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68 Can. Tax J. 835 (2020)
The Case for an Annual Net Wealth Tax

handle is hein.journals/cdntj68 and id is 895 raw text is: CANADIAN TAX JOURNAL/ REVUE FISCALE CANADIENNE (2020) 68:3, 835-50 https://doi.org/10.32721/ctj.202o.68.3.pf.jackson Policy Forum: The Case for an Annual Net Wealth Tax Andrew Jackson and Toby Sanger* PR CIS Le public et les decideurs politiques montrent un intret renouvel6 pour les imp6ts sur la fortune comme reponse possible au probleme de l'inegalit6 de la richesse. Cet article decrit la tendance recente a l'augmentation de l'inegalit6 de la richesse, et les facteurs qui y contribuent dans les pays developpes, y compris le Canada. Les auteurs font valoir qu'un imp6t annuel sur la fortune pourrait et devrait contrer cette tendance, et qu'un tel imp6t est a la fois justifiable sur le plan &conomique et realisable sur le plan technique. Ils affirment que l'imposition du revenu du capital ne resout pas adequatement le probleme de l'accumulation de grandes fortunes en grande partie en franchise de l'imp6t, et qu'un imp6t annuel sur la fortune est preferable aux imp6ts fonciers, qui excluent l'imposition des actifs financiers et sont preleves sur le patrimoine brut plut6t que sur le patrimoine net. L'article repond en detail aux principales critiques concernant un imp6t annuel sur la fortune, en faisantvaloir qu'un tel imp6t est necessaire pour parvenir a une repartition plus equitable de la richesse tout en generant des recettes supplementaires. ABSTRACT The public and policy makers are showing a renewed interest in wealth taxes as a possible response to the problem of wealth inequality. This article describes the recent trend of rising wealth inequality, and the factors contributing to it, in developed countries, including Canada. The authors argue that an annual wealth tax could and should counter the trend, and that such a tax is both justifiable on economic grounds and technically feasible. They assert that the taxation of capital income does not adequately address the largely tax-free accumulation of large fortunes, and that an annual wealth tax is preferable to property taxes, which exclude the taxation of financial assets and are levied on gross rather than net wealth. The article responds in detail to major criticisms of an annual tax on wealth, arguing that such a tax is needed to achieve a more equal distribution of wealth while raising additional revenues. KEYWORDS: WEALTH TAXES I NEQUALITY. TAX POLICY. TAX REFORM CAPITALTAXES ECONOMIC GROWTH * Andrew Jackson is senior policy adviser at the Broadbent Institute (e-mail: ajackson @broadbentinstitute.ca). Toby Sanger is executive director of Canadians for Tax Fairness (e-mail: toby.sanger@taxfairness.ca). We thank Kevin Milligan, Alan Macnaughton, and Daniel Sandler for their helpful comments on an earlier draft. 835