Image default
Wealth

Wealth tax necessary to address income inequality

People are demanding that the wealthy pay their fair share, Caterina Lindman writes.

I’d like to respond to Jay Goldberg’s commentary about wealth taxes being a bad idea. He argues that a wealth tax won’t work, because it will chase entrepreneurs out of the country. This will mean we’ll have reduced tax base, as we rely on wealthy people to pay income taxes.

The fact that he wrote the commentary shows concern that the Liberals may need to introduce a wealth tax in order to secure the support of the NDP in passing their spring budget.

To me, that is a hopeful possibility. Chrystia Freeland wrote a book titled “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.” It’s noteworthy that our Minister of Finance understands that wealth inequality leads to the disadvantage of everyone else. It’s also not ideal for the wealthy. Rather than feeling happy, they feel pressured and “less than,” if they don’t increase their wealth as quickly as their peers.

There are renewed calls for a global asset registry, so that global oligarchs can get reined in if they invade a country, such as what is happening now with the Russian invasion of Ukraine.

A global asset registry would make it easier for individual countries to enact a wealth tax, and if all countries agreed to impose a similar wealth tax on their citizens, then that would greatly reduce the incentive for billionaires to move to avoid the wealth tax.

Recently, Dan Price, the socially conscious CEO of Gravity Payments tweeted this question: “Can anyone explain why a billionaire who takes advantage of the system to exploit other people is called an ‘oligarch’ in Russia and a ‘job creator’ in America?”

Some examples of American billionaires who qualify for the oligarch label are the Sackler family, which helped create the opioid crisis. There’s Bill Gates, who got a lot of his wealth by creating a monopoly, and insisted, during a pandemic, that waiving of intellectual property rights on vaccines wouldn’t improve vaccine access. Jeff Bezos profits by using monopoly power, union-busting tactics, and exploiting his workers. Some Amazon drivers need to pee in bottles, having no time for a bathroom break! The Walton family’s stores have hollowed out many downtowns, decimated local manufacturing, and have exploited workers both domestically and abroad. Lastly, there’s the Koch brothers, who funded climate misinformation, dangerously delaying climate action by decades.

When Canada first introduced the income tax, it applied only to the top two per cent of wage earners, and it was instituted to help address wealth inequality. The period 1870-1910 is considered the gilded age, with the rise of newly wealthy families with names like Vanderbilt, Morgan, Ford, Carnegie, and Rockefeller. Many people made large sacrifices for the war effort, and income tax, with marginal tax rates of about 90 per cent on high salaries, was introduced to help ensure that the very rich contributed to society as well. Over time, the “Empire Struck Back,” waging campaigns to convince people that private enterprise was necessary and good, while government was incompetent and taxes were bad. These narratives pervaded our consciousness, and over the decades, high marginal tax rates started falling.

Now we are in another gilded age, and people are demanding that the wealthy pay their fair share. We are starting to become more aware of the temptations to bad behaviour and corruption that vast wealth can bring, and in light of the vast suffering this causes, we are demanding that our governments take concrete action to do something about oligarchs and plutocrats. A wealth tax is a good place to start.

Related posts

Generational wealth often comes in the form of trust funds. Does it also include grocery runs?

Dexter Elvis

Norway sovereign wealth fund backs call for Toshiba to solicit buyout offers

Dexter Elvis

Generational Wealth Society (GWS) Announces Its Project In Attempt To Reshape The Industry

Dexter Elvis