Policy Forum: A Tax Shift — The Case for Rebalancing the Tax Treatment of Earnings and Housing Wealth

This study encourages provincial and/or federal governments to shift the balance of revenue generation to rely proportionately less on taxing earnings in favour of more annual (deferrable) taxation of housing wealth. The author argues that this shift would help to address three concerns: (1) the growing gap between local earnings and home prices; (2) the growth in inequality driven by returns to housing capital; and (3) inequalities that result from violations of the intergenerational golden rule in government budgeting. To support this tax shift, the author suggests design considerations by reflecting on housing wealth surtaxes introduced by the government of British Columbia in 2018 and a "million-dollar homes tax" alternative that he proposes in order to stimulate further discussion.