Taxes

 

The other day I had a call from a gentleman from the Canadian Taxpayers Federation. He wanted to talk about, what in the Federation’s opinion, was the horror of pay raises for Members of Parliament.  He thought it was a scandal in these economic times.  When I got a chance to speak, I pointed out that if we did not pay MPs a decent remuneration, you could not attract the quality of people that you needed in government.  Could you imagine the kind of people you would get to run the country if you paid them inadequate salaries?  He didn’t seem quite happy with that response.  He seemed really upset when I said that, in my opinion, we did not pay enough taxes for all of the services that we got from each level of government.  He quickly terminated the call after that.

“I never did give them hell. I just told the truth, and they thought it was hell.”
  - Harry S Truman

That got me thinking (always a dangerous habit) about that state of our economy.  One of the things that we are beset with is a large federal debt, about one trillion dollars right now, and the government’s apparent inability to fully fund several obligations.  The largest discretionary item in the federal government’s budget is national defence, and yet we seem incapable of fully funding that institution to anywhere near NATO’s target.  The same deficiency is found in health care where the current expenditure cannot provide decent health care in any province or territory.  Despite calls for an overhaul of the whole system and the larger costs of the pandemic and influenza, the truth is that the system has been underfunded for years.  And yet, every election, political parties promise more programs for taxpayers’ consumption.  But no new taxes are offered to pay for them.  Dental plans, $10 childcare and other such programs are in the process of implementation but with no way of paying for them it would appear.  And we go on welcoming these goodies. 

So, it would appear that my argument about paying too little in taxes has some merit.  Other countries, most notably the Scandinavian countries pay much higher taxes than us and accept the fact.  Tax rates that hover around 70% and Value Added Tax (VAT, the equivalent of our GST) of 18% and 19% are accepted in these countries. So why are we not willing to pay our way?  One answer is that we look too closely at the US and their taxes and think that we pay too much. The problem with that is that there is no equivalency.  True, the US supports a large and expensive military, but their government health care spending is relatively minimal compared to other western countries.  They do not have near the number of social programs as these other countries.  And yet, the US has a national debt of $20 trillion, an amount that is 20 times the per capita debt in Canada.

The other question is, if we want to keep our taxes low and not raise our national debt, where do we cut?  What programs would the majority of the country accept?  The elimination of the armed forces? The death of federal and provincial health care? Because these are probably the only programs that are large enough to balance the books and pay down the debt.  MP salaries are a miniscule line item in the budget, what private industry would call the cost of doing business. 

“Read, every day, something no one else is reading. Think, every day, something no one else is thinking. Do, every day, something no one else would be silly enough to do. It is bad for the mind to be always part of unanimity.”
  - Christopher Morley