OK. We get it. Andrew Coyne doesn’t like taxes. All tax increases seem to do is finance an increase in the size of the state, he writes in his March 27 attack on the work of Alex Himelfarb and his colleagues.
It seems they’re the new “tax apologists.” (“Tax apologists make a shaky case”—Vancouver Sun; “Apologists hard-pressed to claim we’re under-taxed”—Calgary Herald; “Taxpayers need to see value for money”—Edmonton Journal; “Sorry apologists: there’s no way we’re under-taxed”—Regina Leader-Post, Saskatoon StarPhoenix; “No way that we’re under-taxed—National Post; “Tax apologists hard-pressed to claim we’re under-taxed”—Ottawa Citizen, Windsor Star; “It’s hard to argue we’re under-taxed”—Montreal Gazette)
Himelfarb, former clerk of the privy council, and his son Jordan, an opinion editor at the Toronto Star, edited a book of articles called Tax is Not a Four-Letter Word. Contributors to this book, published by the Wilfrid Laurier Press in 2013, are leading progressive scholars and practitioners on taxation and public policy.
The book bemoans the fact that discussions about taxes and tax increases have been disconnected from discussions about the public services the taxes pay for. Public services have been starved for revenues because of decades of cuts.
Coyne doesn’t like this and sets out to demolish the book’s argument in a number of ways. The rhetorical devices are obvious—claiming that people think or feel a certain way without providing any evidence for the claim. But it’s his appeal to what he calls “the actual record” that’s the subject of this post.
The actual record Coyne presents to undermine the book’s argument about revenue starvation bears little relationship to the real actual record.
“Over the past five years the federal government spent an average of roughly $7250 per citizen, in 2013 dollars, on services to the public,” Coyne writes. “That’s more than it has ever spent in our history, and it’s not even close: At its previous peak, in the early 1990s, it was barely scraping above $6,000.”
If these figures are correct, then the case the book makes fails: the federal government is not starved for funds. In fact it’s never been so flush.
The first red flag: Why would Coyne take an average over five years? Why not instead take the highest-spending year? Wouldn’t that best prove his point?
Because, in 2013 dollars, the highest-spending year occurred in 2010 when it reached $7873. Spending per capita plummeted since then, the result of the Harper budget cuts, falling to $7090 in 2013, a drop of 10 percent.
And the only reason program spending reached the heights it did in 2010 was because of stimulus spending to prevent the economy from collapsing.
Spending the year before the stimulus was applied was $6910 per capita. Coyne’s use of an average demonstrates the reason averages often hide more than they reveal.
The second red flag: Coyne’s figure for the early 1990s is plain wrong. The highest-spending year (1993) wasn’t “barely scraping above $6,000.” It was luxuriating at $6840.
So instead of Coyne’s putative increase of $1250 per citizen—21 percent—the real increase is $250 or 3.5 percent.
It’s still an increase, but given the Harper government’s determination to create a surplus, the gap is likely to disappear completely by fiscal 2014-15. Spending will sink back to 1990s levels.
Sorry Andrew, case not made.
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