Monday, October 26, 2009

How Can We Have an Adult Conversation When Harper Thinks Everything is Dumb?

There was a great editorial in the Toronto Star about having an adult conversation over the necessity to raise taxes. But when the subject comes up Harper just calls it 'dumb' and then accuses Michael Ignatieff of wanting to do just that. How many tax dollars have the Reform-Conservatives wasted with warnings that the Liberal leader will use the 'T' word?

Well someone is going to have to, because the Ref-Cons have clearly lost control of this country's finances. Instead they try to hide their mismanagement with complicated websites and flowery announcements.

Smarten up, Grow up, or step aside. This is no time for childish games.

Can we have an adult conversation about taxes?
Toronto Star
October 26, 2009

At the risk of insulting a generation of 4-year-olds, it's time we had an adult conversation in Canada about taxes and public services.

Most 4-year-olds have figured out that when you go to the store to get something you want, you have to be prepared to pay for it. Yet Canada's political leaders and business interest lobbyists would rather spit nickels than admit this basic fact. It's a problem with all political leaders and parties – not just those I disagree with.

For Canada's political right-wingers, their insistence that we can have massive tax cuts without suffering any decline in public services is worse than childish; it's delusional. Any 4-year-old knows if you go to the store with less money, you're going to come away with less candy. Eliminate government waste, they say, and we can have lower taxes without cuts in services.

Sounds good, particularly when provincial and federal auditors provide an annual source book for examples of stupid things that have been done with public money. But, at heart, most Canadians know and appreciate the fact that our public money is spent on services Canadians value in their everyday lives: Public health care, education and transit systems. Paved roads, sidewalks, sewer systems, clean water. Public services we couldn't do without.

Then there's the right-wing's childish fantasy that if you lower tax rates, government revenue will actually increase. We can all pay less tax, and government will get more revenue.

Try that one on a 4-year-old. It defies logic. Here's the reality: Data from the OECD demonstrate that, since 1995, tax revenue in Canada has dropped from 36 per cent of GDP to 33 per cent of GDP. That may not sound like much, but it represents a loss of nearly $50 billion a year in public revenue. And we wonder why Canada plunged into a $50 billion deficit magically overnight.

Finally there's the self-serving right-wing argument that our public services aren't as good as they should be, so why not cut them? This from the very people whose successful campaigns to reduce public revenue have weakened those services in the first place.

Any 4-year-old can tell you that you don't get what you don't pay for. Lower public revenue and you can expect roads full of potholes and long waiting lists for elective surgeries.

Arguments from Canada's left flank are sometimes equally childish.

Too often, it campaigns for better public services as if they can be provided free. Better services won't cost us anything because the higher taxes needed to pay for those services can be paid by people we don't know. People who make a lot more money than we do. Big corporations but not small businesses.

It's the "anyone but me" solution, which is no more adult than a child who takes candy from a store and then claims his friend did it.

The "anyone but me" line would be amusing if it wasn't such an obvious stall tactic for taking true responsibility for the provision of public services.

It used to be that people who made over $100,000 a year qualified as rich and therefore for membership in the people we don't know who are going to pay for our public services club.

Then someone noticed that a construction worker or an autoworker who worked a lot of overtime could make over $100,000 a year. So Canada's left flank shifted the income cut-off to $150,000.

There are lots of problems with both the economics and the politics of the "anyone but me" proposition: If you set the income cut-off high enough to be politically comfortable, there aren't enough people to pay for better public services; If you raise taxes by a large enough amount on a small group of people, they'll try to find a way to avoid paying them; Politically speaking, people aren't stupid. They simply don't believe you when you tell them they can have something for nothing. At best, then, the argument undermines the credibility of the case for greater investment in public services.

At worst, it reinforces the right-wing mantra that taxes are a burden to be avoided. That's particularly true when the left tries to have it both ways, opposing taxes on the grounds that they impose a burden on working families (or whatever the code phrase for "us" today).

Take, for instance, B.C.'s New Democrats who based a campaign – a losing one at that – around the idea that a carbon tax imposed a burden on everyday people. Similarly, Ontario's and B.C.'s New Democrats are fighting battles against a "tax grab" over the harmonization of Ontario's Retail Sales Tax with the GST.

In an earlier era, a broad coalition of the left went to war against the GST and in the process fed a populist anger that landed in the lap of Preston Manning and the Reform party.

The tax trap is also why the carbon tax campaign sank St├ęphane Dion's political career. Dion tried to sell carbon taxation as tax reform – as a way to cut taxes rather than as an investment in meaningful environmental change.

This strange debate that separates taxes from the services they pay for would be little more than a political oddity if it weren't for the fact that as Canadians confront the challenges of global warming, economic dislocation and an aging population, we're going to need to make significant new public investments.

We're going to have to be able to talk about how we pay for them.

Here's the adult reality: Nations that have the most highly developed systems of public services pay for them with all kinds of taxes, including sales taxes and payroll taxes that everyone contributes to because everyone knows there is no such thing as a free lunch.

You really do get what you pay for. Just ask any 4-year-old.


  1. We all have friends and neighbours who have been hard hit by this recession. This is why the NDP and the Conservatives have been calling for action on the economy. And that is why the government introduced the HST – to create jobs.

    The Toronto Dominion Banks says the HST will reduce cost of doing business in Ontario by roughly $5.3 billion and that the majority of these savings will be passed on to customers within the first year.

    The majority of items we purchase - 80 percent – will see no tax change at all. TD estimates prices, before tax, will fall by almost 1 percent. And, studies looking at the Atlantic Provinces found that consumer prices fell following harmonization.

    Ontario needs jobs – it’s time to stop playing politics.

  2. I agree to a certain extent, especially when it comes to playing games. However, with the Cap and Trade, which has been dubbed 'the tax that dare not speak it's name', threatening to raise the price of fossil fuels, and indirectly everything else, I'm not overly optimistic.

    What we need is a government who will say we are in trouble and we need to make tough choices. But spending our tax dollars to tell us that the other guy might raise our taxes; something this government should be doing, is rather ironic.

    Flaherty should admit his mistake and raise the GST back to 7% - YESTERDAY. It's a no-brainer.

    I'm not dead set against the HST, but do have some reservations.