Amid Davos, calls are growing to tax the ‘ultra rich.’ Where does Canada stand? – National | 24CA News

As world leaders collect on the World Economic Forum in Davos, Switzerland, there are rising calls to tax what some name the “ultra rich” — however how possible is that in Canada?

A brand new report launched by Oxfam International Monday recommended that the world’s wealthiest one per cent collected almost twice as a lot new wealth — a whopping US$26 trillion — in comparison with the remaining 99 per cent of the worldwide inhabitants over the previous two years.

That report mentioned that throughout the COVID-19 pandemic, billionaire fortunes rose by US$2.7 billion a day, whereas no less than 1.7 billion staff dwell in international locations the place inflation is outpacing their wages and over 820 million individuals are going hungry.

“Wealth inequality is out of control and is at levels that we haven’t seen before, and we’re starting to see poverty increase for the first time in 25 years,” mentioned Ian Thomson, coverage supervisor at Oxfam Canada in Ottawa.

The Oxfam report comes because the World Economic Forum, an annual gathering of political and business leaders, is underway in Davos.

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To slender the ever-widening hole between the rich and poor, Oxfam is urging governments to introduce a spread of tax insurance policies concentrating on the wealthy.

These embody one-time “solidarity” wealth and windfall taxes, in addition to completely elevating taxes on the richest one per cent.

And now, some millionaires, together with rich Canadians, are becoming a member of the requires larger taxes.

In an open letter launched Wednesday to political leaders in Davos, a bunch of greater than 200 millionaires from 13 international locations mentioned: “Tax the ultra rich and do it now. It’s simple, common-sense economics. It is an investment in our common good and a better future that we all deserve, and as millionaires we want to make that investment.”

Claire Trottier, a philanthropist and tax justice advocate from Montreal, is amongst 5 Canadians who’ve signed the letter.

She mentioned taxing the wealthy is not going to solely handle the widening inequality but in addition generate much-needed income to sort out main issues that the world is going through proper now.

“There’s no one solution, but certainly wealth taxes to me are an absolutely essential and necessary part of the solution,” Trottier advised Global News.

In an Ipsos ballot performed final yr, an awesome majority of Canadians (80 per cent) mentioned that governments ought to tax the wealthy extra.

The federal authorities has been taking a look at methods to do this and guarantee tax equity, however critics in favour of extra taxes on the best earners say extra must be performed, together with an imposition of a wealth tax, inheritance tax, windfall revenue tax on firms, in addition to closing any tax loopholes within the nation as a part of a few of the options.

The Liberal authorities’s 2022 funds included a proposed surtax of 1.5 per cent on financial institution earnings over $100 million, in addition to a one-time 15 per cent cost on revenue above $1 billion for the 2021 tax yr.

A luxurious items tax, which got here into impact final September, covers vehicles and SUVs, in addition to non-public planes and helicopters, price greater than $100,000. The federal tax will even cowl yachts and boats, together with motorboats, price greater than $250,000.

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These are all “baby steps,” Thomson mentioned.

“The Liberal government has said for many years that they want to address excessive wealth inequality, but we haven’t seen them putting those words into action,” he mentioned.

The New Democratic Party has been placing strain on the Liberals to do extra to tax the super-rich. With the social gathering now in a governance deal till 2025 with the federal Liberals, who maintain a minority authorities, whether or not the NDP will use that affect to push additional on these targets just isn’t clear.

“It’s disappointing to see the federal government refuse to take progressive action to make sure that the richest are paying their fair share in taxes,” mentioned Niki Ashton, NDP critic for tax equity.

“We need to close tax loopholes that are allowing the richest in our country from evading and avoiding paying their taxes,” she added.

According to Oxfam’s evaluation, 95 meals and power firms greater than doubled their earnings final yr, making US$306 billion in windfall earnings.

In Canada, the highest-paid CEOs and different prime executives shattered a file for compensation in 2021, incomes a mean of $14.3 million, in response to a report by the Canadian Centre for Policy Alternatives launched earlier this month.

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Thomson, of Oxfam Canada, mentioned the response to the COVID-19 pandemic and its consequent financial disaster, has contributed to the wealthiest rising their fortunes.

He mentioned pumping public cash to maintain economies afloat and to satisfy the essential wants of individuals actually drove up company earnings over the previous two years.

“The response to the pandemic was necessary, but what it led to is this wealth concentration at the top,” he advised Global News.

This is why Oxfam and others are calling for a windfall tax on firms which have seen extra earnings. Oxfam additionally needs the concept to go additional to incorporate large meals firms, as a approach to slender the widening hole between the wealthy and poor.

Some governments have turned to taxing fossil gas corporations’ windfall earnings as Russia’s warfare in Ukraine despatched oil and pure gasoline costs hovering final yr.

Canada just isn’t on board but, with the federal authorities saying it has no plans to impose a windfall tax on the large earnings being posted by Canadian power corporations.

Tax avoidance and evasion are additionally exacerbating the inequality downside, because the wealthy are in a position to transfer their cash round and reap the benefits of the authorized system to pay much less in taxes, specialists say.

A 2017 joint investigative report by the Toronto Star and the CBC entitled “Snow Washing” revealed how rich people world wide had been creating shell corporations in Canada to cover their cash.

Marc Tasse, a forensic accountant and professor on the University of Ottawa, mentioned Canada is “an attractive” choice for corrupt people as a result of it’s simple to create an organization with out offering a lot info within the nation.

“You can incorporate a company in Canada in about 15 minutes, so basically easier to incorporate a company in Canada than it is to get a library card,” he advised Global News.

To sort out the issue, there needs to be a “political will,” however the issue can’t be fastened in a single day, Tasse mentioned.

“I think that we need to review our laws, to give more power to regulatory agencies and also to law enforcement agents,” he mentioned.

“We need to work hand-in-hand with our international partners.”

— with information from The Associated Press and The Canadian Press