Last week, the Quebec government announced a handful of measures designed to, among other things, encourage companies to keep their head offices in the province. The predictable response from certain quarters: The rich need to fund more, not less, of our public expenditures through higher taxes.
The measures announced include tax relief for the transfer of businesses to family members, tax payment deferrals when selling shares of a listed company, and raising the tax deduction for capital gains from 25 to 50 per cent, bringing it in line with the rest of Canada. There's also a task force to monitor markets and try to prevent hostile takeovers of Quebec companies.
While the business community overwhelmingly applauded the announced changes, several prominent Quebec politicians condemned them. The Leader of the Official Opposition, Jean-François Lisée, said that Quebec Premier Philippe Couillard was giving the wealthiest members of society a "gift." Québec solidaire MNA Amir Khadir, for his part, thought that the changes showed that the government was working "for a minority of exceptionally wealthy people."
Regardless of the specific merits of each of the measures announced, some part of the predictable opposition aroused by them is due to a knee-jerk, anti-rich bias that remains all too common. Some of this bias is itself due to the notion that the wealth of the rich comes at the expense of the poor. Yet nothing could be further from the truth.
In the past, it's true, conquest was often a source of riches, and these were indeed stolen from the conquered. And today, crony capitalists who survive on government handouts and privileges are guilty of a form of legalized theft of taxpayers' hard-earned cash.
But to assume that the poor always suffer when the rich get richer is to assume that there is a fixed amount of wealth in the world, a fixed pie. There isn't, and much of the wealth that exists today was created, without harming anyone, through hard work and innovation.
The CEOs of companies that provide the best goods and services they can, at prices people want to pay, are not robbing anyone. On the contrary, by running successful companies, they are providing value for a wide range of people, including their customers, their employees, their suppliers and their investors. The fact that they themselves should share in the wealth they've created is entirely appropriate.
And it's not as if the wealthy did not already pay a disproportionately large amount of taxes. According to the latest edition of the Bilan de la fiscalité au Québec, the richest one per cent of taxpayers may earn 10 per cent of total income, but they pay 17 per cent of all personal income tax collected by the provincial government.
Having competitive tax policies that encourage wealthy individuals who own and run businesses to keep those businesses here — and keep paying taxes here — is good for all Quebecers. It helps grow the pie, and when the pie gets bigger, everyone can end up earning bigger and bigger slices.
Those who still think that with a growing pie and bigger slices for all, that some slices are just too big and no one should have them, are not really concerned about helping the less fortunate. They are more concerned with keeping the rich from buying that second SUV and stoking people's envy, which contributes nothing constructive to serious discussions of public policy.
Jasmin Guénette is Vice President of the Montreal Economic Institute. The views reflected in this op-ed are his own.
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