It’s been a year since the devastation of the economy for working Canadians first began. For all the rhetoric that ‘we’re all in this together,’ we weren’t before this pandemic and it’s hard to believe we are now.
We have been told the promise of Canada is an equitable society where we all have the opportunity to live full and free lives. A critical component of that promise is that with enough hard work, ingenuity, and a little luck, we can stash enough wealth away to live comfortably in our twilight years, and if we’re lucky, even enjoy some of life’s luxuries.
For the most part, that promise proved to be true in the decades following the end of the Second World War. Canadians enjoyed economic prosperity the likes of which we’d never seen. The leadership of visionaries like Tommy Douglas pushed the social safety net forward in ways that previous generations could barely imagine, forging the path for single payer healthcare, closing the gap between the wealthiest and poorest among us, and providing some of the highest living standards in the world. Then, something changed.
The neoliberal austerity policies of the Reagan-Thatcher-Mulroney era arrived with a new worldview. One that was rooted in an ideology of rugged individualism and the notion that what is good for business is good for us all.
Not all at once, but rather little by little, the march of economic progress for working Canadians slowed to a crawl, came to a halt, and then began to reverse. The change was slow at first and then began throttling forward at an ever increasing pace. As a result, the gains that had been made in the post-war years to close the gap between the wealthy and the poor stopped contracting and began to widen.
Today, the gap has become a gulch with nearly 70 percent of all wealth held by the top 20 percent of us—and that was before the pandemic and the ensuing economic crisis that has had us in its grasp ever since.
The only way to solve the problems created by bad policy, is through good policy: policy that reflects the needs of society and acts decisively to remedy them by doing the most benefit to the most people in the shortest amount of time.
In the case of reducing wealth inequality, Canadians across the political spectrum are overwhelmingly in agreement on taxing the wealth of the ultra-rich. The Liberal Party even made overtures to public opinion in their Throne Speech last fall, with vague promises to find new ways to tax wealth while falling short of mentioning any concrete actions and glaringly omitting any timelines for action.
For what it’s worth, the NDP gave them a chance to put that commitment to the test with the tepid proposal of a one percent flat-tax on wealth over $20 million in opposition day legislation. The Liberals notably voted against the measure, calling into question the seriousness of their commitment to take action on the issue. The question is not if we should tax the fortunes of the ultra-wealthy, but rather how much is enough.
Thomas Piketty, the French economist and global authority on wealth inequality suggests that in order to solve the problem, we should tax those with wealth over $1 billion at 90 percent. Even the Bernie Sanders progressive wealth tax plan, the most aggressive wealth tax ever seriously proposed, doesn’t come close, maxing out at just eight percent for wealth over $10 billion.
It may not solve the challenges of wealth inequality in as short a timeframe as Piketty’s proposal, but when modified and applied to the Canadian context by the team at the Centre for Canadian Progress, the Sanders wealth tax rates would provide $21.6 billion in year one, in contrast with the pittance of $2.1 billion the NDP’s current policy would net, a significant difference in attacking inequality head on and beginning the process of bringing some sense of sanity to the lopsided wealth in this country.
The proposal would affect only the top one quarter of one percent of Canadian households, affecting just 98,000 of the most fabulously wealthy Canadians. Beginning with a one percent tax on wealth over $7.5 million, the rate would max out at eight percent for the handful of Canadians who control mega-wealth of over $5 billion, and ensure that the wealthiest among us pay their fair share in accordance with the size of their fortunes.
The fabric of our society is dependent on some semblance of equity and the issue of wealth inequality has been the demise of monarchs and empires. A progressive wealth tax may be the only policy that can prevent Canadian society from completely unraveling. Is the danger of doing nothing to appease the tiny fraction of Canadians with extreme wealth worth the risk? We cannot afford to find out.
Joe Roberts is a veteran political strategist in both the US and Canada, Executive Director of the Centre for Canadian Progress, Co-Host of the political podcast New Left Radio, and Managing Director at Jewish Currents Magazine. Follow him on Twitter @Joe_Roberts01.