OTTAWA — Brian Topp is boldly going where most Canadian politicians fear to tread: promising to make the wealthy pay more in taxes.
The perceived frontrunner in the NDP leadership race wants his party to make higher income taxes for high-income earners a key plank in its next election campaign platform.
He told The Canadian Press he intends to unveil a detailed proposal in the weeks to come.
“I will be talking about income taxes and I think it’s time for our party to step up to that plate and to be pretty clear about that because then we’ll have a mandate to act if we’re elected,” Topp said in a wide-ranging interview.
He also called for a hike in corporate taxes and did not rule out a sales-tax increase “at some point,” once the fragile economy is on surer footing.
Calling for higher corporate taxes is a staple of NDP election platforms and is relatively safe ground politically. Even the Liberals, during last spring’s federal campaign, promised to roll back a 1.5-percentage point reduction in the corporate tax rate, which took effect last Jan. 1, and to defer another 1.5-point reduction planned for next year.
But it’s been decades since any Canadian politician dared talk about raising income taxes. Indeed, since the 1990s, taxes have been steadily reduced and parties have competed for the title of biggest tax slasher.
Finance Minister Jim Flaherty was quick off the mark Friday in dismissing Topp’s proposal as “one of those dreamy ideas . . . that don’t make any sense.”
He said middle-class Canadians pay the bulk of income taxes in Canada and hiking taxes on the top one per cent of income earners wouldn’t “produce the volume of revenue that you need to run a country.”
“If anyone thinks . . . in the United States, Canada, Europe (that) you can tax the one per cent or .5 per cent and raise a lot of money, it’s nonsense.”
However, the notion of making the rich pay more has gained currency recently as debt crises in the United States and Europe threaten to tip the world into another deep global recession.
U.S. President Barack Obama last month proposed $1.5 trillion in new taxes aimed primarily at the wealthy, including setting a minimum tax on those making $1 million or more in annual income. The latter measure has been dubbed the “Buffett rule,” after billionaire investor Warren Buffett, who has railed against the fact he pays a lower rate of tax than his secretary.
The yawning gap between rich and poor has also been at the root of the “Occupy Wall Street” movement, which spawned protests last week in Canada and around the world.
Statistics Canada says the top one per cent of Canadian earners took home 11 per cent of total income in 2009.
Topp said the billions in tax breaks for profitable corporations and wealthy individuals would be better spent on helping people who are struggling to get by.
“I think the goal of aiming for the lowest corporate taxes in the industrialized world is feckless,” he said, adding that “there are many other things that are more important first,” including health care, social housing, public transit and municipal infrastructure.
“This is a grossly inefficient expenditure of public money on a completely inappropriate priority … I think tax expenditures aimed at high-income individuals are another inappropriate priority and some of those expenditures should be redeployed.”
Topp, a former party president and key architect of NDP electoral gains under late leader Jack Layton, did not define what he means by high-income earners. Nor would he elaborate on how much more he’s prepared to make them, or corporations, pay.
He said he’s currently “putting the finishing touches” on some policy statements which will address those issues “in some detail.” However, his use of the term tax expenditures suggests he’s looking at eliminating some of the exemptions aimed at wealthy Canadians.
In a recent posting on his Globe and Mail blog, Topp floated the idea of a high-income surtax or creation of a new top-tier income tax bracket, as well as doing away with “loopholes and giveaways that embarrass even American billionaires.”
His views were greeted cautiously Friday by New Democrats, including leadership rivals Thomas Mulcair and Paul Dewar.
“We need a well-thought-out plan to make the tax code simpler and more progressive,” Mulcair said in an email message. “I’ll have more to say on this issue later in the campaign.”
Dewar echoed Topp on corporate taxes, but didn’t directly address the income tax issue.
“I support rolling back Conservative tax breaks for large, profitable corporations but I can’t support a policy that would squeeze ordinary people,” Dewar said in a statement.
“I have not yet seen Mr. Topp’s proposal but I am concerned by any suggestion that we raise sales taxes. We know that they only serve to increase the cost of living on families.”
NDP MP Peter Stoffer said Topp’s proposal is “worthy of debate.”
But Topp’s frank views on taxes risk giving ammunition to Prime Minister Stephen Harper’s Tories, who delight in casting the NDP as wild-eyed socialists who would break the national treasury and ruin the economy.
Topp said it’s the Tories who “engineered” much of Canada’s current financial woes by “over-exuberantly over-investing in tax benefits for profitable companies and for high-income individuals, who are folks who don’t need help in this economy.”
He said the key to winning the next election will be proving that the NDP can be fiscally prudent economic managers while meeting the challenges of health care, climate change and restoring Canada’s “good name in the world.”
Topp stressed his own credentials on that score, saying he’s driven by his “searing experience” as deputy chief of staff to former Saskatchewan NDP premier Roy Romanow. He recalled how Romanow, having inherited a province teetering on the brink of bankruptcy, was forced to plead with securities traders not to downgrade the province’s bonds.
Topp recounted meetings with “20-year-old bond analysts” who questioned the amount of money the Romanow government was spending on health care.
“At that moment, that kid had as much power over health policy in Saskatchewan as our legislature did. That cannot be permitted to happen and no committed social democrat will let the public interest be enslaved to debt as our (Conservative) predecessors in Saskatchewan did.”
The Tories will undoubtedly launch a negative campaign against Topp should he win the March 24 leadership vote. They used such campaigns to successfully demolish the last two Liberal leaders, Stephane Dion and Michael Ignatieff, and have already started painting the NDP in general and Topp in particular as puppets of big unions.
Mulcair has suggested his feisty and combative style makes him better suited to take on Harper than the mild-mannered Topp, who’s never held elected office.
But Topp maintained that responding in kind to the Tories’ hyper-partisan mudslinging is precisely the wrong approach. The Liberals tried it, he noted, and were reduced to a third-party rump.
In his view, the Tories’ strategy is aimed at energizing their own base while so disgusting other Canadians that they don’t bother to vote. The best way to counter that is to “offer a much more hopeful and optimistic vision of the future” — much as Layton did in last spring’s campaign, with historic results.