It is rare to hear a Canadian politician speak about tax increases in non-apologetic tones, so it was refreshing to read federal NDP leadership candidate Brian Topp's policy paper Bringing Balance and Fairness to Canada's Tax System. His proposal responds to many concerns expressed by the Occupy movement, with tax increases focussed on the 1%.
The specifics include:
1) Raising the federal income tax rate on income over $250,000 to 35%. The current top rate is 29% on income over $128,800.
2) Reversing the Harper Government's corporate tax cuts. This would restore the federal corporate tax rate to 22% from the current 15%.
3) Taxing capital gains and stock options at the full rate. Capital gains is income acquired when property (usually stocks or real estate) increases in value and is sold for more than in it cost to buy. In the current system, capital gains are taxed at only half the rate of most other kinds of income (there is no capital gains tax on one's principal residence). This disproportionately benefits the wealthy, who can afford to own lots of investments. A similar rule applies to income generated by exercising stock options, which have become a popular form of compensation for corporate executives. Topp proposes to tax capital gains at the same rate as other income (with appropriate corrections to account for inflation). He would continue to exempt primary residences, small businesses, and farm assets from the tax.
Topp estimates that these changes would raise 18 billion dollars, cutting in half the current budget deficit. More importantly, it puts more of the tax burden on those most able to afford it and helps diminish the relentless growth in income inequality in our country.
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