Opinion: A wealth tax would pay for three days of Ottawa’s spending
The NDP can salivate all it wants over the prospect of a wealth tax, but eating the rich would hardly satisfy Prime Minister Justin Trudeau’s appetite for spending. The Parliamentary Budget Officer says a wealth tax might have brought in $5.6 billion this year. But the Trudeau government is currently spending $1.8 billion per day. In any given week, it would burn through the wealth tax by Wednesday.
Although the Liberals voted against the NDP’s mid-November motion calling for a wealth tax, the threat is far from dead. After the government released its fall economic statement, NDP Leader Jagmeet Singh’s first criticism was that it had failed “to make the ultra-rich pay for the recovery.”
But debating new tax measures is failing to see the forest for the trees. This government doesn’t have a revenue problem. It has a spending problem that no amount of new taxes can fix — although that probably won’t stop Trudeau from trying. For someone who said that “the last thing Canadians need is to see a rise in taxes right now,” he sure has raised a lot of taxes. In April he raised the carbon tax. In November he announced new consumer taxes on such digital platforms as Netflix, Spotify, Airbnb and Amazon. And to ring in the New Year he raised payroll and alcohol taxes.
Though they voted against the NDP’s most recent wealth tax proposal, the Liberals seem to be waffling. When challenged by Singh on the topic of a wealth tax, Finance Minister Chrystia Freeland replied that “we all need to pay our fair share, especially in times of crisis.” You can be sure the NDP will be trying hard to convince the Liberals to include a wealth tax in their spring budget, so it’s worth re-examining the problems with it now.
The first is uncertainty. The Parliamentary Budget Officer noted that a “behavioural response could be expected,” and as a result its projections are “highly uncertain.” A Canadian wealth tax might generate $5.6 billion for the government, or it might not.