A strong majority of Canadians would support a wealth tax on the rich and a temporary “profiteer” tax on those businesses that have seen profits soar during the pandemic, a new survey has found.
Among 1,660 Canadians polled by Abacus Data, nearly eight in 10 ― 79 per cent ― backed the idea of a one per cent wealth tax on fortunes of $20 million or more. That includes 35 per cent who “strongly favour” the tax.
The idea has the backing of 86 per cent of self-identified Liberals, 87 per cent of NDP supporters, 93 per cent of Bloc Quebecois supporters and even 64 per cent of Conservative voters, who typically oppose tax hikes.
A majority of Conservatives ― 58 per cent ― also backed “a special tax that would apply to companies whose profits have gone up because of the circumstances of the pandemic.” Support was stronger among Liberals (73 per cent) and NDP voters (77 per cent).
“What’s most striking is the general agreement across the political spectrum about a tax increase,” said David Coletto, co-founder and CEO of Abacus Data.
“Raising taxes on the rich and highly profitable corporations is one of the few ideas that both progressives and right populists agree on. Both groups are key parts of the Liberal and Conservative parties’ coalitions.”
Watch: Argentina seeks wealth tax for COVID-19 relief. Story continues below.
While the two ideas have broad popularity, it’s the NDP that has championed them. The party put forward a motion in Parliament this fall calling for an “Excess Profit Tax” and a one-per-cent wealth tax.
That motion called for the funds to be put towards “a guaranteed livable basic income,” as well as expansions to health care and affordable housing programs.
It was voted down in Parliament this week, with the NDP and Green Party voting for, and the Liberals, Conservatives and Bloc Quebecois rejecting it.
Wealth taxes around the world
With wealth inequality soaring in many countries around the world in recent decades, the idea of a wealth tax to claw it back has gained steam. A number of Democratic Party presidential candidates, including Bernie Sanders and Elizabeth Warren, proposed variations of a wealth tax in some form in their platforms.
The idea is gaining steam in a number of countries, including Argentina, where local news sources report parliament has voted in favour of a one-time “millionaire’s tax” designed to pay for the health-care costs of the COVID-19 pandemic.
The tax would charge 2 per cent on fortunes above 200 million pesos (C$3.25 million), at a rate between 2 per cent and 3.5 per cent for the largest fortunes. It’s expected to affect some 10,000 people out of a population of 44.5 million.
A number of countries already have some variation of a wealth tax, including Spain and Switzerland, though these tend to have lower thresholds than the $20 million proposed by the NDP. Norway charges 0.85 per cent on wealth above NOK1.5 million, or about C$217,000. But the tax is charged on only 30 per cent of the value of a person’s home.
Will rich people flee?
Critics of wealth taxes argue they push the wealthy to hide their assets, or ― in some cases ― to relocate to other countries.
France charged a wealth tax of between 1.5 per cent and 1.8 per cent on large fortunes for decades, before abandoning it in 2017. Research suggested the tax caused at least 10,000 wealthy people to move out of the country, mainly to Belgium.
It ended up raising so little revenue that when it was cancelled, it was largely seen as a symbolic move, Bloomberg News reported.