Source: Vanfun Warm House

We don't understand the world of the wealthy!

While the middle class is struggling to pay their tax bills, a group of self-proclaimed "patriotic Canadian millionaires" is actively petitioning for higher taxes on themselves.

This move has left many netizens stunned.

According to CBC reports, these wealthy individuals are emulating similar movements in the United States and the UK, calling for comprehensive reforms in taxation for high-income groups, particularly in the areas of "wealth tax" and "capital gains tax."

The members of this "patriotic millionaire" organization stated that Canada's current tax system is severely unfair.

For example, low-income groups derive most of their income from wages and must pay full taxes, while the wealthy can legally "adjust" their sources of income through dividends, choosing low-tax investment projects, setting up family trusts, etc., thereby reducing their actual tax amounts.

These wealthy individuals can no longer tolerate this situation!

For instance, Sabina Vohra-Miller and her husband Craig Miller (former Chief Product Officer of Shopify) insist on this issue. They publicly stated: "Why do we pay less tax than those who truly earn wages?"

Therefore, these wealthy individuals have decided to speak out and push the Canadian government to review and correct the inequalities in the tax system.

As Claire Trottier, chairperson of the Canadian branch of the organization, said: "Although this organization was initially established in the United States, we quickly realized that this is actually a global issue. Every country should seriously reflect on its own tax system and strive for greater fairness."

Although the "Patriotic Millionaire" organization has not yet been officially registered in Canada, it has already gained some momentum.

Their initial goal is to change Canadians' perceptions of taxing the rich and they plan to release a research report in June analyzing the impact of different wealth tax systems in the G7 countries on government fiscal revenue.

In addition, the organization plans to host a public event in Ottawa in June, urging Canada, as the host of the 2025 G7 Summit, to take the lead in reassessing the way taxes are levied on the wealthy to promote global tax reform.

Dylan Dusseault, executive director of the "Patriotic Millionaire" organization, also stated: "We have clear goals, now it's about lobbying the newly elected members of parliament and the incoming finance minister to consider adjusting the current tax policies."

Currently, Canada does not have a national "wealth tax" like some European countries, although there have been discussions in some provinces, the federal government has never passed relevant legislation.

Call to restore and increase capital gains tax inclusion rate

Interestingly, just last month, when Cardy was elected in March, he completely abolished the capital gains tax increase originally planned by the Trudeau government, maintaining the existing 50% inclusion ratio.

Originally, there were strong voices opposing the increase in the capital gains tax inclusion rate, but now the winds seem to be changing among the super-rich. These wealthy individuals now hope the government will reconsider increasing the capital gains tax.

The most feasible way to increase taxes at present is to restore the increase in the capital gains tax inclusion rate proposed by the previous Trudeau government. According to the federal government's 2024 budget proposal, the inclusion ratio for capital gains exceeding $250,000 is planned to be increased from 50% to 66.67%.

This reform is expected to bring an additional $19.4 billion in tax revenue to Canada over five years. Even if some wealthy individuals may avoid taxes ahead of time, the government still expects to receive approximately $17.4 billion in tax revenue.

From a social perspective, although this reduces the personal disposable income of the wealthy, it could improve the national fiscal situation, make the tax burden more equitable, and help alleviate dissatisfaction among middle- and low-income groups and reduce wealth inequality.

Some wealthy individuals oppose tax increases

Of course, not all wealthy individuals are willing to "pay out of their own pockets."

For instance, John Ruffolo, a Canadian venture capitalist, founder of Maverix Private Equity Company, and vice president of the Canadian Innovators Association, strongly questioned this: "Tax policies are essentially value-oriented. You should tax 'harmful behaviors.' But the current policy sends the signal that Canada is no longer welcoming successful people, investments, or entrepreneurship. Is this really the message our country wants to convey?"

Ruffolo's concern is that once the tax increase policy is implemented, it may discourage entrepreneurial spirit and drive high-net-worth individuals away from Canada.

He also raised another point: if some wealthy individuals are willing to pay more taxes, why not directly donate to society instead?

"If you are genuinely passionate about certain social causes, you can choose charitable donations. No one is stopping you. I am personally a supporter of charitable donations. What I care more about is the autonomy of donation choices, such as who to donate to and why to donate."

He even cited examples such as Warren Buffett and Bill Gates. For instance, Buffett plans to donate 99.5% of his assets to charity organizations, while Gates has pledged to donate 99% of his wealth, approximately $107 billion, to the Gates Foundation.

However, Claire Trottier responded to this "donation instead of taxation" view in a subtle manner: "We cannot rely on people to spontaneously donate money and assume they will donate it to where society needs it most."

Claire Trottier explained: "The root of the problem is not the 'goodwill' of the wealthy, but the function of the tax system to address structural social inequalities."

Tax reform, more about social stability

David Duff, director of the Tax Law Master's Program at UBC, stated that the current economic weakness in Canada and the uncertainty in relations with the United States have made the government extremely cautious about tax increase policies.

"In the current political cycle, opposition to tax increases dominates public opinion. Policymakers are concerned that any signal suggesting 'Canada is no longer friendly' to the wealthy could trigger capital flight."

Moreover, David Duff also stated: "The claim that 'tax increases will lead to economic disaster' is often exaggerated. If tax avoidance methods were truly effective, those opposing tax increases would not be so agitated."

Data shows that by 2024, the disposable income gap between the wealthy and middle-income groups in Canada has reached the highest level since 1999, and the main driver of this differentiation is capital gains.

This explains why the "Patriotic Millionaire" organization repeatedly insists on calling for reforms.

As Claire Trottier said in conclusion: "Are we ready to face a reality? When wealth inequality is accelerating the tearing apart of society, it is no longer just an economic issue, but a direct threat to democratic institutions."

Information source: CBC

Original article: https://www.toutiao.com/article/7504102077572989451/

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