It’s 2018 and time for tax reform focused on fairness

Posted on in Equality Debates

TheStar.com – Opinion/Contributors – Increasingly, Canada is divided into two worlds — the wealthy and the struggling. Prime Minister Trudeau owes it to Canadians to end tax avoidance by the rich and bring in tax reforms this year that focus on fairness, writes Jagmeet Singh.
Jan. 2, 2018.   By

Following the holidays, a growing number of Canadians face the New Year worried about how they will make ends meet. Inequality is on the rise in Canada and those at the top have no idea what life is like for most Canadian families.

A report published Monday by the Canadian Centre for Policy Alternatives revealed that by 11 a.m. on Jan. 2, Canada’s top-paid CEOs have already earned what the average Canadian earns in a year. In other words, the top-paid Canadian CEOs earn more in a day and a half than millions of hard-working Canadians will take home in a full year.

The wages of CEOs have increased by an incredible 8 per cent over the past year, while the wage growth of most Canadians languished at half of 1 per cent. For the first time, the average for Canada’s top-paid CEO’s is more than 200 times that of the average Canadian.

The top 20 per cent of Canadians in 2016 owned 67 per cent of all wealth or net worth in Canada, while the bottom 40 per cent collectively owned just 2.3 per cent of all net worth. And the two richest people in Canada have more wealth than 11 million Canadians, combined.

Increasingly, we’re seeing two worlds in Canada. The world for most Canadians is increasingly unaffordable, involves more precarious work, and is a harder place in which to get by. The second world is an exclusive club for the wealthy and well-connected who get special access and are exempt from rules the rest of us play by.

This is both unfair and damaging to the country’s economy.

It will take strong political will to reverse the trend of rising inequality, which began decades ago and has continued under both Conservative and Liberal governments.

Tax avoidance and evasion by the rich undermine democracy by starving social programs and public services. They also send a message to ordinary citizens that the rules of the economic game are rigged against them.

It’s 2018 and it’s past time for Prime Minister Justin Trudeau to change this.

The prime minister controls one of the most important levers to tackle this problem — he can bring in progressive tax reform. In fact, Trudeau promised to do just that in the 2015 federal election when he committed to “conduct a review of all tax expenditures to target loopholes that particularly benefit the top 1 per cent.”

But that review took place behind closed doors, with no outcome to date other than proposed changes to the rules governing taxation of small private corporations.

Two years later, the time for review and tinkering is over. Canadians deserve comprehensive, progressive tax reform focused on fairness now.

The prime minister can take concrete steps in this year’s budget to ensure the richest Canadians contribute their fair share.

Mr. Trudeau, will you commit in the next budget to tackling unfair tax rules, specifically through eliminating the preferential treatment of stock options and increasing the inclusion rate for capital gains for CEOs? In short, will you commit to bringing some fairness back into the tax treatment of top business executives, billionaire investors and the wealthiest in Canada?

It’s time to put an end to the special set of rules that exclusively benefit the affluent and well-connected. Only the richest Canadians are even able to access these measures in our tax system and the result is an impoverishing of the public services we all rely on.

If we fixed the imbalance in these areas by ending the portions that go to the super rich, we could recover in excess of $3.5 billion in lost government revenue.

This amount is not just measured in terms of revenue, but more importantly in terms of the damage done to our critical social programs.

Just imagine what $3.5 billion in revenue could do for water treatment facilities in Indigenous communities. Or how far $3.5 billion would go toward setting up a pharmacare program, bringing in a universal child care system, or to bolstering the GIS for seniors. Further progressive tax reform measures would assist even further.

It is time to reverse the trend toward ever-increasing inequality that is hurting too many Canadians. To do so, progressive tax reform must be at the centre of the next federal budget.

Let me assure you that New Democrats will support a bold agenda to tackle inequality, even though it is certain to encounter strong opposition from vested interests. The question is whether the prime minister has the political courage to act.

Jagmeet Singh is the leader of the New Democratic Party of Canada.

https://www.thestar.com/opinion/contributors/2018/01/02/its-2018-and-time-for-tax-reform-focused-on-fairness.html

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This entry was posted on Wednesday, January 3rd, 2018 at 2:00 pm and is filed under Equality Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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