William Watson: An excess profits tax? OK, Mr. Singh, but how about an excess wages tax, too?

financialpost.com:

NDP Leader Jagmeet Singh says Canada needs an excess profits tax to help reduce inflation. His argument seems to be that if you let grocery chains and others know they won’t profit from raising prices unfairly, they won’t raise prices unfairly. I don’t know. It doesn’t sound like typical corporate-robber-baron behaviour to me. Why won’t they start raising prices on the grounds their taxes are higher?

And why did they only start price-gouging in 2021, which is when inflation broke out? If they’ve had robber-baron power all along, why did they wait until then to exercise it? You don’t suppose crazy-high COVID deficits and interest rates held too low too long have more to do with inflation than “cost-push factors” like companies and unions getting into food fights over compensation. (“Cost-push factors”: I can’t believe we’re back to the terminology of the 1970s.)

Actually, I might not mind an excess profits tax if we also had an excess wages tax. It’s not a price-price spiral, after all, it’s a -price spiral.

If you think about it, just about everybody makes excess wages. Very few of us earn the bare minimum we need to keep us on the job, working as hard as we do. We all make a little more than we need. A surplus. Some gravy. (Note to editor: Except me, boss. My fingers are typed to the bone.)

That surplus, that part of our wage that is more than we actually need to get us to do the job, is an ideal target for taxation. Economists’ conception of the perfect tax is one that doesn’t change people’s behaviour. If the Canada Revenue Agency could lop off that sliver of income that is more than we need to do the job — which for some people, star athletes, for instance, is probably a lot more than a sliver — people would grumble