Pluralistic: The case for a Canadian wealth tax (23 Jun 2025)


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A gilt-roofed, gabled mansion with a hole chopped in its side. From within glitters a weath of gold coins. In the foreground stands a lumberjack, swinging an axe at the mansion. The background is a blown-up, half-toned late 20th century Canadian $50 bill.

The case for a Canadian wealth tax (permalink)

A major problem with letting billionaires decide how your country is run is that they will back whichever psycho promises the lowest taxes and least regulation, no matter how completely batshit and unfit that person is:

https://www.hamiltonnolan.com/p/nations-are-people

Billionaires have farcical, almost unimaginable resources. These let them take over whole political parties, even "left" parties, with the result that all real electoral options disappear. Voting for the other party gets you a different set of aesthetics, but the same existential threats to the human race and the planet:

https://www.theguardian.com/world/2025/jun/22/starmer-backs-us-strike-on-iran-and-calls-for-tehran-to-return-to-negotiations

After generations of increasingly oligarch-friendly policies and billionaire entryism into the Democratic Party, America may well be cooked, a total write-off for generations to come. The path to saving the world and our species arguably lies through strengthening other countries to resist American psychos and protect the planet from the consequences of their brainwormed leadership.

Writing for Jacobin, Alex Hemingway sets out a plan for imposing a wealth-tax on Canada's oligarchs, one that incorporates lessons from previous attempts at such a tax:

https://jacobin.com/2025/06/wealth-tax-canada-inequality-austerity/

Even on the left, the idea of a wealth-tax is controversial – not because leftists are sympathetic to billionaires, but because they are skeptical that a wealth tax can be carried out. It's a practical, not an ideological objection:

https://pileusmmt.libsyn.com/196-the-problem-with-wealth-taxes-with-steven-hail-part-1

After all, under capitalism, wealth always grows faster than the economy at large, meaning that over time, the rich will get steadily richer, and inequality will widen and widen:

https://memex.craphound.com/2014/06/24/thomas-pikettys-capital-in-the-21st-century/

Ideally, we would counter the trend of wealth piling up into dynastic fortunes with continuous redistribution and predistribution: taxing capital gains at the same rate (or a higher rate) than income, so that income from labor isn't treated worse than income from ownership; steeply graded progressive taxes, with top rates of 70-99%, high inheritance taxes, and so on. We had a system like that, from the end of WWII (when the rich were poorer than they'd been in centuries, with their influence in tatters) until the Reagan era (when the rich had rebuilt their fortunes and were able to seize the reins of power). In the 45 years since the rise of the new oligarchy, we've lived through accelerating wealth accumulation, and as the rich got richer, they used their wealth to dismantle any barrier to creating new aristocratic dynasties.

So here we are, trapped in the new oligarchy. It's too late to rely on income taxes, not if we're going to euthanize enough rentiers to free out politics from their toxic influence and save the human race any of several foreseeable mass-extinction events. Making the ultra-rich poor again is going to require new tactics.

In Canada, the 1% owns 29% of the country's wealth. The 87 richest families in Canada control as much wealth as the bottom 12 million Canadians combined. This is better than the US (where the 1% own 35% of the country), but not by much:

https://www.policyalternatives.ca/wp-content/uploads/attachments/Born%20to%20Win.pdf

Can we make a wealth tax work? Here's Hemingway's program for making it work in Canada:

  • Make it apply to all kinds of wealth equally. No carve-outs for real-estate, which makes it very easy to shift wealth among asset-classes to duck the tax;

  • Aim it at the super-rich alone. Avoid even the upper middle-class, who lack the liquid assets to pay the tax and could get wrecked if they have to liquidate their holdings at the same time as everyone else, which will depress asset prices;

  • Use third-party assessments of asset values. Don't take billionaires' word for how much their assets are worth! Canada's got an advantage here, thanks to the Canada Revenue Agency's requirement for financial institutions to report their account holders' income, including capital gains. Canada's also recently created "beneficial owner" registries that record the true owners of assets;

  • Use lifestyle audits: anyone caught engaging in tax-evasion will face severe penalties, as will the enablers at financial services firms that help them.

One frequent objection to high taxes is that it encourages capital flight – rich people hopping to another territory to avoid taxation. That's a reasonable fear, given how pants-wettingly terrified the rich are of paying tax. Hemingway points out that a wealth tax is different from an income tax – income taxes are levied on the outcome of productive activities, while wealth taxes target accumulated wealth. High income taxes can starve a country of the capital it needs for a productive economy, but that's not the case with wealth taxes.

Hemingway points to the OECD's Common Reporting Standard, through which more than 100 countries have agreed to share financial information, which will help Canada catch billionaires as they funnel their wealth offshore. Meanwhile, if the rich try to move with their money, we can hit them with an exit tax, like the 40% that Elizabeth Warren has proposed.

It's an article of faith that the rich will move offshore at the first hint of a wealth tax, but the research shows that rich people often have reasons to stay that trump their taxophobia. The economic effect of rich people Going Galt is pretty darned small:

https://warwick.ac.uk/fac/soc/economics/research/centres/cage/publications/workingpapers/2022/taxation_and_migration_by_the_super_rich/

The modern prophet of oligarchy and its origins is the French economist Thomas Piketty. In a recent Le Monde column, Piketty examines the failure of a French wealth tax proposal that would have shaved a modest 2% off the fortunes of the 1,800 French people with more than €100 million:

https://www.lemonde.fr/blog/piketty/2025/06/17/the-senate-beside-the-story/

The proposal passed the National Assembly, only to die in the Senate, an institution with a long history of pro-oligarchic activism (the Senate killed every French income tax passed by the Assembly from 1896-1914). The Assembly's wealth tax addressed the problem of tax exiles, levying the wealth tax for 5 years after an oligarch relocated. For Piketty, this didn't go far enough: he wants a pro-rated tax based on the number of years an oligarch spent in France in their lifetime: if you were educated and cared for at French expense from birth and went on to become a billionaire, then a modest share of your wealth would forever be owed to the country that made it possible. Piketty says that a wealth tax could be paid in shares instead of cash, with the stock going into a trust for workers, who would get board seats as well.

He points out that decarbonization is going to require large sacrifices from all of us, but that these will be impossible to demand with a straight face so long as the super-rich are paying taxes that are trivial relative to their assets and income.

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