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DESIGNING A WEALTH TAX FOR TODAY’S ROBBER BARONS  
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Alex Hemingway
June 12, 2025
Jacobin
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_ A proposed wealth tax on Canada’s richest 0.6% could raise
hundreds of billions of dollars — enough to tackle housing, transit,
and care. The sheer scale of what a tiny slice of billionaire wealth
could fund is staggering. _

Meta CEO Mark Zuckerberg wears Orion augmented reality glasses during
the Meta Connect event in Menlo Park, California, on Wednesday,
September 25, 2024., David Paul Morris / Bloomberg via Getty Images

 

Under threat from a volatile United States, Canada needs to chart its
own path to build a more self-reliant, just, and equitable economy.

 

A time like this calls for nation-building: the country can’t afford
austerity or cutbacks, nor can it afford to let the superrich call the
shots in its economy and public policy.

Canada urgently needs robust public investment in physical and social
infrastructure: new homes, schools, hospitals, transit, and green
energy. It also needs to reduce the extreme concentration of wealth at
the top, which distorts democracy and frays the social fabric much.

A wealth tax focused on those at the very top — less than 1 percent
of Canadians — could help achieve both these goals. Such a wealth
tax could raise huge amounts of public revenue to put toward building
infrastructure and critical social investments, while blunting the
growing power of the wealthiest few and creating a more level playing
field on which working-class Canadians can thrive.

This report first lays out the context, examining the extent and
effects of wealth inequality today and the strong public support and
growing international momentum for a wealth tax.

Central to its analysis, the report then assesses the significant
revenue potential of a 1 percent tax on net wealth above $10 million
— with higher brackets and rates on wealth above $50 million and
$100 million — projecting it could raise nearly half a trillion
dollars for Canada over ten years. Key counterarguments to such a tax
are addressed and shown to be largely off base.

In its conclusion, the report outlines some of the transformative
public investments that the revenue generated by a wealth tax could
fund to build a stronger and more equitable Canada.

Extreme Inequality Damages the Economy and Social Fabric

Wealth inequality in Canada is sky high.

Analysis
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the Parliamentary Budget Office (PBO) shows the richest 1 percent
control 24 percent of the country’s wealth, amounting to $3.5
trillion in 2021. Research from academic economists
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that figure even higher, finding that the top 1 percent control 29
percent of net wealth.

Research published
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the Canadian Centre for Policy Alternatives in 2018 found that the
eighty-seven richest families in Canada held as much wealth as the
bottom 12 million Canadians combined. The 2025 _Forbes_ Real-Time
Billionaires
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finds that seventy-eight Canadian billionaires hold $520 billion in
wealth.

Canada is not alone experiencing extreme wealth concentration. In the
United States, wealth inequality is even higher, with the top 1
percent holding
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35 percent of total wealth. At a global level, a recent Oxfam
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estimates that the richest 1 percent now “own more wealth than 95
percent of humanity.”

This extreme inequality is corrosive, damaging economies, societies,
and democracy.

A wide range
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research, including from economists at conservative institutions
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the International Monetary Fund
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Organisation for Economic Co-operation and Development (OECD
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lowers economic growth and productivity. Inequality can lead to less
investment in areas like education, meaning poorer people are unable
to flourish and realize their productive potential. As one report
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“When those at the bottom of the income distribution are at high
risk of not living up to their potential, the economy pays a price.”
Inequality can also reduce economic growth by making it more volatile
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less enduring and by lowering aggregate demand
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poorer households are more likely than richer ones to spend most of
their income.

Research published by the Canadian Centre for Policy Alternatives in
2018 found that the eighty-seven richest families in Canada held as
much wealth as the bottom 12 million Canadians combined.

In turn, failing to tax the rich means governments are forgoing
revenue that could be put toward badly needed, highly productive
public investments in infrastructure, housing, and childcare.

Investment in infrastructure
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transit
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productivity, and incomes. Investment in affordable housing, which
eases housing shortages and contributes to lower rents, is not only
good for renters but also for businesses that struggle to recruit
workers who can’t find affordable homes close to work. The benefits
of universal public childcare
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women’s labor force participation are widely recognized
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Epidemiological evidence from across rich societies also shows that
higher inequality worsens a wide range
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health and social outcomes, including life expectancy, infant
mortality, rates of mental illness, and social trust. The effects of
high inequality on health appear to extend even to the affluent within
a country, such that
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equal place benefit everybody, not just the poor.” Extreme
inequality is also corrosive to democracy, with a growing body of
political science research showing that income and wealth
concentration has a distorting influence
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outcomes
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Despite this evidence, both federal and provincial governments are
signaling their intention to squeeze social spending in the face of
deficits, which would be devastating to Canadian society and economy.

Strengthening the public sector is essential to rebuilding Canada’s
social fabric and withstanding external threats, including US
protectionism and annexation rhetoric. A wealth tax could help create
the fiscal space for urgently needed public investment.

A Wealth Tax on the Superrich Has Public Support and Global Momentum

Astriking fact about a wealth tax is that 80 to 90 percent of
Canadians across
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the idea in public opinion polling. Even many socially minded wealthy
Canadians are on board, with groups such as Patriotic Millionaires
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Movement
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for higher taxes on the wealthy — i.e., themselves. The same is true
internationally, with polling showing strong global
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support for taxing the rich across a wide range of countries,
including in polling
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countries.

 

Last year, the Brazilian presidency of the G20 commissioned a report
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California, Berkeley, economist Gabriel Zucman, which lays out a
proposal for a minimum tax on billionaires’ wealth. The G20 report
is part of a rapidly growing body
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research
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that wealth taxes
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superrich are technically feasible
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beneficial
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Brazil, Germany, Spain, and South Africa have been at the forefront of
the push for a wealth tax within the G20, with their finance
ministers penning
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joint statement of support last year. While there is momentum, there
are holdouts such as the United States — despite strong public
support
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polling and with prominent wealth tax proposals from senators
Elizabeth Warren and Bernie Sanders.

The good news is that individual countries can take effective action
both unilaterally and as part of an emerging coalition
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the willing. Canada should join
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effort to push the G20 wealth tax agenda forward and help lead that
coalition of the willing by implementing a robust, modern wealth tax.

What a Wealth Tax Could Raise

Consider an annual tax on the net wealth of families with rates of 1
percent above $10 million, 2 percent above $50 million, and 3 percent
above $100 million. This means the first $10 million of any family’s
wealth is entirely unaffected by the wealth tax. Based on modeling of
the first year of this wealth tax, the bottom 99.4 percent of
Canadians would pay nothing, while only the richest 0.6 percent would
pay any amount. This means that only roughly one hundred thousand
families across the country would pay any amount under the wealth tax,
with ten thousand wealthy enough to fall into the second-highest
bracket and 3,700 in the highest bracket.

This narrow tax on the wealthiest few would raise an estimated $39
billion in its first year, $62 billion by its tenth year, and $495
billion cumulatively over a ten-year window. These are net revenue
estimates after deducting a generous $795 million in the first year
(and rising) for enforcement, while accounting for levels of tax
avoidance and evasion at the high end of estimates from recent
economic research on wealth taxes. Revenue estimates use the
Parliamentary Budget Officer’s High-net-worth Family Database
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of the wealth distribution, along with Statistics Canada and PBO data
to project for future years.

Notably, these tax rates would be expected to only slow the
accumulation of the fortunes of the superrich, rather than erode them.
Indeed, the estimated revenues continue to rise over the ten-year
window. But given the threat that extreme concentrations of wealth
pose to our democracy and economy, additional brackets and higher
rates — capable of putting a lasting dent in those fortunes —
should also be considered. For example, the US wealth tax proposals of
senators Elizabeth Warren
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Sanders
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rates as high as 6 percent and 8 percent on billionaires. Still, the
more modest rates proposed here may be a sensible place to start for
Canada, particularly if acting as a first mover.

Note: Tax on the net wealth of families of 1% above $10 million, 2%
above $50 million, and 3% above $100 million.

Making a Wealth Tax Work

Akey question that arises when considering a wealth tax is whether it
can be effectively enforced. There is no doubt that corporations and
the wealthy have proved adept at avoiding and evading their tax
obligations in recent decades. But leading experts
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havens emphasize
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“not a law of nature but results from policy choices” — and
better policy choices can be made if there is political will.

_Key design features for an effective wealth tax:_

The growing body of economic research on wealth taxes finds that they
can be effective and enforceable if they are well-designed. Unlike
some older experiments with wealth taxes, modern wealth tax proposals
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a few key and well-understood design features that minimize avoidance
and evasion.

First, a well-designed wealth tax must have a comprehensive base,
applying to all types of assets equally (rather than exempting certain
types of assets such as real estate, which would make tax avoidance by
shifting between asset classes easy and likely). Second, a wealth tax
should be narrowly targeted on the superrich, excluding
upper-middle-class households that may find it more onerous to make
payments if their largest assets are illiquid. This also ensures that
enforcement efforts and resources can be focused on the richest few.
Some older
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wealth taxes had poorer designs on both of these fronts, with too many
exemptions for certain asset types and applying too broadly into the
upper-middle class.

Third, an effective wealth tax must make use of extensive third-party
reporting of assets particularly from financial institutions, rather
than relying too heavily on self-reporting as in the case of some
older wealth taxes. Fortunately in Canada, the key infrastructure for
third-party reporting is in place because financial institutions must
already report to the Canada Revenue Agency (CRA) about their account
holders’ incomes, including capital gains income generated from
assets. Employers, businesses, and other institutions similarly have
obligations to report key information to the CRA. The recent expansion
of beneficial ownership registries at the federal and provincial level
will also help track asset ownership.

 

Third-party reporting should be complemented by the credible threat to
the superrich of a lifestyle audit
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the CRA. Those found to be engaging in tax evasion, as well as
financial services providers that facilitate that evasion, should be
subject to significant penalties. My modeling of wealth tax revenues
already deducts a generous $10 billion over ten years for use in
enforcement and administration.

_But will the wealthy move their investments — or themselves —
abroad?_

One concern is that a wealth tax might lead to people shifting
investments abroad, but the design of the tax avoids this concern. For
Canadian residents, the tax applies to their total net worth above the
threshold, regardless of where those assets are invested, so shifting
investment abroad offers no tax advantage. For foreign investors not
in the jurisdiction of the tax, incentives to invest in Canada remain
unchanged (though the incentive of the very wealthy to _move _to
Canada would be affected). Moreover, because it targets (very large)
existing stocks of wealth, rather than the flow of income or the act
of investment, a wealth tax avoids disincentive effects associated
with taxes on productive activities.

What about (illegal) attempts to hide assets abroad specifically to
evade the tax? Fortunately, international tax cooperation and
information sharing have taken major strides in recent years. Under
the Common Reporting Standard
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by the OECD and enacted in 2017, “more than 100 countries have
agreed to automatically exchange financial account information,”
including jurisdictions long recognized as tax havens such as
Switzerland, Luxembourg, the Cayman Islands, and Bermuda. And it’s
working. The Global Tax Evasion Report 2024 finds
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“offshore tax evasion has declined by a factor of about three in
less than 10 years.” The Common Reporting Standard continues to
evolve and improve each year, and though the United States remains
outside this system — while having its own reporting requirements
— the ability to track offshore assets has become significantly
stronger.

Another concern is that the wealthy themselves may move abroad in
response to a wealth tax. Even if some do, that does not mean they can
avoid the wealth tax. To reduce the incentive, either a substantial
exit tax can be imposed (e.g., at 40 percent as in Elizabeth
Warren’s proposal
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wealth tax obligations can continue to be applied after expatriation
for a set number of years, as proposed in analysis
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Wealth Tax Commission. This would be a fair recognition of the broader
society’s contribution to creating and enabling these fortunes.

Research suggests
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type of flight of the superrich is less common
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one might expect and modest [[link removed]] in
its economic effects. After all, a household’s connection to a
country is driven by many factors other than tax policy such as
family, social ties, and even patriotism. As mentioned above, there
are now many wealthy households in Canada and around the world
publicly campaigning
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taxing the rich. As for those among the extremely wealthy who remain
intensely resistant to chipping in to build a stronger and more just
society, we might be better off if they choose to leave. We can focus
instead on unleashing the talents and productive potential of
Canadians who care about building the country.

A recent Oxfam
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estimates that the richest 1 percent now ‘own more wealth than 95
percent of humanity.’

If there is progress among a coalition of the willing of the G20
countries toward creating an internationally coordinated wealth tax,
the prospects for effective enforcement will be even stronger. Last
year, G20 finance ministers pledged
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“engage cooperatively to ensure that ultra-high-net-worth
individuals are effectively taxed,” and there is a push to make
further progress this year. The progress to date in reducing tax
evasion through the Common Reporting Standard shows that international
cooperation is not only possible but can yield results quite rapidly.

Nevertheless, to add a layer of conservatism to my revenue estimates,
I reduce the wealth tax base by 16 percent to account for any
behavioral responses to the introduction of the tax including
avoidance and evasion. This behavioral response factor is on the high
end of the estimates in the economic literature, aligning
with estimates
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economists Gabriel Zucman and Emmanuel Saez for Warren and Sanders’s
wealth tax proposals. These economists observe that avoidance and
evasion levels could be even lower with a well-designed wealth tax and
effective enforcement measures, noting
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“evasion depends on the design of the wealth tax and the strength of
enforcement.” Other research suggests a lower range for behavioral
responses, such as the estimate of 7 to 17 percent in analysis
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the UK Wealth Tax Commission. A proposal by economists for
a Europe-wide
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tax also suggests a lower behavioral response rate.

Tax the Superrich, Build the Future

Awealth tax on the superrich would be a strong step toward reinvesting
in Canada. It could both raise funds to help reverse decades of
underinvestment in our physical and social infrastructure and begin to
tackle the extreme concentration of wealth that’s fraying the
country’s social fabric and distorting its democracy.

At nearly half a trillion dollars over ten years — the revenue from
a wealth tax alone could fund a suite of transformative national
projects, including:

* Capital grants to enable 100,000 new nonmarket homes per year
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* Major new investments in public transit
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and operations.
* A multibillion-dollar expansion of public childcare
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* Universal public pharmacare.
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* Large income transfers to reduce poverty
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homelessness
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These types of investments would not only help create a stronger
society where far more Canadians have a decent, secure life, but also
have significant long-term benefits
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growth and productivity.

 

Creating affordable homes for hundreds of thousands of workers would
allow them to access higher-wage jobs in cities that have long
excluded them, helping workers and businesses alike. Transit
investment would reduce costly traffic congestion and increase
mobility and job matching between workers and employers. Public
childcare investment would help ensure parents of young children are
free to stay in the labor force if they choose. Universal public
pharmacare would be far more efficient than fragmented privatized drug
insurance with its huge administrative duplication across corporate
insurers. Ensuring Canadians enjoy a basic standard of security and
income would help unleash the potential of millions of people to make
the contributions they want to their communities and economies.

Of course, a wealth tax is not a panacea.

To reduce inequality and create a fairer tax system, more policy
action is needed to make large corporations pay their share, as well
as to end the preferential treatment of capital gains
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which is taxed at half the rate of the wages and salaries earned by
most Canadians. A more just and resilient
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would require strengthening workers’ ability to organize in unions
and expanding opportunities to create democratic employee-owned
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Solving the housing crisis would require ending the apartment ban
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by big cities on most of their land so that we can actually
build nonmarket
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at scale and end the overall shortage of housing supply
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A wealth tax can help Canada set its own course distinct from the
colossus to the south.

It provides the opportunity to ensure that working-class people who
create this country’s wealth actually share in it. Given its
popularity across
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wealth tax also has the potential to bring the vast majority of
Canadians together
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a time when our society is at risk of falling into the type of deep
polarization that exists in the United States.

If Canada instead pursues austerity and underinvestment in the public
good — and there are worrying signs of this from federal and
provincial governments — the result will be a diminished society and
a weakened ability to withstand external threats.

A wealth tax makes it clear: the country is not facing a bare
cupboard. Canada possesses the resources and the choice to
collectively invest in this country’s future. It also has the
opportunity to lead — by designing a modern, best-in-class wealth
tax and joining the growing international coalition
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to taxing the ultrarich. It is a moment worth seizing.

Adapted from BC Society for Policy Solutions
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_ALEX HEMINGWAY is a senior economist and public finance policy
analyst for BC Policy Solutions, a new progressive think tank._

_JACOBIN is a leading voice of the American left, offering socialist
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is released quarterly and reaches 75,000 subscribers, in addition to a
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