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www.canadianlawyermag.com 5 tax counsel at TaxChambers LLP in Ottawa, describes this proposal as a "surtax." He says this may raise some revenue, but "all tax law is behavioural. When you introduce a rule, you induce behaviour. There will be some attempts, and some successful attempts, to control the level of profits that are subject to this surtax." Krishna says this will likely involve moving profits to jurisdictions with a lower tax rate. O'Riordan also says this kind of tax hurts shareholders, which may not sound bad for the average Canadian, but will also affect worker remuneration and employment. Blair Dwyer, a partner at Dwyer Tax Law in Victoria, says some form of wealth tax is likely to be implemented, but he agrees it is unlikely to help raise revenue. Dwyer also points out that enforcing a wealth tax is complicated and expensive. A "wealth tax is difficult because you have to estimate values, and unless you have an actual sale of the asset, it's hard to estimate value." Another area he says where rumours have regularly swirled is a change in the capital gains tax rate. "Capital gains are taxed at half of the normal rate," Dwyer says. "So, for a period of time, it was two-thirds of the normal rate. [Raising it to] three-quarters of the normal rate is a rumour that comes around with every federal budget." "All tax law is behavioural. When you introduce a rule, you induce behaviour." Vern Krishna, TaxChambers TAXING THE RICH The Liberal platform included several tax proposals: Raise corporate income taxes on the largest, most profitable banks and insurance companies who earn more than $1 billion per year, and introduce a temporary Canada Recovery Dividend Implement a tax on luxury cars, boats, and planes as outlined in Budget 2021 Significantly increase the resources of the Canada Revenue Agency to combat aggressive tax planning and tax avoidance The NDP platform, which is likely to hold the balance of power, proposed: a temporary COVID-19 excess profit tax that puts an additional 15 per cent tax on large corporate windfall profits during the pandemic increasing the capital gains inclusion rate to 75 per cent a luxury goods tax on things like yachts and private jets Canada is unlikely to raise rates in this area unless the US does, however, to ensure we remain competitive. While it may be unrealistic given the lack of political will, all tax experts agree that Canada is long overdue for a complete overhaul of its tax system. Krishna says the Carter commission in 1966 was the last major reform of tax law in Canada. "It's long overdue," says O'Riordan. "There's lots of problems with our tax system. It's too complex. It's not neutral. It's very distortionary." "Taxes should be fair, and simple and effi- cient," says Krishna. "Those are the three mantras of taxation, and we never achieve any single one of them, and never have."