Oxfam calls for a tax of 1.5% on wealth over $1 billion

Oxfam calls for a tax of 1.5% on wealth over $1 billion

Oxfam calls for a tax of 1.5% on wealth over $1 billion
by Will Ashworth

According to Oxfam the number of billionaires globally has more than doubled since the financial crisis to 1,645; 78 located in Canada. Things are so good the world’s 85 richest billionaires gained $500,000 per minute in the last year alone. That’s a lot of money available for good works.

While most financial advisors likely don’t have too many billionaires as clients, those with significant assets under management surely have a large number of wealthy individuals and families. The Royal Bank estimates there are 320,000 individuals in Canada with investable assets (excluding principal residence, cars, etc.) of more than $1 million. That might be petty cash to the average billionaire but it’s a fair chunk of cash to most Canadians.  

The point?

Without going to the trouble of implementing a tax, if every one of these 320,000 high net worth individuals were to donate 1.5% of their investable assets to a favourite charity on an annual basis (320,000 multiplied by an average of $3.4 million), more than $16 billion would be put to work helping a lot of great causes.

It’s quite possible that many of your clients are already doing this. If so, they are to be commended for their generosity and kindness. If not, perhaps it makes sense to discuss with them how best to harness their financial assets in a prudent manner that continues to provide for themselves and their family but also makes a difference to others less fortunate.

The reality is Canadians are giving less today than they have in the past. The Fraser Institute estimates that if we donated at the same rate in 2011 (last figures available) as we did in 2006, charities would have received an additional $2.3 billion in revenue.

So, again, are you and your clients philanthropic enough?