. The Democrats came close to passing a version of Biden’s minimum tax last year and could succeed if they regain control of Congress in 2024.
This trail-blazing by Biden, a centrist Democrat, should stiffen the spine of Canada’s strikingly timid “progressive” politicians. (While polls show more than 80 per cent of Canadians support a wealth tax, support is particularly strong among progressives.)
A wealth tax, aimed exclusively at Canadians with net assets above $10 million, could raise $28 billion a year — enough to seriously enhance key social welfare programs, according to the Canadian Centre for Policy Alternatives. Those trying to avoid it would face a steep exit tax.
Yet, among major parties, the NDP alone advocates a wealth tax and leader Jagmeet Singh doesn’t talk much about it. Why didn’t he insist it be part of the NDP accord with the Liberals?
The central problem is that the super-rich tie up their wealth in legal tax shelters:
That’s because their wealth is largely held in corporate stock and, unless they sell stock and trigger a capital gain, no income tax applies.
So, rather than sell stock, the superrich can finance their lavish lifestyles by borrowing from banks, which happily lend them ample funds at very low rates — an option not available to those without a fortune to serve as collateral.
Biden's solution is to impose a minimum tax:
Biden’s minimum tax would close this gaping loophole by taxing the superrich on how much their shares appreciate in value, whether cashed in or not. This could add millions — even billions — of dollars a year to the tax bill of an ultra-wealthy American. (By comparison, Canada’s luxury tax might add thousands of dollars to the tax bill of an ultra-wealthy Canadian.)
Our prime minister lacks the boldness of mild-mannered Biden, so does nothing to grab a share of the immense wealth going straight to the top as Canada’s billionaires — and there are dozens of them, including some mega-billionaires — have seen their wealth grow by an astonishing 51 per cent since the pandemic began.
Biden will have a tough time getting his plan through Congress. But he spent decades there. He knows how things work. Justin could profit from Biden's experience.
Image: CTV News