The federal New Democratic Party is calling for higher taxes on capital gains, corporations and the highest-income earners, including a 1% wealth tax on the “super-rich.”
In the platform unveiled this week ahead of the fall federal election, NDP leader Jagmeet Singh said his party would raise corporate taxes to 18% (from 15%) and tax capital gains at a rate of 75%. The 25-point hike to the tax on investment profits would raise almost $3 billion to put toward NDP priorities such as pharmacare, childcare, housing and education, the platform says.
The party would maintain the current small business tax rate of 9%.
The NDP would also increase the top marginal tax rate for those making more than $210,000 to 35% from 33%, and implement a 1% wealth tax on “super-rich multi-millionaires with wealth over $20 million.” The wealth tax would generate “several billion dollars annually,” according to the platform.
In a report released Thursday, the C.D. Howe Institute came out against the wealth tax, forms of which have also been proposed by French economist and author Thomas Piketty and U.S. Senator and Democratic presidential candidate Elizabeth Warren.
The authors argue that wealth and capital income taxes are analogous and often overlap.
“Our judgment is that a well-functioning capital income tax is far superior to an annual wealth tax,” the report says, arguing that a combination of reformed capital income tax and a wealth transfer or inheritance tax would address the inequality that a wealth tax targets.
“The benefit of implementing [an annual wealth tax] alongside a capital income tax does not compensate for the significant administrative costs that would be involved.”
Other tax components of the NDP platform include:
- A 15% foreign buyers tax on purchases of residential property by foreign corporations or people who are not citizens or permanent residents.
- Doubling the Home Buyer’s Tax Credit to a maximum credit of $1,500 from $750.
- Allowing income tax averaging for artists and cultural workers.
- Ending the stock option deduction.
- Ending “the unfair tax treatment of family farm transfers.”
- Making the Canada Caregiver Tax Credit refundable.
- Expanding the Volunteer Firefighters Tax Credit.