Québec solidaire (QS) has always had a very fertile imagination when it comes to taxation.
Posted at 5:00 a.m.
Four years ago, the staunchly left-wing party proposed nothing less than nationalizing all of our Tax-Free Savings Accounts (TFSAs) to fund green renovations. Even if the ecological objective was laudable, this election promise simply did not hold water.
The same goes for his new proposal to tax millionaires, which nevertheless achieved a rare feat: agreeing François Legault, Dominique Anglade, Paul St-Pierre Plamondon and Éric Duhaime.
The four chiefs are against! And they are right.
Of course, the wealthy have to contribute. But it’s all in the way. By brandishing the idea of a tax on large fortunes and on large estates, solidarity is missing the target.
First, let’s talk about QS’s wealth tax. Taxpayers would have to pay tax of 0.1% each year on their assets over $1 million, 1% over $10 million and 1.5% over $100 million.
The measure targets the “ultra-rich”, according to Gabriel Nadeau-Dubois. But beware: this label may stick to more Quebecers than you think.
For example, when we calculate the actuarial value of pension plans, there are quite a few public service employees who are millionaires without knowing it.
There are also a lot of “rich” among the owners, when we know that a building with a median income is worth more than $800,000 on the island of Montreal.
However, some owners who have lived for a long time in a neighborhood that has become gentrified do not necessarily have such high incomes. Already they are struggling to pay the hefty property tax bill. You don’t need to add a layer.
It was also rushing in the stretchers at the farmers. So much so that Gabriel Nadeau-Dubois was forced to backpedal, saying that agricultural land would be exempt.
Now let’s take a look at the large estate tax which would amount to 35%, after an exemption for the first million bequeathed, according to the QS proposal.
The party emphasizes that 24 of the 37 countries in the Organization for Economic Co-operation and Development (OECD) have an inheritance tax, but we don’t. It’s true. But that does not mean that there is no tax to pay on death. On the contrary.
When a Quebecer dies, his estate must pay tax on the capital gain, i.e. the capital gain realized between the time of purchase and the time of death on the property that the deceased owned (except exception, such as the principal residence).
Capital gains tax was introduced in 1972 in Canada to replace inheritance tax. All the provinces followed suit.
Today, Canada is outright the greediest country in the OECD when it comes to wealth taxes, which not only include taxes on assets and inheritance, but also property taxes and real estate transfer taxes. .
Quebec also has long teeth. In our country, property tax represents 3.6% of GDP, practically double the OECD average (1.9%), according to the Bilan de la taxation au Québec of the University of Sherbrooke.
No need to add more.
This would be detrimental to family businesses that want to pass the torch to the next generation, and not be forced to sell to a foreign company.
If Quebec wants to tax the rich more, it should rather imitate Ottawa, which announced, in its last budget, a tightening of its alternative minimum tax. Through this mechanism, the tax authorities ensure that taxpayers cannot maximize tax credits and deductions to the extreme in order to pay only dusty taxes.
Before raising taxes, which are already high in Quebec, let’s make sure everyone pays their fair share. Without trickery.