Take a small step on inequality

Around this time of year, I like to remind people to be a little charitable. Just a little. To decide to make gifts so small you don't even notice them.

If all of us did this, the cumulative power of many small donations to local charities can be extremely powerful. It only takes a mass acceptance that this is needed, and that it works.

I was about to write about exactly this — all over again — when I came across an essay by David Foot and Daniel Stoffman. You'll remember these guys, they're the authors of the book that made generational warfare socially acceptable: Boom, Bust and Echo.

On this occasion, they wrote about another revolutionary author who has also become a best-seller: Thomas Picketty. His book, Capital in the 21^st Century, made it socially acceptable to criticize the rich.

The rise in inequality of distribution of wealth in society is a topic of discussion that is much like climate change. Everyone complains about it, but nobody does anything substantive about it.

Even the bankers are getting concerned. TD Bank recently released a report filled with charts and graphs and a whole lot of dense economic prose. Titled The case for leaning against income inequality, their report warns that wealth is good (yes, we all want to be wealthy), but past a certain (undefined) point, a rise in income inequality of just one per cent hurt GDP growth between .6 per cent and 1.1 per cent.

How they came to that conclusion, I cannot tell you; I am not literate enough to read economic reports. But I scanned through it, looking for suggestions on how to solve the problem, and found nothing substantive beyond suggestions for making housing more affordable, improving health care and early childhood development and decreasing barriers to higher education.

You know, things a bank would never do. TD Bank prefers to lean, not stand.

Nobody talks about taxing the rich. In our society, redistributing income is a Bad Idea. Even though we have been redistributing wealth steadily upwards for decades.

That's the topic Foot and Stoffman wanted to tackle. They say the obvious conclusion drawn by Prof. Picketty is good, but must be disregarded simply because it will never happen.

The 20 per cent that owns 67 per cent of all wealth in Canada (and 100 per cent of government) will never allow it.

Therefor, Foot and Stoffman read the same pages that I read about fundraising for charities. It is all well and good for rich people to make million-dollar donations to good causes here and there.

But if you really want to get the work done, you need the power of mass willingness to make small sacrifices.

Example: if everyone passing through a grocery checkout tossed an average of one thin dime into an SPCA cash can, pretty well every time they bought groceries, that charity could function very well indeed. And never need to organize any other fundraiser. Ever again.

And not one donor would ever notice the sacrifices made to achieve that.

Foot and Stoffman follow a theme raised by multi-billionaire Bill Gates. They suggest that rather than a surtax on wealth (which would be expensive to manage and impossible to impose anyway), governments should tax financial transactions.

For discussion purposes, they start off with a suggested one-tenth of one per cent surtax on stock purchases. Further, they propose a one-fiftieth of a per cent tax on bond purchases.

I've never bought stocks on the stock market, and I've never signed up to hold government or corporate bonds. But I've got a pile of them anyway — through my RSPs, my union pension plan and even my Canada Pension Plan. I also hold some in a Tax Free Savings Plan, because my government says I should.

And so, I presume, do you. We all pay management fees many multiples higher for all of this — without one single death resulting.

Further, Foot and Stoffman suggest an undefined tax on foreign currency exchanges: “a small fraction of one per cent, split between buyer and seller.”

Considering that about $12 trillion enters and leaves Canada every year, they say a tax like that would wipe out all government debt very quickly, leaving room for investments in the things the banks like: affordable housing, childhood development and higher education.

Financial institutions already “tax” these transactions, as fees that supplement their hefty profits every year. And the sky does not fall, the economy does not come crashing down around our ears.

The cumulative power of these tiny fees, scarcely felt by most individuals, is massive. They're like dimes in a cash can.

All we need to do is accept them.