Government dares not tax giant hoards.

It was asked, "If we are in debt to organizations in Canada, aren't we just keeping the money moving within the country and isn't that a good thing?"

The answer is not exactly.

If wealthy "investors" and financial institutions that buy government debt did not charge interest, we would indeed just be keeping money moving. But "we," meaning people and businesses whose financial assets do not include billions of dollars in government bonds, pay that interest with our taxes.

The Toronto Star reported on July 6, 2023, that "The wealthiest 20% of households controlled nearly 68% of the total net worth in Canada in the first quarter of 2023, while the least wealthy 40% accounted for 2.7%."

According to a Jan. 15, 2023, Oxfam Canada report ("Richest 1% Bag Nearly Twice As Much Wealth As The Rest Of The World Put Together Over The Past Two Years"): "For every $100 of wealth created in the last 10 years [in Canada], $34 has gone to the richest 1 per cent and only $5 to the bottom 50 per cent. This means that the richest 1 per cent have gained nearly seven times more wealth than the bottom 50 per cent in the last 10 years."

High net worth individuals justify this inequality with a Fraser Institute study, "Measuring Progressivity in Canada's Tax System, 2022," which concluded that the top 20% of income-earning families in Canada pay more than half of total taxes, including personal income, sales and property taxes.

But high net worth individuals' incomes derive mainly from capital gains, only 50% of which are taxed, and by a complex set of deductions, limits, and exemptions, that 50% are taxed at about half the rate on ordinary income. These rules withhold from the public purse a disproportionate share of the wealth controlled by the most affluent Canadians.

Government could appropriate needed capital that is sequestered in large holders' hoards and pay it back if that is what the electorate demands. But government – meaning the representatives of everyone who pays interest to large holders of government bonds – is intimidated not only into begging hoarders to loan it money voluntarily, but also repaying it with interest.