Adapted from the new book “Cancelling Billionaires Before They Cancel Us: The Urgent Case for a Wealth Tax,” published by Dundurn Press.
With billionaires dominating the landscape as never before, it has perhaps been inevitable that these moguls would find themselves in a showdown with the struggling masses. So it’s not surprising that some of California’s fabulously wealthy billionaires are threatening to bolt out of the state in the face an initiative to put a wealth tax onto a statewide ballot. This would allow California voters to decide whether to tax the mega-fortunes of some of the world’s most privileged human beings.
The California initiative suggests there’s growing resentment against today’s stupefyingly large wealth accumulations — Elon Musk is now close to being a trillionaire, with a net worth of $726 billion (U.S.) — as well as mounting popular frustration over the failure of elected officials to tax these grand fortunes.
Indeed, California Gov. Gavin Newsom, a leading contender for the 2028 Democratic presidential nomination, is vehemently opposed to the wealth tax initiative being organized by California health care workers belonging to the Service Employees International Union. Newsom also happens to be friends with a lot of prominent billionaires, including Silicon Valley tech giants Sergey Brin and Larry Page, who are among those rumoured to be leaving.
But Newsom has made clear that his opposition is based on fears of billionaires fleeing the state, and that he might be willing to support a wealth tax at the national level — as has been proposed by U.S. Senators Bernie Sanders and Elizabeth Warren — which would be much more difficult for billionaires to escape.
All this suggests that, while Donald Trump’s return to the White House has made billionaires seem invincible, this could change. The California initiative might well be the beginning of a popular revolt in which the public demands a share of the most stupendous mega-fortunes in history.
Certainly, these fortunes have grown massively in recent decades. When Forbes magazine first published a wealth list in 1987, there were 140 billionaires worldwide, collectively holding wealth equal to 1.7 per cent of world GDP. In the latest Forbes list last year, there were fully 3,028 billionaires worldwide, collectively holding wealth that had swollen to the equivalent of an astonishing 14 per cent of world GDP.
As the superrich siphon off an ever-larger share of global wealth, they now dominate the world to a degree unimaginable even a decade ago. With their voracious consumption, unbridled resource exploitation and relentless obstruction of climate action, they are rapidly undermining democracy and destroying the very viability of the earth for human life.
Canadians tend to think of billionaires as an American problem. But the growth of fortunes has been relentless in Canada as well, and it has come at the expense of other Canadians. According to the investment bank Credit Suisse, the wealthiest one per cent of Canadians increased their share of total Canadian wealth from 18 per cent to 26 per cent between 2010 and 2019, while the share of wealth owned by every other income group in Canada declined.
Yet Canadians have only a vague idea of how truly lopsided our wealth distribution is. That’s because, although Ottawa carefully tracks virtually every aspect of the Canadian economy, it keeps no statistics on the money at the very top — which suits the wealthy just fine. Without official data, the cavernous gap between rich and poor largely disappears as an issue and a problem to be addressed.
Canadians are also mostly unaware of the extent to which the ultra-wealthy are able to avoid paying taxes. Indeed, while Canadians at almost every income level pay a substantial portion of their incomes in tax, billionaires do not. The income tax is not an effective tool for taxing them, since they can finance their lavish lifestyles by borrowing money (using their wealth as collateral), rather than cashing in stock, which triggers a taxable capital gain.
That’s why a wealth tax is needed. But we want to emphasize that the wealth tax we are proposing would only apply to the ultra-rich — that is, to a person with a fortune of more than $25 million. This isn’t the top one per cent, but rather the top 0.1 per cent, which is the top one-tenth of the top one per cent.
So think of those who would be subject to the tax as members of a very exclusive club — a club so exclusive that your chances of ever gaining admission to it are almost nil. Sorry. Members only. Clearly, anyone belonging to this highly exclusive club is an extremely lucky person, often having come into that favoured circumstance due to nothing more than the skill of being born into the right family.
Our wealth tax is different than the one proposed in California, which would impose a one-time state tax of five per cent on billionaires. By contrast, our proposed tax would be an annual national tax, starting at one per cent on those with net wealth above $25 million. Given the amount of wealth at the top in Canada today, this Canadian wealth tax would have the potential to raise $40 billion a year, providing enormous funds for public programs benefiting millions of Canadians.
As CBC-TV’s chief political correspondence, Rosie Barton is known for feisty interviews. Accordingly, in her interview with NDP leader Jagmeet Singh during the 2021 federal election campaign, she took less than two minutes to deal with and then discard Singh’s campaign promise to introduce a wealth tax.
“Rich people aren’t going to let you come for their money,” she bluntly told Singh, laughing at the very idea. “They’re going to move.”
A billionaire watching would have been pleased. He didn’t even have to threaten to leave. Rosie made the threat for him.
Unfortunately, CBC viewers didn’t get to know that well-designed wealth taxes — like those proposed by Sanders and Warren — include a steep “exit tax,” which would impose a very hefty tax on those leaving. CBC viewers also weren’t told that Canada already effectively has an “exit tax.”
Wealthy Canadians moving assets out of the country are obliged to pay tax on their unrealized capital gains. When the Bronfman family moved $2.2 billion out of Canada in the 1990s, it faced an estimated $700 million in capital gains taxes. The Bronfmans were able to dodge the $700-million tax bill only because of a loophole — a loophole which has since been firmly closed, after their case drew attention to it.
In addition to a wealth tax, we argue that there should be a significant reduction in the tax benefits the wealthy receive for philanthropy.
The wealthy are treated with great public respect due to their philanthropy, even though it typically boils down to a commercial transaction in which wealthy donors are compensated by having their names prominently displayed on important public buildings and institutions.
There is a pretence that all this name-displaying is purely honorific. But occasionally the curtain is pulled back, exposing the truly commercial nature of philanthropy. For instance, wealthy donor Peter Allard paid $30 million to the University of British Columbia to have the law school named after him in perpetuity. Allard ended up suing the university in 2017 when his name wasn’t displayed as widely as he felt entitled to under the terms of the philanthropic deal he’d negotiated with the university.
In addition to the compensation of name-displaying, wealthy donors get extremely generous tax concessions — worth, in some cases, as much as 80 per cent of the total value of their donations. This means that a big part of their donations is actually paid for by the public. So, while Allard was honoured for donating $30 million to UBC, Allard’s real contribution (after taxes) was probably more in the range of $7 to $8 million, which wouldn’t even cover the cost of operating the law school for one year.
The tax benefits for philanthropy have been greatly enhanced in recent years, as the wealthy have argued that Canadian charities need their support.
In fact, there’s no shortage of charitable giving in Canada. The problem is that a huge chunk of this money is inaccessible. More than $107 billion in charitable funds are currently locked away in private foundations controlled by wealthy families, where almost all the money sits idle, year after year. (The foundations are only required to disburse five per cent of their funds annually.) Meanwhile, thousands of working charities are starved for funds as they struggle to deliver services to needy Canadians.
When private foundations do disburse funds, as required, their priorities are very different than the priorities of ordinary Canadians. And, given the heavy public subsidy involved in philanthropy, that matters.
We looked at the 50 largest private foundations in Canada and how they distributed just over $2 billion between 2018 and 2022. Only 5.8 per cent of their disbursements went to poverty relief. An even smaller share — 1.4 per cent — went to helping Indigenous people.
The vast majority of their disbursements went to universities (including foreign universities) and hospitals, and in almost every case, the wealthy donors were rewarded with their names prominently displayed on these prestigious public institutions.
There are almost 7,000 private foundations in Canada, and they have mostly become warehouses storing vast amounts of publicly subsidized funds, greatly enhancing the influence and prestige of the wealthy families that control them. These foundations should be wound down, and their massive holdings disbursed to active charities.
While a wealth tax would be fiercely resisted by many ultra-wealthy Canadians, it wouldn’t likely hurt them, or impact them much at all. Claire Trottier, who sits on the board of her family’s private foundation and advocates for a wealth tax as a member of the group Patriotic Millionaires says that, even with the tax, she and the wealthy people she knows would continue to have as much money at their disposal as they could possibly spend.
However, the tax could make a truly significant difference in the lives of millions of Canadians. By taking a modest chunk out of the grotesquely large fortunes acquired by the superrich during the most unequal era in world history, it could raise billions of dollars that could create a better-functioning democracy with a more hopeful, well-nourished and empowered citizenry.
In a rational world, the choice is obvious.
Excerpted from “Cancelling Billionaires Before They Cancel Us: The Urgent Case for a Wealth Tax” by Linda McQuaig and Neil Brooks. Copyright © 2026 Linda McQuaig and Neil Brooks. Published by Dundurn Press. Reproduced by arrangement with the publisher. All rights reserved.
