Brian Topp released his tax package today, which demonstrates why I prefer him in the NDP leadership race, FROM a Liberal perspective. This document should win rave reviews from the NDP faithful, Topp stands on proven grassroots ground, class warfare and redistribution of wealth in aggressive fashion. In terms of the NDP leadership race, a good release for Topps, but in terms of a party who will need to capture moderate Canada if it ever hopes to form government, this document casts a narrow net that will most likely alienate.
The idea of a growing gap between rich and poor, to my mind, is a fact, not an argument. Topp's initial assumptions are correct, and I do believe there is a fertile audience for the idea of fairness and more equity within our society. However, it is Topp's remedies, PARTICULARLY going after capital gains, that will turnoff many in the middle class, the group he supposedly champions with this release.
Stock options, check, Topp does make sense on this score, they've become a loophole for a small group of the wealthy insiders, an "option" which is routinely abused. Reversing some corporate taxes, a very credible argument that the current regime is out of balance, we have tilted to far, the promised investment hasn't materialized even while corporations post record profits. Another tax rate for those making 250000 or more, maybe, although I MUCH, MUCH prefer consumption taxes here, which address income indirectly and efficiently: the more you make, the more you spend, the more you pay. Where I fall completely off the Topp train is this idea of going after capital gains, and I believe this proposal will come back to haunt the NDP, should Topp win the leadership.
Topp uses RRSP's to show how capital gains are somewhat unfair. What he doesn't come close to understanding, RRSP's provide a tax shelter- as well as contributions LOWERING your taxes at time of investment- until which time you need the money, which is normally done at an optimal time, wherein this is a sole source of income, taxed accordingly. In other words, there are PLENTY of advantages to an RRSP that you don't receive with capital gains, to such an extent, singling out capital gains as unfair is just BAD MATH.
Middle class Canada understands capital gains, it isn't the domain of fat cats in ivory towers. Sure the rich benefit from capital gains, but so does anyone who invests outside of other options, so do people who have the misfortune of losing their parents, so do parents who want to leave their accumulations to their children. Many Canadians hate capital gain taxation, if Topp thinks this measure has no relevance to middle class Canada, I suspect he's in for a surprise. Just look at the overwhelming success of TFSA's- well BEYOND the government's projections- and you'll see ORDINARY people are looking for ways to get around capital gains. This measure, I predict, will go over like a lead balloon and provide EASY fodder for opponents to bludgeon the NDP.
With this package, Topp may well win the battle, but I can't see how he wins the war. The fact he doesn't embrace any consumption taxes is old thinking, which does nothing to show Canadians the NDP are widening their appeal IMHO.