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The fact that income inequality has been rising over the last couple of decades is not exactly new.
But income inequality reaching an all-time high due to the pandemic-induced global economic slump is worth taking note of.
Today, the richest one per cent now control 25 per cent of all the wealth in Canada, according to a new research by the Canadian Centre for Policy Alternatives (CCPA), a think-tank.
The study reveals that “87 richest families” in Canada now hold a combined wealth of the bottom 12 million combined. That is 4,448 times more wealth than the average family.
To address to this extreme inequality, the CCPA has called for wealth tax on the superrich. The think-tank argues that this potential tax mop up will help the federal government make long-term public investments.
How Can The Super Rich Be Taxed?
The CAPP suggests implementing just one per cent tax on wealth of over C$20 million. This will generate a revenue of about C$10 billion in the first year.
The tax on rich will help Canada uplift millions out of poverty, assign long-term funds to important social programs such as childcare, health care and seniors’ care. It will also help the government fight for the ‘zero carbon’ climate goals.
Moderately higher taxes on super rich will add more wealth to the country’s coffers and support public.
The author of the study, Alex Hemingway, an Economist and Public Finance Policy Analyst at the CCPA, argues that his wealth tax per cent suggestions are no where near what Bernie Sanders and Elizabeth Warren recommended in the United States.
Mr Hemingway also addresses the issue of super rich fleeing Canada to avoid a wealth tax.
He argues that a “well-designed wealth tax” will not allow the rich avoid their obligations. A steep “exit tax”, as suggested by Ms Warren, Mr Sanders and UK Wealth Tax Commission, can be applied on expatriation for a fixed number of years after emigration.
