Canada can look to Democrats for tax fair­ness ideas

Regina Leader-Post - - OPINION - GREG FINGAS Fingas is a Regina lawyer, blog­ger and free­lance po­lit­i­cal com­men­ta­tor who has writ­ten about pro­vin­cial and na­tional is­sues from a pro­gres­sive NDP per­spec­tive since 2005.

In the early stages of the 2020 pres­i­den­tial elec­tion, the U.S. po­lit­i­cal scene is abuzz with con­ver­sa­tions sel­dom heard in re­cent decades.

Af­ter the Trump Repub­li­cans’ tax cuts for the rich­est few proved to be a po­lit­i­cal mill­stone and a pol­icy disas­ter, Demo­cratic chal­lengers are ex­plor­ing the flip side of that re­al­ity by propos­ing that wealthy Amer­i­cans pay their fair share to main­tain a func­tional so­ci­ety.

A hy­po­thet­i­cal ques­tion to Rep. Alexan­dria Oca­sio-cortez first gave rise to talk about mar­ginal tax rates of up to 70 per cent on ex­tremely high-in­come in­di­vid­u­als — with the fore­see­able ef­fect of sub­stan­tially re­duc­ing ex­treme in­equal­ity, while also of­fer­ing fund­ing for trans­for­ma­tive pol­icy ideas such as a Green New Deal.

In launch­ing her pres­i­den­tial cam­paign, El­iz­a­beth War­ren of­fered an­other pos­si­bil­ity by float­ing the idea of a wealth tax on as­sets over $50 mil­lion. And Bernie San­ders fo­cused on the trans­fer of un­earned for­tunes be­tween gen­er­a­tions with a plan to sub­stan­tially in­crease the es­tate tax in the U.S.

So far, all in­di­ca­tions sug­gest that those plans for a more pro­gres­sive rev­enue sys­tem are both pop­u­lar with the pub­lic, and vi­able eco­nom­i­cally.

Con­trary to the as­sump­tion by far too many pun­dits that any tax in­creases what­so­ever are po­lit­i­cal poi­son, the con­cept of rais­ing more rev­enue through either in­come taxes or wealth taxes is ac­tu­ally broadly pop­u­lar among vot­ers from across the po­lit­i­cal spec­trum — even achiev­ing sub­stan­tial sup­port among Repub­li­can back­ers.

If there was any doubt as to where the Amer­i­can pub­lic stands given the choice be­tween more pro­gres­sive taxes and def­er­ence to the wealth­i­est few, an­other pres­i­den­tial run aimed at crit­i­ciz­ing more pro­gres­sive taxes pro­vided a con­clu­sive an­swer. When for­mer Star­bucks CEO Howard Schultz launched an in­de­pen­dent cam­paign, he framed his run largely around the claim that more pro­gres­sive taxes are too ex­treme to merit con­sid­er­a­tion. But the lim­ited con­stituency for that po­si­tion was ex­posed by Schultz’s stun­ningly poor ap­proval rat­ings, with 10 times as many vot­ers dis­ap­prov­ing of his can­di­dacy as ap­prov­ing.

Mean­while, even as talk­ing heads pre­dictably clung to tired trickle-down tropes, lead­ing econ­o­mists pointed out how a fairer tax sys­tem is en­tirely fea­si­ble — in some cases go­ing so far as to point out that Oca­sio-cortez’s and War­ren’s pro­pos­als could be more am­bi­tious with­out any ill ef­fects.

To be sure, there’s a large gap be­tween talk and ac­tion. And the eas­ily grid­locked U.S. po­lit­i­cal sys­tem will make it dif­fi­cult for any sin­gle politi­cian’s plan to be en­acted fed­er­ally.

But af­ter be­ing told we had no choice but to fol­low Don­ald Trump’s lead to­ward re­gres­sive tax pol­icy, Canada should take the op­por­tu­nity to look to the U.S. back­lash for in­spi­ra­tion of our own.

There may be some ways in which we’re more lim­ited in our range of ac­tion, as our smaller econ­omy might leave us with less room to move on the in­come tax side. But our lack of any es­tate tax in par­tic­u­lar looks all the more ab­surd as the U.S. dis­cusses en­hanc­ing its own.

More­over, any con­ver­sa­tion about boost­ing high-end tax rev­enue can also in­clude a dis­cus­sion of what it can fund.

The for­tunes that serve lit­tle pur­pose but to drive up the price of po­si­tional goods and en­trench in­ter­gen­er­a­tional un­fair­ness can in­stead in­vest in eco­nomic de­vel­op­ment and so­cial progress, which are too of­ten dis­missed as be­ing be­yond our means.

We do have a long way to go in build­ing a fair tax sys­tem. But as we see what’s pos­si­ble and pop­u­lar in the U.S., there’s an ideal op­por­tu­nity to dis­cuss how we can build a stronger coun­try by seek­ing out more rev­enue where the money is.

There’s an ideal op­por­tu­nity to dis­cuss how we can build a stronger coun­try...

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