A recent release of secret files of the U.S. Internal Revenue Service (IRS) revealed that some of the wealthiest billionaires in the world — including Jeff Bezos, Elon Musk, Michael Bloomberg and George Soros — hadn’t paid a cent in income tax in some years, and paid very low rates of tax in general. The files indicated that the wealthiest 25 American billionaires paid an average income tax rate that worked out to just 3.4% of their increase in wealth in the five years from 2014 to 2018. That’s far less than the average American or Canadian paid in income tax as a share of their income or their increase in wealth. The tax system in both countries is obviously broken, and it could never really pretend to be progressive in its current form.
According to most tax experts, there’s little doubt that Canada’s ultra-wealthy and billionaires also pay very low rates of tax on their income and wealth. Our tax system has many similarities with the U.S., similar ways to dodge taxes, and Canada is the only major country without some form of wealth tax. And we’re talking big bucks! As the non-profit Canadians for Tax Fairness (C4TF) notes: “Canada’s 1% now control over a quarter of the country’s wealth — over C$3 trillion.” The existing massive inequality in wealth grew even bigger during the pandemic, as corporations and wealthy individuals prospered while many Canadians struggled to simply maintain their standard of living. Canadian corporations received taxpayer-funded government subsidies while paying out billions to their shareholders.
A recent book by Jonathan Gauvin and Angella MacEwen, entitled “Share the Wealth”, highlights the injustices found in the current tax system. The book is highly recommended. It points out that more and more countries are applying new successful taxes on the uber-rich. Even the Biden administration is promoting higher corporate taxes. The concept of a wealth tax on the richest of the rich is increasingly becoming accepted by Americans and Canadians. In addition, most of us would like to see the current tax loopholes for individuals and corporations closed. This alone would bring in billions dollars into the federal treasury, and could be used to help fund such things as much needed infrastructure improvements, national child care initiatives and pharmacare programs.
All three major federal parties have expressed their willingness to introduce tax fairness measures if elected. Since its establishment in 2011, the C4TF has brought forward issues like taxing the wealthiest 1%, closing tax loopholes, tackling tax havens, having corporations pay their fair share, and taxing digital giants in Canada. All the necessary rationale for change exists. Isn’t it about time that whichever party forms the next government, it will put the issue of tax fairness front and centre in parliament. Let’s hopefully see the next government ‘walk the talk’ in support of the needed changes when it comes to this important issue!
FROLITICKS 