Premier Kathleen Wynne talks about spreading the pain of new revenue tools for transit between drivers and transit users. But she doesn’t mention that new taxes will hit middle-class Ontarians, with their stagnating incomes, very hard.
She needs support for her budget, so her options on this issue are limited. The Tories are against new taxes altogether, while the NDP is looking to make the tax system fairer.
But there is a way out of the impasse. Ontarians responded well last year when the McGuinty government, acting on an NDP demand, levied a 2 per cent surcharge on those making over $500,000 – less than 0.003 per cent of the population.
It may be time for the NDP to take the next step. A few options come to mind for the preem to consider. The first is to make the 2 per cent surcharge permanent and perhaps introduce a new bracket for those earning over $350,000. Together, these measures would bring in over $500 million yearly, based on estimates.
Another possibility is creating a new wealth tax of 1 to 2 per cent on individuals with property, cash, stocks and bank deposits worth more than $5 million. Ninety-eight per cent of Ontarians would not pay this tax. Based on other wealth taxes around the world, it’s not unreasonable to assume this would bring in $1 billion annually.
It is these individuals who have most benefited from our society, so it’s fair to ask them to contribute a bit of their success toward laying the groundwork for a stronger economy.
Another way of tackling the increasing wealth disparity would be a surcharge on residential property worth over $3 million when it is sold. Only about 1,500 properties yearly would be eligible, and at 1.5 per cent, this would bring in about $200 million annually.
If these options were combined with the cancellation of upcoming corporate tax cuts worth over $1 billion yearly to a sector that has already received $4.5 billion in cuts over the last decade, the government would have enough money for public transit.
These small taxes seem only fair. And they would garner more support than road tolls or new sales taxes, meaning they’d be more likely to stick around.
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