We’ll soon find out whether they can sell the plan to a skeptical electorate while they’re on the seasonal barbecue circuit.
New taxes, or increases to existing taxes, are never an easy sell at the best of times. They’re a particularly unpalatable combination in the midst of a cost-of-living crisis, something the federal Liberals understand very well these days.
The latest patch of wet cement they are determined to slog through is an increase to the capital gains inclusion amount. This time next week, the sale of an asset such as an investment property, a stock or a mutual fund that earns more than $250,000 in profit will be subject to taxes on 67 per cent of the gain, an increase from 50 per cent.
It was the centrepiece of the spring budget, designed to capture the attention of Gen Z and Millennials whose access to economic upward mobility feels more and more remote as years go by.
The problems for the Trudeau government are multifold. First, the young voters they are aiming to woo with a tax increase aimed at “generational fairness” are checked out on the matter. More than half of 18-to-34-year-olds have heard nothing about it. Among those who have heard something about it, more are inclined to oppose the tax increase than support it. This is not exactly the warm, youthful embrace the Liberals were hoping for. (Although to be fair, when was the last time you tried to hug your 20-something nephew? Awkward at best).
“Boo hoo,” say those for whom even putting a down payment on a primary property feels like a remote dream. And fair enough. But the government has scotched its own sales job by framing the increase as something that will only affect the uber rich, while ignoring retirees and entrepreneurs who, yes, have built up assets and are more privileged and wealthier than millions of others, but who are hardly living champagne and Maserati lifestyles. Some may even have planned to sell these assets to help their children along in life.
In choosing to fight a political war along the rhetorical lines of class warfare, this government has opened up multiple battlefields: of misinformation by opponents (read, Conservatives) who have already successfully ginned millions of Canadians into mistakenly thinking they’ll be on the wrong side of this tax increase, and of grievance by those genuinely affected (and who may have even seen the merit in the increase) who object to being classified as evil, ultra-wealthy villains.
We’ll soon find out if the Liberal MPs now on break from Parliament are the kind of happy warriors who can sell this on the barbecue circuit. Because so far, they’re getting burned.