Politics

Anti-Tax Agenda Gears Up

By Lorne Warwick
Published May 02, 2012

Deeply affronted by the recent change to the Ontario budget that will impose an increase of 2 percent on the income of those making over $500,000 per year, the right wing has been busy cranking out its anti-tax propaganda. Lest anyone think that a return to some form of progressive taxation is a good idea, two groups with charitable institution status are most charitably taking the time to point out the error of our thinking.

The first out of the gate was The Fraser Institute, which recently released a study telling Canadians that we are paying far too much tax as it is. According to that study, we hapless citizens are paying more in taxes at all levels than we are on the basic necessities of life.

Following in their footsteps, the Macdonald-Laurier Institute kindly informs us that the rich pay more than their fair share of taxes, and hitting them harder won't solve all the problems of the poor.

While you can read both reports through the links provided, I'd like to offer a few observations here. First, the Fraser report conveniently ignores the fact that in terms of total tax burden, Canada ranks in the middle of countries listed in a Forbes-commissioned study for 2009.

Coming in at number 33 out of 65 countries measured, the study provides some much-need context absent from the Fraser hysteria.

Next, the above-mentioned study shows that the United States, coming in at number 21 in the rankings, has a significantly higher tax burden, much of it apparently allocated in ways that do not benefit the majority of people. (Wars in Iraq, Afghanistan, on Terror, on Drugs and against Occupiers, corporate tax cuts and subsidies readily come to mind as quick examples.)

Despite that higher tax burden, U.S. citizens are mired in much higher costs for health care, the cause of 60 percent of their bankruptcies in 2009, thanks both to the occurrence of catastrophic illness and the absence of taxpayer-supported public health insurance.

In terms of education, while annual tuition for a basic undergraduate degree in Canada ranges from just over $2,000 to about $6,000, those in the United States are anywhere from about $13000 to over $41,000, excluding Florida, which appears to have the lowest tuition at $5,700.

Of course, one of the key reasons for the disparity in educational costs is the proportion of taxation each country allocates to education. Canada sees subsidized education as a worthwhile investment since society as a whole stands to benefit.

Finally, the Macdonald-Laurier Institute avers that increasing taxes on the wealthy won't solve all the problems of the poor. I can't think that anyone has suggested it will.

What has been asserted, however, is that a wisely administered system of progressive taxation will allow for the continuation and expansion of programs to help the disenfranchised become fully-participating members of our society - something that those inhabiting conservative and libertarian think-tank towers seem to forget is a core value the majority of Canadians hold dear.

So no, speaking as a member of the middle class who wants to maintain and enhance the quality of life in this country, I don't think taxation is a dirty word. Contrary to the fraught hyperbole of the so-called think tanks that are subsidized through my taxes, all I ask and expect is that my dollars be used for the betterment of all, not to simply bolster the net worth of the wealthy.

Lorne Warwick is a retired high school teacher who spends his time reading, traveling, doing crosswords, volunteering, and becoming increasingly concerned about the state of democracy in Canada.

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By Borrelli (registered) | Posted May 02, 2012 at 09:49:48

Great post, Lorne. I just finished reading economist Jeffrey Sach's The Price of Civilization (available at HPL), and he too emphasizes that the anti-tax orthodoxy is a political creation divorced from reality. Higher taxes to pay for social programs benefit everyone, including the rich, and this assertion that the rich have already paid their "fair share" is a distraction.

Sachs even goes as far as to argue that after cutting expenses (in response to Tea Party chants that 'the government has a spending problem!', the USA still has a revenue problem made worse by constant and often hidden tax breaks directed at the most wealthy.

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By Capitalist (anonymous) | Posted May 02, 2012 at 10:57:29

The top marginal tax rate in Ontario is 46% (now 48% if over 500K)

Is that not enough?

How much of other people's hard work do you folks feel that you are entitled to?

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By seancb (registered) - website | Posted May 06, 2012 at 14:02:30 in reply to Comment 76395

Are you speaking to Vranich et al? I doubt he reads comments on "THE INTERNETS". You should try sending him a telegram.

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By Borrelli (registered) | Posted May 03, 2012 at 09:06:34 in reply to Comment 76395

No, 46% isn't enough. 50% seems more like it, especially as long as these "job creators" and "innovators" are moving their cash off-shore and creating jobs there.

To paraphrase Stephen King's excellent pro-tax column from earlier this week, these top-earners couldn't have made it in Canada without Canada. Our health care, our roads, our police, our education system: they all don't come from free, Capitalist, so to answer your question, half of every dollar in income above 'obscene' seems like a fair price to pay.

Comment edited by Borrelli on 2012-05-03 09:06:59

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By theOther (registered) | Posted May 02, 2012 at 19:13:52 in reply to Comment 76395

From time to time the work seems hard; most of the time, though, not so much. As a 46 percenter, I am privileged to share my good fortune with others in this community, and all of us together are among the luckiest organisms ever to dwell on this planet. BTW, I wonder what the PM has done lately to limit the Fraser Institute's capacity to lobby in support of its reactionary objectives?

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By A Smith (anonymous) | Posted May 02, 2012 at 14:43:59 in reply to Comment 76395

From 1960-80, Ontario's top marginal tax rate averaged around 57%...

http://i49.tinypic.com/15x5z08.png

Productivity in Canada, from 1961-80, averaged 2.41%...

http://i49.tinypic.com/33ku5j6.png

Since 2000, the combined federal/provincial corporate tax rate has fallen from about 43%, to 27% and real welfare payments have been reduced...

http://www.budget.gc.ca/2008/images/chap3-9b-eng.gif

In that time, productivity has averaged 1.00%.

Household debt, which eventually has to be paid back, jumped from 30%/GDP to 37%/GDP, from 1969-85. This was an average increase of 1.1%.

Since 1985, household debt has jumped 36% to 90%, an average annual increase of 3.7%.

From 2000-11, Canadian corporations have averaged surpluses (profits-investment) of $47B/year. In that same period of time, households and small businesses have averaged deficits (spending-income) of $29.2B.

>> How much of other people's hard work do you folks feel that you are entitled to?

I would put it like this. If rich people and corporations want to spend their hard earned dollars, thus creating jobs for yacht builders, luxury car workers and granite tile setters, they should be taxed at a lower rate.

However, if all they want to do is hoard cash and kill jobs/production, then they should be taxed at much higher rates.

It simply isn't fair for the winners in our economy to take all the chips and leave the game, which is essentially what they are doing. Government issued money is meant to be spent, not hoarded.

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By Kiely (registered) | Posted May 02, 2012 at 13:13:05 in reply to Comment 76395

How much of other people's hard work do you folks feel that you are entitled to?

What "folks" are those? The sports team owners, developers, bankrupt car companies, entitled golf partners, wealthy cultural elitists, big pharma, the military industrial complex, the banks? Where do you think all your tax dollars go?

To these generic "folks" of yours I suppose...

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By RB (registered) | Posted May 02, 2012 at 13:49:06 in reply to Comment 76401

What's a "wealthy cultural elitist"?

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By Kiely (registered) | Posted May 02, 2012 at 14:03:35 in reply to Comment 76402

People that often sit on your museum, art, and charity councils and committees. "Ladies that lunch" and the like... often found in the company of the "entitled golf partner."

Please pardon my pithy stereotypes ; )

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