The true cost of high quality public services

Posted on November 25, 2013 in Governance Debates

TheStar.com – business/personal finance – Politicians win elections by promising painless tax cuts. A new book urges voters to ignore the rhetoric and start to value their public services.
Nov 24 2013.   By: 

Rob Ford was elected as Toronto mayor in 2010 after promising to restore respect for taxpayers.

Stephen Harper became Prime Minister in 2006 after promising to chop the goods and services tax (GST).

Tax is a dirty word in politics, where candidates try to give the illusion that we can enjoy lower taxes and a higher standard of living. That’s nonsense. We get valuable services in return for the taxes we pay.

A new book, Tax is Not a Four-Letter Word, tries to make us realize the vital connection between taxes and the public good. The inspiration was the Conservatives’ cutting two percentage points from the GST by 2008.

The move was a “political no-brainer” since most Canadians hated the tax, say father and son team Alex Himelfarb (a former top federal civil servant) and Jordan Himelfarb (an opinion editor at the Toronto Star) in their preface to the essay collection.

What made it surprising was that this massive tax cut — a $14 billion bite out of federal revenues — was implemented by a minority government with almost no pushback and no discussion of the consequences.

Other large tax slashes followed in rapid succession, again with no debate.

Canadians value their high-quality public services, such as education and health care. Many understand that public services democratize consumption and help tame the market forces leading to income inequality

Yet they still fall prey to the false promises of politicians who say tax cuts won’t change anything and may even improve their lives In the book, economist Hugh Mackenzie urges readers to think their way through the day, making a note of every time they use, consume or benefit from a public service.

Here’s what happened when he did it:

  • The alarm clock buzzed and he turned on the light. The electricity was distributed to his home by a public utility and probably generated by a public utility.
  • He used the toilet and flushed. The waste disappeared into his home’s plumbing system, to be distributed and processed kilometres away as a public service, thanks to the taxes he paid.
  • He brushed his teeth using water that came out of the tap when he turned the handle, water that was there because he paid his taxes.
  • He drove his car down a street that wouldn’t be there if he hadn’t paid his taxes. He dropped off his child to catch a bus (paid for by taxes) to go to school (also paid for by taxes).
  • He made it to his destination on crowded roads without incident, thanks to the traffic signals and police officers keeping him safe (also paid for by taxes).
  • At the end of the day, he listened to CBC radio news in the car and sat down to dinner without thinking about the safety of the food he ate, thanks to rules created, enforced and paid for by taxes.

Public services are so pervasive that they’re taken for granted, distorting our perception of the choices open to us.

“Conservatives have taken full advantage of the invisibility of public services,” he writes. “And until we start to pay attention to the value we receive from the public services we use, that will continue.”

This is an academic bookend, whose small print and abundant footnotes will not appeal to general readers.

But since November is financial literacy month, I’m happy to see a concerted campaign to balance the debate and take taxes out of the closet to which they’ve been relegated.

In the future, we’ll need more public investment as we cope with an aging population, growing income inequality and the slow-moving crisis of climate change, says Mackenzie (the book’s liveliest commentator).

“We must have that adult conversation about the public services we need, and the taxes we’ll have to pay to provide them, and we must have it soon.”

< http://www.thestar.com/business/personal_finance/2013/11/24/the_true_cost_of_high_quality_public_services_roseman.html >

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