Can an individual person ever really have too much money? It would appear so.
At a certain point during her recent globe trotting super tour, Taylor Swift stopped disclosing ticket revenue numbers. It’s not clear exactly why, but the prevailing theory is that she was simply making too much money. Tickets were getting hecka expensive, and money was pouring in by the truckload, to the point where it actually became a bit of a bad look for Taylor to be making that much dough. Music industry experts figure Swift was making around $13 million per concert, and likely banked a cool billion dollars by the time the tour finished.
So yes, it seems a person can have too much money. But what about a corporation? The entire reason a corporation exists is to make money for its shareholders. So how can “excess profits” exist for a corporation? On paper, it seems like it can’t. Even the phrase itself – excess profits – reads like an oxymoron. How can profit be in a state of excess when profit is the entire purpose.
It’s like saying a golfer made too many holes-in-one, or a surgeon removed too many tumours, or my daughter has too many stuffed Pokemon toys; it’s impossible.
So at first glance, when people are annoyed that the federal budget released this week doesn’t include the much talked about “excess profit tax” it seems like, well whatever, that doesn't make much sense anyway.
But here in Canada, I think it does make sense in certain industries where, for a variety of complicated reasons, we don’t really have competition between businesses, we just have a couple massive companies happily dividing up the pie in big fat chunks.
When it comes to grocery stores, wireless communications providers, and banks, we as Canadians don’t have a lot of choice, we have oligopolies in those industries, and because of that they each make eye-watering amounts of profit.
Companies like Loblaws and Rogers are profitable to a degree that is not particularly helpful, unless you are the guys at the very, very top, in which case it helps you buy a fourth yacht in Saint Barths.
Which is why, even though “excess profits” seems like a thing that can’t exist, an excess profit tax in a select few industries in Canada is a good idea that would shift the tax burden in the right direction. Unfortunately, those big three industries also enjoy a very cozy relationship with our federal government, so the chances of an excess profit tax becoming a reality are pretty slim.
The federal budget wasn’t a complete bust though. The hike to capital gains inclusion rate for wealthy Canadians is a smart move.
The hike to capital gains inclusion rate for wealthy Canadians is a smart move
Some people will tell you that it’s unfair, but the long and short of it, from my perspective, is very simple: if you pay any capital gains tax, you probably have enough money to pay a little more. Most regular dudes don’t even know what a capital gains tax is. If you’ve ever paid capital gains tax, you’re probably not a regular dude, and that’s who needs help in this country right now, regular dudes. The dudes paying capital gains tax, they’re doing fine, they don’t need a hand.
I think we should even go a step farther and just have a luxury brands tax. Buying a Louis Vuitton handbag? Luxury tax. Picking up a new Rolex? Luxury tax. Ordering tickets to a Maple Leafs playoff game? Luxury tax. Anyone buying any of those things can take the hit.
Alas, another missed opportunity for the federal budget. Same thing with the housing incentive money that was proposed by the Conservatives but didn’t make it into the budget.
The proposal was to basically hold federal infrastructure funding hostage unless cities permit 15 percent more home building each year.
One of the biggest hurdles to getting houses built is NIMBY city halls, and Niagara is notorious for having the NIMBiest of NIMBYs. Getting a condo built in Niagara is a Sisyphean task, a war of attrition between developers and councillors, one that usually ends with a lengthy legal battle at the Ontario Land Tribunal.
So how do you change that? Well, like Jack Donaghy said, there are only two ways to motivate people, fear or money, and in this instance, the feds are holding the purse strings to the infrastructure money the cities needs, so why not use it to solve the NIMBY issue and force their hand when it comes to allowing more housing.
All of those issues aside, the real failure of the federal budget was yet another missed opportunity: asking Taylor Swift for some cash because apparently she now has all the money.
James Culic is more of a K-Pop and Kanye type of music guy. Find out how to yell at him at the bottom of this page, or calculate your own brilliant budget ideas and send them in a letter to the editor.