Happy Tax Benefits Day! A reply to the Fraser Institute

Posted on June 7, 2011 in Governance Debates

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cwp-csp.ca – blog
Tue, June 7, 2011.   Rob Rainer

It’s June 7 and, in reply to the Fraser Institute’s announcement of yesterday being Tax Freedom Day 2011 in Canada, happy Tax Benefits Day 2011!  A day to remind ourselves that, far from being “bad” – as even Prime Minister Harper is on record as believing – taxes and our willingness to pay them make possible our democratic institutions and the many public goods and services that Canadians value. As noted by journalist Linda McQuaig and taxation expert Neil Brooks, in their 2010 book The Trouble With Billionaires (click here for a review, and here for another),  these include “an education, pensions, police and fire protection, national security, roads, highways, bridges, canals, libraries, museums, parks, sewer systems, garbage pickup, snow removal, water purification, food inspection, disease control, and so on.”  (See Canada’s Quiet Bargain: The Benefits of Public Spending, by Hugh MacKenzie and Richard Shillington.)

Decades of anti-tax rhetoric – the cries for “tax relief” from the “tax burden” – have undermined public appreciation of sufficient and fair taxation.  And yet there is evidence that nations in which citizens are prepared to support a deeper public pool of revenue are economically more competitive and have a higher quality of life, with lesser poverty and wealth inequality, than lower-tax nations. (See The Social Benefits and Economic Costs of Taxation: A Comparison of High- and Low-Tax Countries, by Neil Brooks and Thaddeus Hwong.)

In The Trouble With Billionaires, McQuaig and Brooks explore the danger of deep inequality – notably its impact on democracy.  (See also the leading work on inequality by The Equality Trust.)  The authors conclude that the key to combating inequality and to supporting critical investments in valued public goods and services is to build a more progressive (fair) tax system. They have a number of recommendations to accomplish this, including to enact an inheritance tax (applicable only to the very rich, affecting only one to two percent of Canadian families) and to use the proceeds to introduce a new education trust for every Canadian child.

But of all the recommendations of McQuaig and Brooks, the most important may be to “strive to bring about a change in social attitudes toward taxation and its essential role in a democracy.” Hence the inauguration of Tax Benefits Day – to fall on the day immediately after the Fraser Institute’s Tax Freedom Day, to counter the misguided view that taxes are bad.

We welcome enquiries from organizations that would like to work with Canada Without Poverty to organize Tax Benefits Day 2012 and beyond. If interested, please send a message expressing that to info@cwp-csp.ca.

Rob Rainer
Executive Director / Directeur executif

Working in alliance with the CWP Advocacy Network / Travaillant en alliance avec le Réseau de revendication CSP

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