The return of extra wealth tax propisitions isn’t a good encore for anyone

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I’ve been debating whether I should take one last trip to see the Eagles at the Sphere in Las Vegas before they finally call it a career. Earlier this year, drummer Don Henley said 2026 was probably the band’s last, but they recently added the Sphere shows in January.

Final and one-time are flexible words in both rock and roll and in tax policy. Keep that in mind as British Columbians head to the polls on Saturday, with the B.C. Green Party promising a one-time wealth tax on the province’s richest households plus an annual tax.

Why pay attention to a party polling in single digits? Because polls point to a close race, allowing the fringe to set the agenda. The Greens already propped up the NDP’s one-seat majority through a 2024 cooperation accord, and now they’re recycling old ideas. The wealth tax is the oldest of them.

Under the Greens’ Fair Share Act, the one-time tax on net wealth would be five per cent above $50 million, 10 per cent above $100 million and 20 per cent above $1 billion, which the party estimates would raise $22.2 billion.

The proposed annual wealth tax would follow at two per cent, three per cent and five per cent on the same thresholds, raising an estimated $5.4 billion a year that less than 2,500 households would pay.

The party’s FAQ greets readers with the saucy “Congratulations, you won capitalism!” That raises an obvious question: what if those winners simply leave?

Its answer is that the levy would retroactively apply to the previous tax year, catching anyone who moves once the tax is announced. Households worth more than $50 million that move out of B.C. would pay an exit tax, which the Greens compare to the departure tax Canada charges people who emigrate.

Think of it as B.C.’s own Hotel California: the wealthy can try to check out, but they can never quite leave.

The Greens are also planning an annual sequel before the first act ends. The federal government in 2022 did the same with the ridiculously named Canada Recovery Dividend, a one-time 15 per cent tax on the average 2020 and 2021 taxable income of banks and life insurers above $1 billion. It arrived alongside a permanent 1.5 percentage point surtax.

The federal budget’s roughly $4-billion estimate for the dividend fell to about $3 billion once the legislation was drafted.

History has already graded wealth taxes. According to the Organization of Economic Co-operation and Development, 12 member countries levied net wealth taxes in 1990. By 2017, only four did.

France scrapped its tax effective 2018 after hundreds of wealthy taxpayers left each year. Norway raised its rates in 2022, pushing 300 or so multimillionaires and billionaires to move to Switzerland by 2024. Inside Norway, the municipality of Bø cut its local wealth tax rate to attract the wealthy.

Canada has its own COVID-19-era evidence. The Parliamentary Budget Officer in 2021 priced a Liberal MP’s far gentler one-time levy that called for a three per cent tax above $10 million and five per cent above $20 million. It assumed 15 per cent to 20 per cent of the wealth would be avoided, relying on research co-authored by Berkeley economist Emmanuel Saez, who has since endorsed the Greens’ plan. It warned that much of the wealth is tied to businesses that “can’t easily be sold.”

The Prime Minister’s Office (PMO) then requested a note on the merits of the policy. The resulting memo to the PMO called it “a complex issue,” with the government’s own analysis redacted, according to documents released under access to information requests. No federal wealth tax followed. The Greens’ top rate is four times higher.

California is the original hotel. Its proposed one-time five per cent tax on billionaires goes to voters on Nov. 3. At least six billionaires, including Larry Page and Peter Thiel, reportedly cut ties with the state before Jan. 1, 2026, the residency date that determines who would pay.

The Greens’ FAQ calls capital flight a “mostly-empty threat.” Yet it needs a retroactive levy and an exit tax. You don’t lock the doors against an empty threat.

Nor is a provincial exit tax comparable. The federal departure tax taxes gains already accrued, subject to a variety of exclusions, and lets departing taxpayers post security instead of paying immediately. A move from Vancouver to Calgary triggers none of it, and provincial income tax already follows wherever you reside on Dec. 31.

A provincial exit tax raises serious legal questions. The constitution limits provinces to “direct taxation within the province.” The charter guarantees the right to move to and live in any province and offers no cover to laws that discriminate primarily by province of present or previous residence.

The Greens’ FAQ is silent on how residency would be defined and how illiquid assets would be valued.

The math matters to anyone who owns a business, farm or investment portfolio. A two per cent annual wealth tax on an asset earning five per cent takes 40 per cent of the return before income tax. At five per cent, it takes all of it before inflation, and it’s due even when the asset falls in value.

Assets get sold, investments go elsewhere and employees and suppliers feel it when that bill lands on illiquid wealth. The top one per cent of earners paid 22.1 per cent of all income taxes in 2023.

Don Henley once famously said the Eagles would reunite when hell freezes over. They did in 1994.

The Greens’ wealth tax won’t wait for hell to freeze over. Its one-time levy is just the opening act for an annual wealth tax with no farewell in sight, backed by a $22.2-billion estimate its FAQ never explains and an exit tax of questionable constitutionality. That isn’t tax policy; it’s resentment.

Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, co-host of Canadian Tax Matters, a former chair of the Canadian Tax Foundation and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.

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