Starting to talk about taxes

Posted on November 1, 2009 in Governance Debates – Opinion/Letters – Starting to talk about taxes
October 31, 2009

Re:Can we have an adult conversation about taxes? Opinion, Oct. 26

Hugh Mackenzie of the Canadian Centre for Policy Alternatives explains the relationship between taxes and services in language simple enough for a child to understand. But is it simple enough for politicians?

Mackenzie also forgot one important point. The Conservatives often say that our taxes must be in line with those in the U.S. Unfortunately, American spending has exceeded tax revenue for a decade.

Assuming the U.S. eventually pays the accumulated debt with tax revenue, their tax rate would have to exceed ours by at least three to four percentage points. And we haven’t touched on the fact that most of our health-care costs are covered by taxes while costly insurance covers theirs.

I heartily agree with Mackenzie. We need an adult debate about taxes, without name-calling, unfounded allegations and impossible promises. Since our politicians are clearly too timid, we need the media to start it off. I suggest publishing a few “tax facts” from other OECD countries. These will show that Canadian tax rates are already low – probably too low to sustain basic services at the level Canadians have come to expect.

Peter Bursztyn, Barrie

Hugh Mackenzie should have started his opinion piece about taxes by comparing Canada’s tax rate with that of the U.S. and Europe. Our true tax rate is how you start an adult conversation about taxes, not the lie from the Canadian Taxpayers Federation and the right wing about Canadians paying the highest taxes in the world. I looked up international tax rates and found that individual tax rates for Canadians are 15 to 29 per cent; the U.S. is 15 to 35 per cent; the U.K. is 0 to 40 per cent; Japan is 5 to 50 per cent; France is 5.5 to 40 per cent, etc. So what are the Canadian Taxpayers Federation and the Conservatives talking about? If we are paying less individual tax than the U.S. despite our social programs, then where is this myth coming from about Canada’s tax rate being the “highest” or “among the highest” in the world?

John Holstein, Chatham

When your economy is at full employment, you will collect more taxes without increasing the tax rate and you will be paying less in unemployment and welfare benefits. This helps reduce the deficit.

So how do we get to full employment? It seems that business takes us in an opposite direction to hit its bottom line. This is because we have almost no national strategy for business. I believe that a shift to a green economy and a shift to sell our green energy technology to Asia will get us there.

Let’s make ourselves experts in wind and geothermal energy. We need the technology here at home and we could also package it for sale to India and China.

The government should help set up contacts and provide incentives for R & D in green technology.

Michael D. Smith, Oakville

Hugh Mackenzie likes to look at economic policy through the eyes of a 4-year-old. And he seems to think a 4-year-old would see the need for high taxes.

Maybe that’s so. But an adult would understand that lower taxes allow Canadians to keep more of the money they earn. This, in turn, would promote risk-taking and innovation and encourage entrepreneurs to do what they do best: create jobs.

An adult would also understand that if government was more careful with its spending, it could make do with less.

Gerry Nicholls, Oakville

Political parties are reluctant to have a policy of increasing taxes for fear of losing elections. So political parties that get voted in are voted in by those who do not want increases in taxes. Then we have cuts in programs, reduced services and our quality of life deteriorates and the lowest income earners suffer the most. So how do we get voters to stop acting like 4-year-olds and support politicians who are courageous enough to act like adults, become leaders again and talk about increasing taxes for the good of society and the country?

David Moore, Bracebridge

While I generally agree with Hugh Mackenzie’s insightful perspective on taxation, his trivialization of the fight in B.C. and Ontario against the harmonized sales tax is unhelpful. In Ontario, many analysts and correspondents have noted the remarkable list of services (and some goods) that will be subject to an 8 per cent rise in cost. It is a “tax grab” of tremendous range and depth. It was negotiated in secret. As a flat tax, its regressive nature counters “ability to pay,” since it will affect rich and poor alike. It must be stopped in its present form.

Bernard Katz, Toronto

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