Wealth tax idea 'one of the dumbest things' in the throne speech: John Manley
The Canadian government's proposed wealth tax outlined in Wednesday's throne speech is "one of the dumbest things" included in the Liberals' agenda to help support the country's economy amid the COVID-19 pandemic, according to John Manley, senior advisor at Bennett Jones and a former deputy prime minister.
"There's a basic problem with that," Manley, who also served as finance minister under former prime minister Jean Chretien, told BNN Bloomberg on Thursday in a television interview. "There aren't enough rich people, and secondly, if you tax them enough, they'll leave (Canada)."
Governor General Julie Payette said during the throne speech that the government would “identify additional ways to tax extreme wealth inequality, including by concluding work to limit the stock option deduction for wealthy individuals at large, established corporations, and addressing corporate tax avoidance by digital giants."
While the Liberals didn't provide specifics on what a wealth tax would look like, Manley wondered how that would compare to the existing capital gains tax and how it could apply to selling a primary residence, something that may impact the country's middle class.
"The problem with tax increases is simple. It always has to hit the ball with the middle class," Manley said.
Meanwhile, David Rosenberg, chief economist of Rosenberg Research and Associates Inc., told BNN Bloomberg Thursday many of the government's proposed spending plans may come at the expense of taxing the middle class.
He added the mention of a wealth tax in the throne speech was "limited" and may bring "next to nothing" in terms of additional revenue to the government.
"If you took a look at all these initiatives, you're looking at hundreds of billions of dollars if everything were to see the light of day, which they probably won't," Rosenberg said in a television interview.
"You can't tax the rich and fund that. There's not enough of them to fund all of that."