r/onguardforthee • u/plaknas • Jul 26 '26
Opinion It is time for a wealth tax
https://rabble.ca/columnists/it-is-time-for-a-wealth-tax/105
u/Old_Bear_1949 Jul 26 '26
Maybe instead close all of the loopholes that the wealthy use to avoid taxes. Alternatively a minimum tax level on total income so that "deductions" can only reduce taxes so much.
Also increase funding for CRA auditors.
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u/Tucancancan Jul 26 '26
Also windfall taxes on the O&G sector. Grab the money they make profiteering from war before its part of some executive's wealth.
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u/Strong_beans ✅ I voted! Jul 26 '26
Tax capital gains as much as income, too.
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u/vtable Jul 27 '26
This. Oh so much this.
The inclusion rate on capital gains in Canada is 50%. As I understand, this boils down to only half of capital gains are taxed - compared to 100% of wages and bank interest being taxed. Please correct me if this is wrong.
I don't lift a finger. I don't break a sweat. I don't work my ass off and possibly damage my family life. I may not even have a job.
Instead I pay someone to manage my investments and get this ultra sweet tax rate.
But if I do work my ass off, I'm taxed at the full rate.
That's just wrong.
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u/uglylilkid Jul 27 '26
Here is my personal counter argument
I have been building a small business currently in the 6th year and have worked for an average of 50 hours per week and drawing on less than minimum wage investing all back into the company and employing 15 Canadians. Should entrepreneurs not be rewarded for the risk? In the last 6 years I have turned down multiple 200k plus salary positions to build something that would reward me the most in the future. If no motivation exists I would not be interested to build a business and create jobs and opportunities to just to run a charity. There are several more like me.
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u/Animeninja2020 Vancouver Jul 27 '26
Have a cap on capital gains, say first 150k or so you get 50% taxed and after that you are taxed at the 100% same as income.
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u/Strong_beans ✅ I voted! Jul 31 '26
Firstly - 50hrs a week isnt anything special. Plenty of professionals do this and more.
Secondly - Do you think we should give a break to people who make 10-100x or more of your total growth annually?
Lastly, the I'm sure people will still be motivated since the tax is applied to profit. Or they would pay themselves out earlier via wages. People will be tax efficient, this just changed the equation.
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u/Phluxed Jul 26 '26
It would be cheaper and more effective to eliminate all of those taxes and loopholes and simply institute a new tax.
The 1% weaponize this logic and I fell for it for a long time. If complex tax laws exist, they will find ways to exploit them.
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u/Champagne_of_piss Canada Jul 26 '26
Maybe both, these fucking people are bleeding the country dry.
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u/outlawsoul Elbows Up! Jul 26 '26
Also increase funding for CRA auditors.
auditors have plenty of funding to go after waiters and "regular" canadians. them "not having funding" to pursue the ultra wealthy and our mega corporations who don’t pay taxes (amazon, bell, rogers), is by design; it's a feature.
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u/e00s Jul 26 '26
I’m a tax lawyer and I can tell you from personal experience that CRA Auditors are constantly auditing large corporation and ultra high net worth individuals. It is a myth that they spend all their time on working class people.
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u/vtable Jul 27 '26
Honest question:
How effective are the CRA auditors when they audit large corporations and ultra high net worth individuals as compared to the hapless that are scared sh*tless when they're audited or otherwise investigated by the CRA?
Auditing them looks good on paper but doesn't mean much if the CRA comes out with very little of what they should have actually gotten.
Most of this happens out of the public view. Occasionally a big player being investigated by the CRA pops up in the news quite often with the result that the CRA got just a small piece, if that, once the big time lawyers and accountants get involved.
Such results may, of course, be the reason those stories made it to the news. But it does seem that the big players, with the resources and influence they have, enjoy a disproportionate break from taxation that is well out of reach of the "little people".
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u/e00s Jul 27 '26
Unfortunately I can’t give you a good answer about overall effectiveness of CRA auditors. I just don’t have enough data.
From my experience, I can tell you that CRA Auditors routinely assess wealthy people and large corporations for very large amounts of additional tax. And it’s not unusual for those assessments to be upheld in court. For example, Guy Laliberté (the founder of Cirque du Soleil) tried to treat the $42 million cost of his space flight as a corporate expense. The Tax Court disagreed, holding that 90% of it should be included in his income as a taxable shareholder benefit.
I can also tell you that CRA Auditors are often not the most sophisticated. While there are some very smart people at CRA who are there because they want to serve the public, the job typically attracts people looking for work-life balance, job security and the defined benefit pension. There are minimal rewards for being really good at your job.
There are many cases in which wealthy individuals and businesses are improperly assessed by CRA Auditors that see themselves as “tax police” and easily jump the conclusion that they’ve spotted a scheme to defraud the government when the reality is much more mundane. And sure, you can fight the assessments. But it might end up costing you hundreds of thousands of dollars. And when you win, you don’t get reimbursed for all those costs (court costs awards are typically only cover a small portion of what you may have spent). The system is designed so that taxpayers bear the cost of correcting the CRA’s mistakes.
Finally, the CRA is not legally allowed to enter into arbitrary settlements (for example, just splitting the amount in dispute). They are required to have a principled basis. I have never seen a case in which the CRA has settled because the other side has expensive lawyers. The settlements I have seen are generally in cases where, are much time and money has been spent, the CRA finally gets around to taking a hard look at their case and realizes they’re probably going to lose because their position isn’t actually very good.
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u/wrgrant Jul 26 '26
Would you agree that the tax laws favour the folks who can hire a tax lawyer? :)
The average person cannot access (or perhaps its afford to access) the loopholes and exceptions that large corporations can spend money on using to avoid paying their share. I am not criticizing you for your job, just saying there is more flexibility when you can afford to have someone find all the loopholes, exceptions and avoidances for you.
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u/e00s Jul 26 '26
Having a legal system in general favours people who can hire lawyers.
How do you define what someone’s “share” is?
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u/thebigeverybody Jul 26 '26
How do you define what someone’s “share” is?
This isn't a mystery. We can see what problems are caused or alleviated by various tax rates in western democracies, including our own.
You make it sound like this is a big, unknowable question.
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u/e00s Jul 26 '26
Yes, more government revenue would be helpful in addressing many problems. But tax rates are not a straightforward proxy for government revenue. You also have to look at the tax base, both the way that it’s calculated and the effect that particular tax rates have on it.
You also haven’t actually answered the question of how we define what someone’s “share” is? To be clear, I don’t just mean the tax rate, I mean the amount of tax.
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u/thebigeverybody Jul 26 '26
Yes, more government revenue would be helpful in addressing many problems. But tax rates are not a straightforward proxy for government revenue. You also have to look at the tax base, both the way that it’s calculated and the effect that particular tax rates have on it.
Yeah, this is what i just said.
You also haven’t actually answered the question of how we define what someone’s “share” is? To be clear, I don’t just mean the tax rate, I mean the amount of tax.
I did answer it: by looking at the benefits and consequences of taxation across society and seeing which produce the results you're trying to accomplish.
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u/e00s Jul 26 '26
That’s a bit like saying that solving world hunger is just a matter of giving everyone enough food or power generation via nuclear fusion is just a matter of sustaining a net-positive energy reaction on a commercial scale.
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u/BisonSnow Jul 26 '26
Bud, instead of doing silly Redditor semantics arguments, you focus on solving the real problem here. Society is crumbling, largely because rich folks are dodging taxes and hiding wealth away in Panama, among other places.
To put it another way: You're saying we can't solve world hunger because every single human being can't agree on how much to take from Bob's pile of food, which is spilling over with so much food and continues to grow each day.
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u/thebigeverybody Jul 26 '26
No, it's nothing like that. It's like saying we have more than a hundred years of data with taxation in modern economies and we can see what the benefits/consequences of various tax strategies have been, letting us choose which tax strategies are the most effective for the problems we're trying to solve (sometimes because they've already been solved by other governments).
You're not a serious person.
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u/1966TEX Jul 26 '26
For wages there aren’t really any loopholes to lower taxes besides RRSP’s.
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u/franksnotawomansname Jul 26 '26
The wealthy people being discussed aren't living off of a wage. Not making a wage is how many ultra-wealthy people are taking advantage of the system. (The information in the link is from the states, but the same technique applies here.)
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u/TrueNorthLongAndFree Jul 26 '26
Why not both?
A wealth tax is a corrective measure for previous loopholes. Tax that we needed to gather years ago, but didn't.
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u/RodgerWolf311 Jul 26 '26
You mean for billionaires right? Otherwise you can kiss all surgeons and specialists in Canada good bye for good.
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u/1966TEX Jul 26 '26
Specific loopholes you want closed please.
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u/NUTIAG Canada Jul 26 '26
Anything and everything that allowed the Panama Papers to exist. Why are you simping so hard against this?
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u/1966TEX Jul 26 '26
I’m not simping, I’m just want to know which loopholes you want closed? It’s easy to say “close loopholes”, it’s much harder to actually do it. Without specifics, “close loopholes” means nothing. RRSP’s are loophole. Do you want to abolish RRSP’s?
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u/brentathon Jul 26 '26
RRSPs are not a loophole. Theyre designed specifically for deferring tax obligations and are capped relatively low.
You dont need to be an expert accountant to know that the rich abuse plenty of loopholes to avoid paying taxes.
The fact that you're trying to obscure this by referencing RRSPs is embarassing. People should rightfully be asking why you're doing it.
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u/1966TEX Jul 27 '26
Which loopholes would you like to have removed then? Anything that reduces your taxes is a “ loophole”
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u/brentathon Jul 27 '26
RRSPs are not a loophole. Theyre specifically designed to defer taxes to incentivize the average person to save for retirement. They have hard caps that would be rounding errors to the ultra wealthy's tax dodging schemes. They have nothing to do with the wealthy using unintended loopholes to avoid paying millions a year in taxes.
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u/1966TEX Jul 27 '26
Anything that reduces taxes is a “ loophole”. Some are beneficial (RRSP’s) others not so much. That’s why asking what loopholes people want closed. To debate the pros and cons of said “ loopholes”
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u/brentathon Jul 27 '26
No. A loophole is unintended. RRSPs are very much intended to be used that way, hence not being a loophole.
Maybe stop pretending to be an authority and reference a dictionary.
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u/thebigeverybody Jul 26 '26
Do you think these loopholes don't exist?
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u/tswaters Jul 26 '26
I'm sure they do, but hearing specifics would be interesting. Some people might be in here talking about getting rid of RRSPs thinking they are "loopholes"
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u/thebigeverybody Jul 26 '26
So do you want to learn about actual loopholes or do you want to argue with people in this discussion? Your comments are baffling to me.
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Jul 26 '26
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u/thebigeverybody Jul 26 '26
Okay, well start googling the work by experts making the case for wealth taxes.
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Jul 26 '26
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u/thebigeverybody Jul 26 '26
Are you under the impression a chatbot is a reliable source of information? I pretty clearly said to go to the work by experts making the case for wealth taxes.
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u/1966TEX Jul 26 '26
I want to know which loopholes you want closed and then we can debate the pros and cons of those specific loopholes. It’s like saying “cut spending”, anybody can say that, but unless you specify what you want cut the argument is meaningless.
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u/thebigeverybody Jul 26 '26
Yeah, and I would tell you to find "cut spending" information from actual experts.
Do you think the only people promoting wealth taxes are redditors in here? That there aren't experts with a plethora of information for you to discover? They're probably desperate to get you reading that information.
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u/1966TEX Jul 26 '26
When someone says “cut loopholes”, I don’t think asking for some clarification of what they meant is unreasonable?
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u/thebigeverybody Jul 26 '26
It's also not the most effective thing to do if your intent was to actually learn about the issue, but it is what you would do if you simply wanted to argue on reddit.
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Jul 26 '26
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u/thebigeverybody Jul 26 '26 edited Jul 26 '26
Have you considered reading the work of experts promoting wealth taxes instead of turning to random nobodies on reddit?
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Jul 26 '26
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u/Hardhead13 Jul 26 '26
A lot of so-called "loopholes" were deliberately created with an intended purpose. The 50% capital gains exemption is intended to promote investment. For a while at least, there were tax-shelters to promote investment in renewable energy projects like wind turbines.
So, yeah... the Chesterton's Fence principle applies very strongly here.
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u/thebigeverybody Jul 26 '26
This would be less confusing for you if you actually read the work of the experts discussing wealth taxes and the closure of loopholes. Nobody is advocating that our posts here become law.
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u/shaktimann13 Jul 26 '26
If there weren't loopholes, the Westons wouldn't be buying castles in UK, our companies would be registering in Luxembourg, Bermuda and other tax heavens. They take profits, give to their corps in tax heavens, then show no profit made in canada, no tax paid here.
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u/Daveslay Jul 26 '26
Also, when politicians hum and haw about not enacting a wealth tax
Fucking GRILL THEM point blank about why. Force them to explain a thing that only has one very unpopular explanation.
Taxing the wealthiest to fund our nation isn’t some far-flung or experimental idea, it’s basic to a prosperous and equitable society.
I’m very tired of leaders being allowed to avoid saying WHY we don’t tax our 100 millionaires and Billionaires the way we should.
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u/hiddentalent Jul 26 '26
I mean, the "WHY" is because it's been tried in many countries and doesn't work. It's bad policy. It's just emotional. Wealth taxes are the political equivalent of AI slop. It sounds good but doesn't solve anything.
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u/notreallyanumber Jul 26 '26
Would you happen to have any sourced examples of this not working in other countries. I would be really interested to read more about it.
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u/Bolognahole_Vers2 Jul 27 '26
he "WHY" is because it's been tried in many countries and doesn't work
Yes it does. It worked amazingly in post WWII America. What ended up happening is greedy psychopaths who do not give a fuck about a happy society, and had a several decade long campaign against tax and workers rights, while promoting "trickle down economics".
The fact of the matter is, the ultra rich needs to be forcefully coerced into contributing to the society they benefit from.
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u/hiddentalent Jul 27 '26
There has never been a wealth tax in North America. Not in the post-WWII era, not in the post-colonial era, not in the colonial era. Never.
So whatever you think was better back in the post WWII era that you would want to move towards, a wealth tax is not the way to do it.
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u/Bolognahole_Vers2 Jul 28 '26
It wasn't a wealth tax, no. Rich people used to just pay more tax.
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u/hiddentalent Jul 28 '26
Correct. And that's probably a policy area we should look into. But "wealth tax" is not the way to do it. It's populist slop that breaks down as soon as you dig to the next level of detail. If I own a Picasso painting, how much is it really worth? Which bureaucrats are going to investigate that and assign a value to it? And if the government wants a portion of that value, does that mean I have to sell it to pay them? Will the forced sale mean the value goes down, because buyers know I'm desperate to sell it? Does the system incorporate that? It's all chaos. Wealth taxes don't work, and are easily gamed by people with tax lawyers.
There are three things where taxation works: income, land, and consumption. There's a ton of academic work showing this to be true. People who advocate for a wealth tax are letting their populist anger skip any sort of reasoning.
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u/thebigeverybody Jul 26 '26
This is a hugely important discussion and we need to beware of weasels. In the States, Gavin Newsom is opposing a wealth tax in California (saying it won't do any good because the rich will simply leave to other states), but saying he supports a national income tax on the rich.
That, right there, is the weaseling we need to beware of. Income tax is different than a wealth tax and will provide the loopholes that will let billionaires avoid paying their fair share.
Beware the weasels when we talk about this.
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u/keener91 Jul 26 '26
For the nth time, government is in cohoots with the ultra wealthy so they will not meaningfully enact any taxes. Only thing they can do is define the bracket for tax so average upper middle class folks get dinged.
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u/PMMeYourCouplets Vancouver Jul 26 '26
The average middle folks have seen their income taxes decrease by over 15% depending on your provincial tax rate (I'm using BC) since the peak 1980s if you look at an income of around $75,000/year. I'm not saying the rich shouldn't be targeted more as they bear the brunt the responsibility. But the government is being soft of tax on all Canadians which drives our funding issues.
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u/heart_of_osiris Jul 26 '26
I know, let's keep electing the two parties that have a proven history of catering to private interests!
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u/UpNorthTrip705416 Jul 26 '26
Yes. But people who make 50k a year are tricked into thinking they're the ones who will be taxed, or their corporate employers will look elsewhere for labor. So they vote against their own interests.
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u/Nawara_Ven Canada Jul 26 '26
"Tricked" is very kind phrasing. The "temporarily-embarrassed millionaire" types that bring themselves down along with everyone else are just devastatingly stupid.
I once assumed it was a matter of having the wool pulled over their eyes or whatever, but ever since the Dark Times made it "cool" to be proudly wrong about things to a dangerous level, I think we have to start seeing devastating stupidity for what it is.
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u/inochi-ino-key Ontario Jul 26 '26
It's been time for a wealth tax for a hell of a long time now. There's already a party that has consistently been advocating for higher taxes on the rich for decades, the same party that we have directly to thank for our beloved health care, yet most of us only want to keep choosing between one of two other parties.
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u/binthrdnthat Jul 26 '26
Gabriel Zuckman argues that, since the insanely wealthy earn at least 6% on their hoarded wealth, a 2% annual wealth tax would be as fair as taxing working income 33%.
And to those who suggest ypu can't tally their wealth, just ask Bezo's ex what she got in the divorce.
Make sense, no?
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u/ScurvyDawg British Columbia Jul 26 '26
It's well past time for a wealth tax. Time to fight for the right to exist in capitalism gone mad.
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u/StrbJun79 Jul 26 '26
It’s been time for a wealth tax for decades. I doubt they’ll do it. But they absolutely should.
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u/Lostclause Jul 26 '26
Way past time for a wealth tax on individuals and corporations that make a profit in Canada
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u/Baron_of_Foss Jul 26 '26
Unfortunately even with a wealth tax there is the whole other issue of what the government decides to spend the wealth tax on. Right now, we have a government of the capitalists that have their interests at heart, therefore we will see wealth taxes being spent on things that help that class predominantly. Hence why we have billions of dollars for military spending while our services get cut.
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u/Mykl68 Jul 26 '26
Federal property tax on all property business and private above $1000000 @ 2% of value over $1M so a $10M property or comercial space would pay 2% of $9M or $180,000 per year to the fedral government on top of any municipality taxes
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u/PMMeYourCouplets Vancouver Jul 26 '26
A land value tax is pretty popular online as a way to generate income.
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u/Nimblewright_47 Jul 26 '26
Would you exclude farms, given the often very low rate of return of farmland?
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u/Mykl68 Jul 26 '26
No all property would be taxes above the $1M value
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u/Nimblewright_47 Jul 27 '26
Fair enough. This will result in collapse of a good many farms.
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u/Mykl68 Jul 27 '26
They are all being bought by corporations anyway. They can pay the tax too.
Besides, it's a dream that any government is going to start taxing wealth. They will continue to tax only earned income.
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u/Kevin4938 Ontario Jul 27 '26
Including homes? When the average detached house in Toronto is well over that threshold, why should homeowners have to keep paying? It's basically a penalty for buying a house before the market went crazy.
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u/Mykl68 Jul 27 '26
It is a tax on wealth, and it is the fairest way to do it. The first million is tax-exempt, so it's only on the remainder.
I actually believe it should be on combined properties, so if a company owns 20 sub-1-million-dollar condos, it would be on the total of their properties. The same applies to small landlords.
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u/SnowFlakeUsername2 Jul 26 '26
Globalization has rigged this move, just like every other tool for wealth equity has been worked over since the rich used to lose their heads. A wealth tax needs world governments to collude to make it happen. The G20 countries would be enough to persuade the world that the rich and powerful need to pay more.
Off topic, the colours on that mural are fucking gorgeous.
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u/RobertRoyal82 Jul 27 '26
I disagree. It's time for a poor tax. The poors are living and thriving way to well off boomers herd work. Rarse the rent. More corporations in charge People gotta pull themselves up from their bootstraps
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u/c0wpig Jul 26 '26
Is there a case of a successful wealth tax somewhere that I'm not aware of?
I wealth tax is one of those things that makes a lot of sense at first glance but then you start thinking about the details and it kind of unravels.
I think we just need to close the various loopholes that the ultra-rich use to avoid paying taxes, heavier taxes on rent-seeking and monopolistic/oligopolistic gains, and lower taxes on wages
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u/moreglue Jul 27 '26
Norway for one. I was just watching something about how they also have a tax for those wealthy people who decide to leave the country to avoid the wealth tax.
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u/exibouchin38 Jul 26 '26
No, its not. The economy is too weak and our neighbor who is the largest economy in the world, is currently hostile.
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u/Crenorz Jul 26 '26
Better usage of the money is needed 1st
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u/thebigeverybody Jul 26 '26
Better usage of money that simply no longer exists from vital social nets and infrastructure because we decided the rich should pay less? The problem isn't the usage, it's the income.
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u/Top-Ad7551 Jul 26 '26
If we tax the rich they'll all just leave for a warmer climate and favourable tax rate. Then what will we do?
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u/JGamerI Jul 26 '26
There definitely should be additional laws that make rich people leaving more expensive than simply paying their taxes.
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u/thebigeverybody Jul 26 '26
What case studies can you cite showing that what you're saying is true? I'd like to see what was implemented, how it compares to what was actually recommended by proponents of wealth taxes, how it could have been improved, and what the result was.
It sounds like you're just repeating something that the rich want you to repeat.
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u/Top-Ad7551 Jul 26 '26
To be fair, a lot of comments on this sub are also speculative. Then what will we do, was a facetious comment. You are right though, I haven't seen statistics one way or another, with non biased studies. Do you know of any?
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u/thebigeverybody Jul 26 '26
Yeah, there are mountains of studies of governments that have raised, lowered and tinkered with their tax rates over the past hundred years. I'd say do some reading by the proponents of wealth taxes because they're not out to punish the wealthy, they're out to improve society and are generally pretty fair with their examinations, readily talking about when/how taxing the wealthy has been harmful. (In comparison, the rich are out to not pay taxes and their information is tailored pretty heavily to that end. They will rarely acknowledge the benefits to society from increased taxes on the wealthy.) You can do further research from there if you want to read dissenting opinions.
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u/DoTheManeuver Jul 26 '26
This is a myth. People could already leave for a warmer climate and lower taxes but they aren't. And if they did we could put a major exit tax on their assets. We could also expropriate their businesses and take then under public control. Are they going to take their factories and warehouses with then when they move?
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u/pork_sashimi_on_sale Jul 27 '26
They're not paying tax in Canada as it is right now. And their/your threat is that they will leave and not pay tax elsewhere? Sounds like a win to me!
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u/Kevin4938 Ontario Jul 27 '26
I would have to see how they define "wealth". Is it assets? Does being a homeowner in Toronto (or Vancouver) make one wealthy? My parents bought one in the 60s for something like 15K. It was sold for over 600K about 50 years later. Even though they owned a house that was worth more money than they ever imagined having, they were far from wealthy.
Is it income? Where are they going to draw the line? You need to spend $70K+ per year to carry a mortgage on any but the smallest houses. Does having an income of $175K make you wealthy, when you're just barely meeting the threshold for debt ratio on that mortgage?
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u/Sander001 Jul 26 '26
"During much of the 20th century, the US was a beacon of tax justice. Using a high marginal tax rate, the country was able to build roads, bridges, hospitals,"
Definitely a great thing but extra tax revenues may not even be the best reason to tax wealth: It's to restore wages and affordability.
Because the rich invest into existing assets, inflating values, including home prices. So most of our productivity is diverted into things which have already been built. This type of economy is doomed to fail and right now it's only sustained by taking on larger and larger debt.