Put equality and community at centre of Liberal policy

TheStar.com – Opinion – Party elder advocates guaranteed income and thorough reform of taxation system
Published On Fri Jan 29 2010.   Tom Kent

In the first article of this series, Tom Axworthy emphasized Canada’s need for a strong commitment to equality and community. That was the driving force of liberalism in its creative periods. It should be again.

The policy problem is that there are many inequalities to combat, anti-social practices to overcome. Uncertain politicians take refuge in talking vaguely about any and all. A reforming party becomes serious when it has plain priorities concentrated on a few, coherent objectives.

Even right-wing economists recognize that contemporary technology makes investment in the abilities of people our prime necessity. Liberalism will come back to life when it embraces a new national policy: a summons to voting Canadians today to make it possible for all our children and grandchildren to become the citizens of an enlivened Canadian community tomorrow.

Canadians have never lacked community spirit in their neighbourhoods. The task of statesmanship is to enlist the same sharing attitude for national benefit.

One child in 10 now grows up in poverty. Not only is this morally indefensible in a rich society, it impairs the abilities on which that richness will increasingly depend. The first concern must be to eliminate child poverty.

It cannot be done by federal action alone. To be free from poverty requires about 50 per cent more money in a large city than in a small community. National revenue cannot be used to guarantee people more income in Toronto than elsewhere. As the beginning of a realistic minimum countrywide, I suggest “a thousand a month.” Low incomes would be made up to an annual $12,000 for single people, appropriately more for families.

That basic assurance would greatly reduce poverty, not end it. Necessary supplements are federal business on Indian reserves. Elsewhere, social services and income additions, including the housing allowances required in larger communities, are provincial responsibilities.

So is schooling. But Ottawa has a role both before and after. It now contributes to daycare. The provision is generous if the parents are well off because the method is to deduct the fees from taxable income. The equitable way would be a sliding scale, related to income, for reimbursing the costs of care, especially of preschoolers. For many, early childhood socializing and learning are the foundation for later education.

Health care is even more important. It is still concentrated on treating people when they are sick, rather than promoting health. We need the prevention services that are particularly important in youth. They will not get priority by just throwing more money at the provinces. Extra funding should be directed strictly to comprehensive care for young children, extending as soon as possible to teenagers.

Almost equally important is training in contemporary work skills. The present federal effort is linked with unemployment. Industrial progress requires new skills also for entrants to the labour force and for people trapped in jobs below their potential. Necessary public financing could be in the form of advances recoverable by a graduated surtax on the trainee’s subsequent earnings.

An innovative, enterprising economy is made by people. Investment in people will give them the most important tools for good, productive jobs. They also need the support of modernized infrastructures and public equity to assist private finance in new ventures, particularly to green the economy.

All this is a program not for tomorrow but for progressive action over a four-year government term. In total, however, a new national policy will have heavy costs. The country can, should, must afford it. Proponents have to say how.

In the aftermath of the financial meltdown, people are already worried about deficits and debt. They will be more worried as interest rates have to rise. There is no point in urging social reforms if the need for more revenue is evaded. It is not faced by talking about going back to 7 per cent GST, the tax that Liberals promised to abolish when they last had a coherent policy.

Today reformers will succeed only if they have the political courage to include thorough reform of taxation. The necessity for more revenue must be seen not as an obstacle to social progress but as an opportunity for it.

The present tax system is itself the source of massive inequality. Though moderate wages and salaries pay severe rates, other sources of money are taxed much less or not at all – including even the large inheritances that are the most arrant perpetuation of inequality. Countless gimmicks and concessions reduce the liabilities of well-to-do people and large corporations. Far from being friendly to enterprise, business taxation is designed for corporate grandeur and reducing competition through mergers and acquisitions. There has been no attempt to adapt tax administration to the globalization of finance. Avoidance and evasion are so common as to have become respectable.

Thorough tax reform is complex and some of it will not be quick. But much could be done soon to make the system both less corrupt and far more friendly to productive enterprise, as well as to yield much more revenue for community purposes.

The Liberal conference in March is billed to think about Canada seven years hence. If that is seriously intended to guide current policy, most attention will be given to the advancement of our young people and the enterprise of Canadian-owned business; but that talk will be academic unless it is supported by a plan to remodel the way we tax.

Tom Kent was a major participant in Liberal policy during the years of Lester Pearson’s leadership.

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