If you want to crush an economic recovery, just hike taxes.

Unfortunately, a number of groups didn’t get the memo, ranging from the NDP to the Canadian Centre for Policy Alternatives to public sector unions who seem to think what Canadians really need right now, in the middle of the worst recession in a century, is higher taxes.

To give you a sense of how far off base this sentiment is, consider that even the prime minister – whose government infamously tried to hike taxes on small businesses, and raised carbon taxes and alcohol taxes in the middle of the pandemic – says he won’t raise taxes right now.

The reason is obvious. Many businesses are on the brink of bankruptcy. Individual Canadians have lost jobs or taken pay cuts. Higher taxes squeeze people more at time when they can least afford it, undermining any economic recovery and impeding job creation.

But, critics will protest, what about “the rich”? They’ve still got plenty to spare. Why not hit them up for more?

Obviously, there’s no tax more popular than one paid by other people, and the rich make for a juicy target. But the fact remains that proposals such as a “wealth tax” still make for terrible policy, for reasons that have nothing to do with feeling particularly sorry for rich people.

For starters, wealth taxes are an administrative nightmare to impose, which is precisely why most countries don’t even try. Unlike things such as income or purchase transactions, wealth taxes require subjective, constantly changing estimates of value, because there’s no market-based measure to point to.

Fine, you might say. Insurance companies do that all the time, right? Not on the scale envisioned by the wealth tax crowd, which would require the CRA to track (and continually update) the value of every asset – physical and virtual – held by every Canadian taxpayer. Is it realistic to expect this from an agency that can barely manage to answer the phone to field basic questions from people trying to do their taxes?

Secondly, wealth taxes effectively function as a double tax because they are imposed on assets purchased with money on which tax has already been paid in the form of income taxes. This creates a strong disincentive to consume rather than save or invest. And they punish people for doing nothing but holding onto an asset such as their own home, which is an approach so unpopular that the Trudeau government swore it would never do it after the idea popped up in the news as being under consideration.

But even setting all this aside, it’s an awful lot of headache for a policy that would be, in the words of the Parliamentary Budget Office “highly uncertain” to bring in the maximum of $5.6 billion. That’s fancy speak for rich people have a lot of resources to restructure their affairs to legally avoid paying more tax, and will probably do so.

It’s also clear it won’t be the solution for a deficit of $343 billion (and rising). Turns out we simply don’t have enough rich people to squeeze to make a big dent in a shortfall that size.

Rather than thinking about tax hikes, the government should actually be going in the opposite direction and offering Canadians tax relief. They’re a quick, simple and fair way to reduce costs for both businesses and households. The Trudeau government already knows this, which is why it has offered various tax freezes, deferrals and rebates as part of its early pandemic response. It will need to go ever further if it wants to combat the lingering uncertainty discouraging economic activity.

Tax hikes on the rich might make for feel-good politics, but they’re terrible economic policy, and Trudeau needs to keep his promise not to raise any taxes on anyone.