Today the CCPA published a great blog post on the land wealth inequality. Using publicly available data from Stats Canada and the Canadian Revenue Authority, Alex Hemingway documents how the rich get richer. This is a BC based analysis of how the boom times have enriched the top 20%, or the top 5% even more.
The concentration of wealth in relatively few hands is difficult to swallow in an allegedly 'democratic', egalitarian country. The top 20% by net worth own 62% by value of all the real estate designated principal residences; and 80% of all the other real estate (presumably rental, commercial, and industrial).
On the flip side, the 60% with lowest incomes own only own only 13% of the value in principle residences.
When property values escalate it is clear who gains. In 2016, Hemingway notes, Vancouver single family properties jumped $47B in market value, roughly equal to the entire provincial budget in that year. We can estimate that 62% of that or $29B went to the wealthiest 20% of households - and most of it 'tax free'. (@$6B went to the bottom 60% of households!)
The post notes that this inequality is the result of tax treatment, and Hemingway endorses the new speculation tax and new school tax that will require higher value landowners to pay more. He suggests implementation of a progressive property tax. Yes, these are good measures, but we should also place a cap on the capital gains tax exemption for principal residences.
The existing tax regime benefits the wealthy because they pay attention and lobby. Ordinary people have to push for a fairer system. It is possible to get this tax question on the table for the next Federal election. It did come up last year.
This item from policynote.ca is a call to action for those of us who want to challenge the status quo. The Provincial government has done the right things so far, but there is more to do.