Where’s Canada’s Warren Buffett?
Posted on August 26, 2011 in Equality Policy Context
Source: Toronto Star — Authors: Larry Gordon
TheStar.com – opinion/editorialopinion
Published On Thu Aug 25 2011. Larry Gordon
“My friends and I have been coddled long enough by a billionaire-friendly Congress.”
This blunt assessment of U.S. tax policy came from renowned billionaire investor Warren Buffett in a recent New York Times article.
In a 2007 interview on NBC, he offered to bet $1 million with any of his rich peers that all of the billionaires on the Forbes 400 list were paying, on average, lower tax rates than their secretaries. None of his fellow billionaires took the bet.
Buffet is not the only wealthy American to speak up. Best-selling author Stephen King recently said he is happy to be rich since he grew up poor. But King asked why someone with his substantial income is not paying 50 per cent in taxes.
One group of high-income earners formed Patriotic Millionaires for Fiscal Strength, who declared: “We don’t need more tax cuts, and we understand that cutting our taxes will increase the deficit and the debt burden carried by other taxpayers.”
As these wealthy Americans are calling for higher and more progressive taxation, we have to ask: Where is Canada’s Warren Buffett? When will we see ultra-wealthy Canadians offering to pay higher taxes?
Bill Gates and Warren Buffett have also launched the Giving Pledge, asking fellow billionaires around the world to commit to donating at least half of their fortunes to charities. Only one of Canada’s 24 billionaires, former eBay president Jeffrey Skoll, has signed. But while charity is commendable, it is not the key issue. As Ralph Nader said, we need to move beyond charity to justice.
Those with astronomical incomes, in part made possible by the social structure funded by past generations, have a responsibility to share the cost of public goods and services for current and future generations.
Currently the top federal tax bracket in Canada kicks in at $128,800. Every dollar in taxable income over that level is taxed at 29 per cent, whether your taxable income is $130,000 or $1.3 million or $13 million.
According to the Canadian Centre for Policy Alternatives, adding two new tax brackets of 32 per cent on income over $250,000 and 35 per cent on income over $750,000 would generate about $12 billion in new revenue over the next three years. Those modest tax adjustments could fund a new national pharmacare program, or launch a national child-care program, plus allow university tuition fees to be rolled back to 1991 levels.
Those are just examples. The appropriate tax brackets and rates should emerge from a more thorough study and public debate. But the point should be clear. A more progressive tax system could fund programs that benefit virtually all households in Canada. Modest tax increases for high-income earners could be implemented with little or no effect on their lifestyles or investment decisions.
Grumbling about taxes may be a favourite pastime, but there is not a better or fairer way than democratic government to identify, prioritize and share the costs of meeting our common needs. It is foolhardy to respond to frustration with the democratic process by financially starving and dismantling government. Our challenge is to make democratic government more accountable, transparent and effective, and fund it accordingly.
There are some encouraging signs that the richest among us recognize it is time for change.
Canadian-born businessman and philanthropist Edgar Bronfman, now living in New York, wrote in a 2008 article in the Huffington Post: “Raise my taxes. And raise them now. . . . The rich now should pay disproportionately for the (economic) corrections that are needed.”
TD Bank CEO Ed Clark told a Florida audience in February 2010 that fellow CEOs attending a meeting of the Canadian Council of Chief Executives discussed the need for raising taxes to help address the deficit. “Almost every single (CEO) said raise my taxes,” according to Clark.
The Conference Board of Canada, the leading voice of corporate Canada, just issued a study on growing income disparities. This follows recent warnings from the World Economic Forum and the OECD that growing disparities are a significant threat to the global economy.
Thoughtful business leaders get it. A growing underclass, stagnated middle class and crumbling infrastructure are bad for business.
Now is the time for a Canadian Warren Buffett to step forward. Canadians are ready for an adult discussion on tax fairness. Let’s kick off that discussion with one or more of Canada’s wealthiest citizens announcing their readiness to contribute more to the public treasury.
Larry Gordon is the co-founder and coordinator of Canadians for Tax Fairness, a national advocacy organization calling for a stronger, more progressive tax system.
< http://www.thestar.com/opinion/editorialopinion/article/1045149–where-s-canada-s-warren-buffett >
Tags: ideology, standard of living, tax
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