Taxes are continuing to be a hot topic of public debate. Our provincial and city elections last year prominently featured taxes. This new year we are facing an important federal election on Oct. 19—unless Harper breaks his Canadian Election Act and calls an earlier one for partisan advantage as he has done before to retain power.
During 10 years in charge, Harper has relentlessly cut personal and corporate taxes. He has also cut government spending to achieve his political aim to shrink the government sector (non-profit) and expand the private sector (profit-minded). Federal spending and revenue as a share of the overall economy is hitting lows not seen for 70 years.
After all his cutting, Harper now promises not only a balanced budget but a surplus one this year. He aims to buy votes by offering more tax cuts.
Tax cuts have become popular. Many ordinary people today are hard-pressed economically. They are still hurt by the Great Recession created by the calamitous private-enterprise 2008 financial meltdown fuelled by unregulated, unrestrained greed.
Right-wing politicians and commentators have effectively coined the phrases “hard-working taxpayers” and “tax burden.” They imply that government should keep its hands out of people’s pockets. People know best how to spend their own money. Also governments are inefficient and wasteful.
This image of government has been promoted by conservative mass media for many years. They pounce upon misjudged public expenditures, big and small.
They also disparage unions. When a union strike causes public discomfort, it is front-page news in the papers. Financial skulduggery by the private sector is relegated to the business section. How many read the business section?
United States multi-billionaire Warren Buffett, the world’s third richest man, has pointed out our unfair tax system. He says he pays a lower percentage on his income than his own secretary. (In Canada, our super-rich pay the same federal tax rate of 29% as persons earning $140 000.)
In North America the very rich, often CEO’s of banks and large corporations, frequently have relatively low salaries which are taxed at full value. Most of their income and wealth, however, is from investments. This is unearned income from stock options, dividends and interest.
Investment income has a myriad of tax loopholes well known to investors and their high-paid accountants and lawyers. Canadian examples are investment gains called capital gains, as on stocks.
Capital gains are only taxed at half their value. Also if someone loses money on an investment, the loss can be subtracted from their other gains for over three years back. Neat…when you have money.
In truly democratic, small but oil-rich Norway, the government publicly publishes all personal tax returns. It not only taxes income, it also taxes wealth. This means everyone can clearly see how little or much everyone pays in tax relative to their total financial worth. If we did this in Canada, we would have riots in the streets!
Former Clerk of the Privy Council Alex Himmelfarb and son Jordan of the Toronto Star talk about the word “tax” having become a maligned 4-letter word in our present public discussion of politics (See their book of essays, Wilfrid Laurier University, 2013).
We badly need to redefine the true meaning of the word. We accept to pay the price of our manifold personal needs such as food, housing, transportation, etc, etc. But we have been conditioned not to pay the price (called taxes) for all the common services we require such as roads, parks, schools, etc, etc.?
Renowned U.S. Supreme Court Justice Oliver Wendell Holmes, Jr. (1841-1935) put it this way: “I like paying taxes. With them, I buy civilization.”
Himmelfarb says: “Taxes, after all, are the way we pay for the things we do together that we could not do at all or as well alone.”
A good example is our Canadian public universal health insurance. It protects all of us from most health costs by spreading the risk over everyone.
This much-treasured government program also significantly costs less overall than the free enterprise U.S. model that only covers part of its population. How is that for economic efficiency so sought by conservative bottom-liners?
As a way to redefine the word “tax,” consider the following: We pay annual membership fees when joining with other persons to promote our own and other persons’ well-being and interests. The fees are required to operate the various organizations to deliver the services we want.Can’t we similarly and simply say that taxes are the fee we pay to create a livable and well-functioning society in which we spend our lives?
Stig Harvor