Billionaires pay almost no taxes on their inordinate wealth.
Imagine what a 15-20 per cent wealth tax could do for affordable housing, public transit, and climate action.
In our latest video, Linda McQuaig makes the case for taxing billionaires out of existence.
As you know, a billionaire is someone who’s really rich. But do you know just how rich? Consider this. Imagine you received a dollar every second. After a minute, you’d have $60. After an hour, you’d have $3,600. Not bad.
Now imagine if you kept receiving money at that spectacular rate all day and all night. In 12 days, you’d be a millionaire. But to become a billionaire, you’d have to keep receiving money at that rate for 32 years.
Canada’s richest person, David Thomson, heir to the Thomson media fortune, has $53 billion. So at that same rate—a dollar every second, all day and all night—how long would it take Thomson to count his money? 1,680 years. So if David Thomson had started counting his fortune back in 330 A.D., he’d just be finishing up now.
It’s hard to believe, but billionaires pay almost no tax on their fortunes. Unlike the rest of us, they can avoid income tax entirely. Their wealth is typically in huge stock holdings, which grow in value every year. If they were to sell those stocks, they’d have to pay income tax on the gain.
But instead, billionaires borrow against their own wealth. That means they use their wealth as collateral to get bank loans that allow them to live as lavishly as they want without triggering any tax. That’s why we need a wealth tax.
NDP Leader Jagmeet Singh has proposed a 1 per cent annual tax on fortunes over $10 million. People with less than that wouldn’t be affected at all. Even such a small wealth tax of 1 per cent a year could raise $10 billion a year, enough to fund a lot of affordable housing, public transit and climate action.
There’s always been a strong case for a wealth tax, but the pandemic has made it even stronger. As ordinary workers have suffered, the fortunes of Canada’s billionaires have soared by more than $80 billion. When COVID struckm the Weston family—Canada’s third-richest—announced they were giving their frontline employees at Loblaws an extra $2 an hour in pandemic pay.
Newspapers cast the action as a generous show of solidarity in the face of the deadly scourge. But several months later, as the pandemic raged on, the family’s generosity was exhausted. The Westons terminated the extra pay. Meanwhile, Loblaws profits soared, adding $4.6 billion to the family’s wealth in just the first year of the pandemic.
That exceptional good fortune must have softened the hearts of the Westons. While not reinstating pandemic pay, they gave their employees a one-time appreciation bonus, awarding a part-time Loblaws cashier an extra $25 for the year. And it wasn’t even Christmas.
The trouble with billionaires isn’t just that they hoard so much money, but that all that wealth makes them immensely powerful. They’ve become so powerful that they effectively have a veto over our democratic choices. What’s blocking action on the climate crisis, for instance, is the most powerful set of billionaire interests on Earth — Big Oil.
That power was illustrated when Justin Trudeau spent $13 billion of Canadian taxpayer money to bail out the struggling Trans Mountain pipeline project in 2018. By buying that pipeline, the Trudeau government is enabling Big Oil to massively expand their export of the oil sands, a terrible setback for climate action.
A wealth tax would be a vital tool in curbing the power of billionaires. While the 1 per cent wealth tax proposed by Jagmeet Singh would be a good start, we’ll need something much more robust. We need something on the scale of 15 or 20 per cent targeted at the very top to actually reduce fortunes and ultimately eliminate billionaires.
About a century ago, the US Supreme Court Justice, Louis Brandeis made an insightful prediction: “We can have democracy in this country, or we can have great wealth concentrated in the hands of the few. But we can’t have both.”
His prediction could be updated today to reflect how much higher the stakes are now. So we have to choose between billionaires and a livable planet. I mean, is it really such a hard choice?