If the results of a new Canadian survey and more public comments from wealthy Americans are to be believed, people of means are willing to fork over more in taxes to preserve and strengthen the safety net for the less fortunate.
American billionaire Warren Buffett set off the rich-will-pay campaign by telling anyone who would listen that his tax bill was ridiculously low – lower, in fact, than his own secretary.
Now, the chorus is growing. “There's no question that we should raise the top marginal rates on people like me with high incomes,” says David Levine, a wealthy former Wall Street economist and member of the Responsible Wealth project, whose goal is to end the Bush tax cuts for the rich, as well as preferential treatment of investment income. “Several higher brackets at, say, $1-million, $5-million, and $25-million make sense. We also need to restore the status of dividends as ordinary income. There's no reason to give that form of income an advantage.”
Meanwhile, a survey of 2,000 Canadians conducted for the Broadbent Institute finds that most Canadians would not object to paying a bit more in taxes to preserve social programs and help narrow a widening income gap between the rich and everyone else.
“Individuals from all walks of life indicate they are willing to do their part through fair and equitable taxation to protect our public programs, but they want corporations to do their part too,” the institute says in a report Its hopeful conclusion: Any “government or political party that prioritizes the tackling of income inequality will not only reflect current public opinion, they will garner Canadians’ support because they will finally be addressing an issue that represents a fundamental Canadian value: equality.”
The problem with both of these initiatives is that higher taxes on the 1 per cent would not produce a large cash windfall for either Ottawa or Toronto. In the U.S., dumping the Bush cut for middle-income taxpayers would yield significantly more money. But President Obama has pledged not to do so, and the Republicans wouldn’t approve tax hikes of any sort ether before or after the November elections.
Washington could solve much of its fiscal woes by imposing a modest national sales tax, like every other industrial economy. And similarly, the Canadian government could make a big dent in its deficit by restoring the GST to its former level.
Oh, and if rich Americans and ordinary Canadians are so intent on paying more taxes, why do they keep electing politicians who promise to cut them – or at least never raise them?