How ironic is it that Stephen Harper has assigned Tony Clement to identify opportunities for federal budget cutbacks? Yes, that would be the same Tony Clement whose riding received $50 million in G20 “legacy infrastructure funds,” part of a spending spree that MP Pat Martin called “flagrant…hog-troughing of the highest order.”

Are you ready for the upcoming press conferences where Tony lectures Canadians on the need for belt-tightening and “cutting the fat,” while his axe chops through the muscle and bone of our public programs and services?

In recent decades, the management of public financial resources has been largely driven by the neo-liberal obsession with cutting taxes and shrinking government. Most of our political leaders, either in agreement or because of electoral fear, have played along. Taxes were cut, more loopholes added and — surprise — we were then told of the dire lack of public funds to cover existing or new public services. Underfunded services were derided as ineffective or inefficient, and then targeted for more cuts or outsourcing to the private sector.

But the dirty little secret that most government leaders will not admit — the potential for additional public revenue is immense. A more fair and balanced tax system could generate tens of billions of dollars in new public revenue.

The numbers are truly breathtaking.

Let’s look at some of the figures provided by the 2011 Alternative Federal Budget prepared by the Canadian Centre for Policy Alternatives. The Alternative Federal Budget provides three-year projections, so the following figures refer to potential revenue and expenses for the years 2011 through 2014.

For starters, we could pull the plug on the outrageous and unnecessary tax cuts for corporations. Reinstating the 2007 corporate tax rate would produce $30 billion over the next three years.

Salary and wages are fully taxed, but capital gains from investments are taxed at only half the rate. While this break is supposed to encourage investment, it mostly rewards stock market speculation. Fully taxing personal and corporate capital gains, and eliminating the stock options deduction, would produce another $19.3 billion.

Introducing a financial activities tax of five per cent on profits and remuneration in the financial sector, as advocated by the International Monetary Fund, would generate another $14.4 billion.

Canada’s highest income tax tier is only $128,800. If we added two higher tiers at $250,000 and $750,000, with modestly higher rates, that could bring in another $12 billion.

Plus the Alternative Federal Budget identified a number of other tax adjustments producing another $8.7 billion in revenue.

Introducing those tax reforms — essentially gaining a more fair and balanced tax contribution from the wealthiest individuals and corporations — could produce more than $84 billion in new public revenue over the next three years, or about $28 billion per year.

If we collected that additional tax revenue, would it make a noticeable difference?

Here are some more examples from the Alternative Federal Budget on what could be done with that revenue over the same three-year period.

Healthcare

• Initiate a national PharmaCare program ($11.2 billion)

• Significantly boost continuing care services, such as nursing home and residential care ($8.7 billion)

Families

• Launch an affordable national childcare program ($4.9 billion)

• Provide safe drinking water for First Nations ($3.0 billion)

Education

• Reduce post-secondary tuition to 1992 levels ($4.8 billion)

• Create new income tested education grants ($4.2 billion)

Municipalities

• Launch an environmentally sustainable municipal infrastructure building program ($13.5 billion)

Poverty reduction

• Significantly boost the Canada Child Tax Benefit to $5,400 ($14.3 billion)

• Double the refundable GST credit ($11.2 billion)

• Increase poverty reduction transfers to provinces ($5.4 billion)

In other words, $84 billion over three years could fund a host of incredibly important programs that would touch the lives of most households in Canada. Important programs and services that governments have told us are unaffordable could be funded because, in reality, the creation of more public revenue through a fair and balanced tax system is really a matter of political choice.

These examples are just that — an illustration of potential sources of new public revenue and potential uses of those funds. What specific tax reforms and expenditures should actually be introduced, and when, are decisions that should emerge from an informed public discussion and political debate.

So in the coming months, when Tony Clement begins chopping away at the Canada we love, and tells us we cannot afford the Canada we need, remember we have a choice. Tony’s axe or fair tax.

Larry Gordon is co-ordinator of Canadians for Tax Fairness.

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