Wednesday, October 13, 2010

The "Me First" Takeover of Canada

I'm busy reading Linda McQuaig's new book The Trouble with Billionaires and enjoying it immensely. But it got me to go looking and I was pleased to find her articles in the Toronto Sun on-line. Here's the latest and derives directly from her book with Neil Brooks:
Meanwhile, despite massive deficits here too, the prospect of collecting more taxes from Canada’s incredibly wealthy elite — we now have 55 billionaires and thousands of multi-millionaires — remains well off the political agenda.

One simple, rarely mentioned option would be to restore a variation of the tax that Ottawa quietly removed 40 years ago.

Strikingly, if Canada were to once again tax large inheritances — the way just about every other advanced nation still does — we could raise enough revenue to put $16,000 into an educational trust fund for every Canadian child on his or her 16th birthday.

Under this simple plan, developed by Osgoode Hall tax professor Neil Brooks, Canadians could inherit up to $1.5 million tax-free. Above that, a gradually rising tax would apply.
Most Canadians simply don't realize what a deal the rich got 40 years ago. I think most would demand that the estate taxes be re-instated and Neil Brooks' education plan be put in place. It is a wonderful step to move Canada closer to the European standard where university education is subsidized and further away from the beggar-thy-neighbor approach of the US where they want to shrink government and leave the rich to play Scrooge McDuck rolling on his pile of filthy lucre.

The reality is that there has been a strong shift from the post WWII "golden age" when the middle class was coddled by the government to one where all the goodies go to the ultra-rich.

For those who would complain about a "new tax" on the rich, here's the McQuaig answer:
Some will protest that an inheritance tax picks on the wealthy. But the current situation could be characterized as picking on the non-wealthy. Regular income — money earned on the job — is taxed.

But there’s no tax on money received through large inheritances. These windfalls aren’t earned, but just dropped into the laps of a lucky few, requiring no effort or talent on their part, beyond choosing appropriate parents.

Warren Buffett has dubbed this the “ovarian lottery.”

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