Much to the chagrin of my comrades on the right, I was always in favour of the CERB. If we learned anything from the Great Depression to the Great Recession, bailing out the big guys often left little people behind - to the point of starvation in many cases. It is not the government’s job to underwrite airlines, manufacturers, or bankers, but the definition of “commonwealth” and our “POGG” clause can be interpreted to mean supporting citizens. We’ve lived this out at last.
But as restrictions are lifted, the crisis often predicted by libertarians is beginning to show signs of manifesting. Despite there being a large number of people at home either on leave or via layoff, jobs are going unfilled because the CERB incentivizes unemployment. As the benefit was not taxed, some are earning more than they did at work for a similar salary and for low-wage earners, the CERB was actually a substantial raise. Why not stay on it for as long as possible?
Ideological battlelines are already being drawn around this issue, with neoliberals having won the battle so far via the “wage subsidy program” against their more left-wing brethren who often agitate for a higher minimum wage. Despite us having dived into debt, and with restrictions still to be navigated, my proposal is to go the opposite direction - cut personal income taxes in a significant manner while reraising the GST to seven per cent to help offset our growing debt to GDP ratio.
This is both fair and just. Neither I nor all the Queen’s men in our capitals can tell you if your job is worth more or less than before the pandemic but common sense decrees that you are certainly entitled to more of your own money than you currently receive after taxes. Finally, as we must pay off the war-debt incurred while we battled the virus, it is only proper that everyone pays, which is best meted out as a local merchant sells you goods and services.
Sales taxes are the most cost-effective and efficient form of collecting revenue for public expenditures. Our tax program has needed an update for decades and our leaders have proved that transformative change can happen all but instantaneously - hold them to it, demand that if we must go back to work, we need to see more money on our cheques. A tax decrease of no less than 15 to 50 per cent would tip the scales in many sectors, making work more attractive again.
Before anyone takes up the old centrist cry “taxes are the costs of civilization,” could you explain how the money laundering we take part in every April helps anyone? The proof is in the refunds - if we’re entitled to that money, why not leave it with the citizens to begin with? There is still much for accountants to do when clients are expanding rather than fencing the tax man and the brains in Revenue Canada could help in understaffed ministries, such as Indigenous Affairs.
By simplifying the tax code and lessening the tax burden, the time formerly lost in paper shuffling would create an exponential increase in start-ups and growth expanding the economy, which in turn would increase family budgets. Those worried this will defund the social apparatus need not fear: a means tested, scaled, and renamed CERB, combined with all other programs, would result in more money for entitlements at less cost through ending redundant bureaucracy.
To be clear, there is no such thing as a free lunch. But thanks to years of mission creep and incompetence, there are so many cost savings to be found, it will nearly appear to be. There ought to be no progressive tax system just as there ought not to be ten dozen departments who hand out subsidies. Give everyone more of their own money back, flatten the tax curve, and use one delivery system for entitlements, from childbirth to retirement, unemployment to retraining.
We are headed into a recession but its length will be determined by us. Innovation will make it shorter, using the old tools will ensure it goes on for years.
Which would you prefer?
