Billionaires — To envy or raid for our benefit?
Published On Fri Sep 10 2010. By James Daw, Personal Finance Columnist
Billionaires, millionaires and anyone earning more than $300,000 a year should be fair game for much higher taxes, argue two staunch opponents of gross inequality.
Linda McQuaig, a prolific author and Toronto Star columnist, has worked with leading law professor Neil Brooks to write a new book called The Trouble With Billionaires.
It’s not so much about billionaires — and less about the 55 or so in Canada — than it is about the ethically challenged and politically coddled elite of the United States.
They do take a whack at gold magnate Peter Munk and others for using their wealth and charitable tax credits to get their names on university campuses ahead of intellectual giants and the champion of public medicine in Canada.
They question the light touch tax officials show toward the rich, including former prime minister Brian Mulroney’s stash of cash from a suspected bribemeister.
They also question how much former finance minister Michael Wilson knew about his Swiss counterparts coming into his former territory at UBS Canada to lure wealthy clients to place billions in secret offshore accounts.
But the authors finished writing their book from Penquin before the outcome of a classic battle between public good and private excess: The near billion-dollar deal to wrest control of auto parts giant Magna International Inc. from founder Frank Stronach.
For them, billionaires are merely an illustration of the growing heights of income disparity. Their key argument is that the well-to-do, of various degrees, would never have had as much without the rest of us. So why not take it back, and put their tax returns on public display.
McQuaig and Brooks contend the nation’s high flyers would still strive as hard for fun and country if governments claimed a majority interest in the portion of their income and estates they regard as excessive.
Then, with the rich paying more toward public programs, Canada could become a happier place, with taller, healthier and better-educated citizens, they argue.
More of us would become like the towering and egalitarian Dutch than the shunned and stunted poor of America, where society is sharply divided between those with impossible home-ownership dreams and those permitted to profit from those dreams by tricking the world.
Their poster child for tolerance of higher taxes for the ultra rich is J.K. Rowling, the billionaire British novelist who sent Harry Potter to school to cast magical spells.
Despite her sudden wealth, Rowling has retained her attachment to the United Kingdom, where the top tax rate is 50 per cent on taxable income in excess of about $240,000 a year, compared with 46.41 per cent starting at $127,000 here in Ontario.
“I wanted my children to grow up where I grew up, to have proper roots … in a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles,” they quote Rowling as having said.
But McQuaig and Brooks propose more than Britain’s 50/50 approach to taxing the rich: A 60 per cent tax on income greater than $300,000 a year; then 70 per cent (less than the top rate in post-war Canada) starting at $2.5 million and on estates of more than $50 million.
Money from the estate tax could be used, they suggest, to give every child a $16,000 trust fund at age 16, to help pay for education and training.
Personally, I think some of their logic is weak, and the potential benefit to the rest of us is exaggerated. Such high tax rates would require every developed nation to do more than help track down secret deposits.
But, for a taste of the splendidly written book, see the Insight section of the Sunday Star tomorrow. And for a chance to see picketers in really nice suits, hear them at The Word On The Street book festival at Queen’s Park on Sept. 26.
< http://www.thestar.com/business/article/859559–daw-billionaires-to-envy-or-raid-for-our-benefit >