No one likes taxes. That’s been the pervasive political wisdom for so long that the issue of tax cuts has completely hijacked elections. A moron with no political vision and zero charisma could, and has, run a successful campaign for public office simply by chanting the tax cuts mantra.
And yet, time and time again, tax cuts don’t come up as a major concern for the vast majority of Canadians.
In a December, 1999 Ekos poll, tax cuts ranked sixth in the list of Canadian priorities, after health care, education, ending child poverty, improving productivity and dealing with the national debt.
Nowhere is this disconnect between what the public wants, and what governments do, more evident than in Ontario. Six years of Conservative tax cuts have resulted in a $1-billion budget shortfall for schools, an overburdened health care system that requires at least another $1-billion of its own, a crisis at universities and colleges as the double cohort year squeezes already stretched resources, user fees at parks and community centres and compromised public safety, such as the tainted water supply in Walkerton that killed seven people and made 2,300 sick.
Therein lies the big lie of tax cuts. Nothing comes for free. If you don’t pay for services in taxes, you’ll pay in some other way — increased property taxes and higher rents, user fees, or non-existent and second-rate public services.
Contrary to that old line about tax cuts, the average Joe does not know how to spend his money better than the government does. If that were so, we wouldn’t be a consumption-obsessed culture that’s up to its neck in personal debt.
Just after former Premier Mike Harris sent out those $200 dollar tax rebate cheques, there was an item on the news about how people spent the money. Not one person profiled put the money into an RRSP, or tucked it away for their chldren’s education. People bought barbeques, new shoes and nice dinners. That might have momentarily helped the economy, but, in hindsight, wouldn’t most of us have preferred more hospital beds to new lawn furniture?
Of all the ways of ensuring the equitable, healthy and stable society that Canadians say they want, paying taxes based on income to create and maintain public services and infrastructure is the most fair and cost efficient.
According to the Centre for Social Justice, the average Canadian family earns $45,000 before taxes and pays about $11,000 in taxes.
That’s a bargain, considering what the costs would be for private education and private health coverage, not to mention user fees for roads, tap water, garbage collection, libraries, parks and the services of police and fire departments.
Contrary to conservative opinion, Canadians are not overtaxed, not when you consider what we get in return. Our income tax is higher than that in the United States, but we don’t find ourselves navigating the frustrating HMO system, or unable to bring our sick children to emergency rooms because we simply can’t afford it.
High-income earners may resent the idea of paying a greater percentage of their income for the same services as everyone else, but they are the greatest beneficiaries of tax loopholes and deductions. In fact, it’s the poor who actually pay a higher percentage of their income than the middle- and upper-class in provincial and federal sales taxes.
As for corporate income tax, that is lower here than in the United States — 32.6 per cent in Canada compared to 36 per cent south of the border, according to a 1999 report from the accounting firm KPMG.
The only people helped by tax cuts are large corporations. There’s big money to be made in selling things such as education, health care, highway access and energy. And as public systems are gutted by tax cuts, the private sector not only looks better — in places such as Alberta and Ontario — it’s cited as the only alternative.
But anyone who still believes in the inherent wisdom, cost-efficiency and fairness of the free market obviously hasn’t heard of Enron or Nortel . Or hasn’t paid attention this month, as prices briefly rocketed in the province’s new electricity system, which already looks to be as susceptible to screw-ups and manipulations as the one in California.
No one likes taxes? Maybe. But I bet people like public education, universal health care, clean water, affordable energy, maintained roads, adequate sanitation services and safe communities a whole lot more than they dislike taxes.
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