NDP Should Push Liberals for Public Hearings on Popular Wealth Tax

In a recent article, a young freelance journalist expressed the familiar lament that she and other millennials won't be able to own their own homes or have financial security.

But in a surprise twist, she went on to embrace her reduced circumstances, and suggest other millennials do likewise.

The NDP might well have sufficient leverage to push the Liberals, ever anxious to prove their chops with progressives, to at least establish a parliamentary committee--with full public hearings--to study a wealth tax.

"We need to adjust to a new reality and remove the archaic expectations from previous generations about home ownership, investing and saving," Brianna Bell wrote in The Globe and Mail. "But that doesn't mean we should feel ashamed or guilty ... it's time we admit that's OK."

Well, I'm no millennial, but I respectfully disagree. It's not OK. It's outrageous.

The fact that so many millennials--and other Canadians--have little prospect of experiencing the prosperity and financial security widely enjoyed in the early postwar years isn't due to some unknowable development.

But there's no economic law that decrees only the rich should own homes or that a tiny group at the top should be allowed to siphon off an ever larger share of what we all collectively produce.

In this week's federal election, the party platform that came closest to addressing today's grotesque inequality was the NDP's proposal for an annual net wealth tax--a modest version of the wealth taxes advocated by U.S. Senators Bernie Sanders and Elizabeth Warren.

Making the tax the centrepiece of their campaign--as an indispensable tool for financing universal programs and distributing resources more fairly--the New Democrats have established the wealth tax as a serious subject in the Canadian political debate.

Anyone scoffing at the notion Canadians take taxing the wealthy seriously should look at polls showing the incredible level of public support for a wealth tax--89 per cent, including substantial support even among Conservative voters, according to an Abacus poll last month.

Of course, the NDP ended up winning only one additional seat in the election, giving them insufficient clout to force the minority Trudeau government to introduce the tax. But the NDP might well have sufficient leverage to push the Liberals, ever anxious to prove their chops with progressives, to at least establish a parliamentary committee--with full public hearings--to study a wealth tax.

That could be more consequential than it sounds, particularly because the tax is already hugely popular.

Public hearings could raise awareness and galvanize support for taxing the ultra-rich--particularly as members of this privileged set start decrying pandemic-inflated deficits, and insisting that the only way to reduce them is to drastically cut government spending.

Against a backdrop of calls for a return to full-blown austerity, Canadians might well be interested to learn that the NDP's proposed 1 per cent tax on wealth-holdings worth more than $10 million would only affect the wealthiest 75,000 families, but would raise $17 billion a year, according to Alex Hemingway, an economist at the Canadian Centre for Policy Alternatives.

Canadians might also be curious to learn just how wealthy those 75,000 families have become, particularly since the pandemic. (Spoiler: Canadian billionaires increased their wealth by $78 billion during the pandemic.)

Another intriguing fact is that our current tax system leaves the wealthiest Canadians largely untaxed. As long as they don't sell their stockholdings, they can avoid paying income tax on this wealth, even as it increases in value. They can finance their lavish lifestyles by borrowing against it, and avoid income taxes for decades.

It turns out a wealth tax isn't about punishing the ultra-wealthy; it's simply the only way to tax their vast fortunes, which account for a significant share of Canada's wealth.

While some millennials are resigned to their diminished circumstances, others appear resentful, such as Kristen Darch, who wrote a recent article entitled "Boomers, stop bragging about your second homes."

Both these millennials, the resigned and the resentful, seem to feel there's not much they can do about their plight. Imagine if they heard about the wealth tax.