While Justin Trudeau's Liberals have sparked a backlash with their proposed small-business tax changes, there's a lot more zeal for the notion on his left flank. The NDP's leadership candidates are keen on taxing the rich, disallowing deductions and plugging loopholes.
If you're a small-business owner who thinks Finance Minister Bill Morneau is going to hack away at your bottom line, just wait till you see what Jagmeet Singh, the NDP's putative front-runner, proposes: new high-income tax brackets, taxing a larger portion of capital gains, hefty estate taxes, corporate tax increases and a pledge to tackle loopholes. Guy Caron, another candidate, has more detailed plans.
Of course, neither Mr. Singh nor Mr. Caron are the leader of the NDP now, let alone prime minister. But if the Liberals look to their left flank, they will see all the NDP leadership candidates selling "tax fairness" plans to make affluent Canadians and companies "pay their fair share." They obviously think that's a winning issue with voters on the left.
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There is political competition for that turf. The Liberals really won the 2015 election by winning the battle for "progressive" voters, when many New Democrats felt outflanked on the left on key issues – including Mr. Trudeau's promise to increase taxes on the 1 per cent.
NDP leadership candidates don't want to be outflanked again.
Mr. Singh promises to do outdo the Liberals' tax increases on high-income earners. Mr. Trudeau's government tax rates on income over $200,000; Mr. Singh wants two more tax brackets to raise rates another two percentage points on income over $350,000 and four more percentage points over $500,000. He proposes to tax 75 per cent of capital gains, rather than 50 per cent. He promised to eliminate tax "perks" like entertainment deductions, and tackle loopholes.
You can bet that would have an impact on many of the same people angry about the proposed Liberal changes. But Mr. Singh's tax-fairness plan doesn't talk about small business. New Democrats target the wealthy. Small business isn't the bad guy.
At a leadership-candidates town hall sponsored by the Canadian Nurses Association on Wednesday, Mr. Singh didn't say whether he backs the Liberal measures, but opined that the government must ensure that corporate structures encourage small business and do not help avoid taxes. Another leadership candidate, Niki Ashton, waffled over the answer.
That's odd: Ms. Ashton's campaign website says the tax system is "rigged against working people" and proposes steeper increases on personal income taxes for high-income earners and capital gains taxes.
Mr. Caron has a plan that would see higher-income individuals and corporations pay more, to the tune of an additional $31.3 billion a year. It includes a 1-per-cent tax on the net worth of people in excess of the cutoff for the wealthiest 10 per cent, roughly $1.4-million, not including a first home or small business.
But Mr. Caron doesn't support the Liberal proposals aimed at preventing the use of private corporations to pay less personal income tax. He argues it is a "sledgehammer to kill a fly." The government will catch some improperly avoiding taxes, but create "collateral damage" among farms and small businesses, he said.
But Charlie Angus, seen as Mr. Singh's chief rival for the leadership, isn't fudging on that point. Back in the 2015 election campaign, Mr. Angus criticized Mr. Trudeau for suggesting small-business corporations were being used to avoid taxes. More recently, another New Democrat MP, Erin Weir, warned that if the NDP doesn't take on the same fight against private corporations being used to avoid tax, the Liberals will outflank them again. At any rate, Mr. Angus isn't sparing the feelings of small-business owners now.
On Wednesday, at the town hall, Mr. Angus scoffed at the notion that the Liberals are doing enough on tax fairness, but made it clear he has no sympathy for those opposing the changes. "There's certainly a lot of whining in the media right now from certain interest groups who say it is not fair to them," he said. "Well, everyone else is paying their fair share."
With competition like that on the left, Mr. Trudeau might well find it is worth weathering the current storm: the bigger the controversy gets, the more he's competing for voters on the left.
Campbell Clark