Ottawa (19 Nov. 2020) — This week, Members of Parliament voted against an NDP motion calling for a wealth tax and a tax on excessive corporate profits. The NDP proposal called for a 1% tax on wealth over $20 million and an excess profit tax. It was proposed that funds raised through these measures be used to fund income security programs, health care and housing.
It was defeated when the Liberal Party, the Conservative Party and the Bloc Québécois voted against it.
Wealth tax should be a “no brainer” after the increase in income inequality due to COVID-19
While the COVID-19 pandemic has left many people struggling to get by, a select few have done very well indeed. The wealth of the super-rich has reached record levels. Similarly, at the same time many businesses are just trying to keep going, some companies are reporting record growth.
For anyone who believes in reducing income inequality, asking the very wealthy to pay a bit more in tax to help fund programs that will help people who are struggling should be a “no brainer.” When a political party votes against measures as basic as a wealth tax or an excess profits tax, it suggests that party does not take the problem of income inequality seriously.
Canadians overwhelmingly support a wealth tax
Polling has shown overwhelming support for a wealth tax among Canadians. A recent poll done by NUPGE found that 79% of Canadians support a wealth tax on assets of more than $20 million.
Without tax fairness, cuts more likely
A second reason to be concerned about the vote on the proposal for a wealth tax and an excess profits tax is what will happen now instead. Governments can afford to run deficits to spend what is needed to help Canadians get through the pandemic but over the long-term one of two things will happen: either government revenues must increase or governments will introduce austerity policies and make drastic cuts to public services.
In the 1990s, governments chose to introduce austerity policies and drastic cuts were made to services Canadians rely on. Many of the problems we’re facing today with services like long-term care can be traced back to the decisions of both Liberal and Conservative governments to cap federal spending on health care and other services. Governments chose austerity policies, even though the high levels of public debt were caused by cutting taxes on corporations and the wealthy and cost of borrowing money to pay for those tax cuts.
Today, many of us are hoping that governments don’t repeat the mistakes of the 1990s and that tax fairness measures are used to help us recover from the pandemic. But when the Liberals, Conservatives and Block Québécois are opposing measures like a wealthy tax and excess profits tax, there is reason to be concerned.