Monday was Tax Freedom Day in Canada, according to the Fraser Institute, as part of its ongoing efforts with the Canadian Taxpayers Federation to demonize the idea of paying taxes among Canadian residents.
The Fraser Institute says we've got it pretty good here in B.C., since we're tied with P.E.I. for the second earliest "tax freedom day" behind Alberta. The idea of tax freedom day is that, on this day, or whatever day the Fraser Institute decides, you're done working to pay your taxes for the year and now you can start working for yourself.
And there's the rub right there - working for yourself. So-called think-tanks like the Fraser Institute, as well as the well-meaning folks at the taxpayers federation, think we should all be working for ourselves and those who can't keep up, well, they're just a drag on the rest of us hard-working members of society. Hatred of the poor, the sick, and the disadvantaged came back into vogue during the era of Margaret Thatcher, Ronald Reagan and Brian Mulroney, after going underground thanks to the Depression and the Second World War. Depicting this group as "people not paying their fair share" continues to frame the discussion around taxes and social programs, despite its many faults.
The inconvenient truth is that the same right-of-centre leaders who talk about fiscal accountability rarely deliver when in office. Government spending soared under Reagan and Mulroney. It rose even more under George W. Bush. Stephen Harper's Conservatives cut the GST but made up for it in other areas. The Liberals under Gordon Campbell axed personal taxes but brought in the carbon tax, the HST and other new, subtler forms of taxation.
Locally, Shari Green campaigned her way into the mayor's chair with a pledge to cut spending and taxes at city hall. Halfway through her term, she has done neither, although the arrival of Beth James as the new city manager last month might address the spending issue. Unlike the core review completed by the Liberals 10 years ago, the city's core review has yet to deliver any significant savings. Christy Clark is so confident there's more to cut that she's ordered another provincial core review. With so much of the provincial budget tied up in health care and education, there could be some dark days ahead for doctors, nurses and teachers.
Or Clark, like the others before her, will talk a tough game about cutting spending but be unable to slash budgets. The reason is simple - everyone wants reduced government spending so long as it doesn't affect them.
That's why the owner and developer of the Prince George Global Logistics Park can go before city council and, with a straight face, ask for a tax incentive for anyone wanting to set up shop in the newly-opened light industrial lands near the airport. They argue the incentive will attract new investment dollars to the community and gloss over the personal profit they will pocket. If council rejects their request, they'll be portrayed as anti-business and anti-growth and if council approves it, they'll be portrayed as being in the back pocket of the business community.
Two things happen to politicians who pull their foot off the cost-cutting gas. Once elected, they realize the ramifications and the complex issues around trimming the budget or they realize they're going to upset many of their friends and supporters if they go ahead or both. Caught in this no-win scenario, our elected leaders try to spread the tax pain around as best they can.
Even the Fraser Institute gets that.
Tucked into their 12-page report on Tax Freedom Day is this juicy admission:
"The top 30 per cent of income earners pay 67.8 per cent of all taxes and earn 60.0 per cent of all income, while the bottom 30 per cent of all income earners pay 4.5 per cent of all taxes and earn 9.2 per cent of all income," it reads. "The overall distribution shows that Canada's tax system is effectively progressive and extracts proportionately more money from those on the higher end of the income scale."
In other words, the wealthy pay more and the poor pay less.
Sounds about right.
