Why Stephen Harper trumpets boutique tax credits

Posted on in Governance Debates

NationalPost.com – Full Comment
August 24, 2015.   Colby Cosh

On Sunday, Conservative Leader Stephen Harper announced that his government, if re-elected, would introduce a tax credit for memberships in service clubs like the Canadian Legion or the Kiwanis. This modest measure — and Harper himself emphasized its modesty — is already being greeted with some derision. Apparently this is because a tax break for service clubs is an absurd, baroque complication of the tax code, unfit to stand alongside sensible traditions like the Prince Edward Island aerospace tax credit, the Nova Scotia digital media tax credit, the British Columbia book publishing tax credit, the Ontario computer animation tax credit, the Manitoba odour control tax credit for farms, Quebec’s tax credit “for the modernization of a tourist accommodation establishment” or the various items exempted almost randomly from the GST, such as condominium fees and music lessons.

One senses that the Canadian media have decided, curiously late in the country’s history, that tax-code wrinkles introduced with the aim of social engineering are ridiculous, if the aims thereof are conservative ones. Furthermore, we have concluded that lifting taxes on Elks or Knights of Columbus memberships, and thus putting them on more or less the same footing as religious tithes, is especially ridiculous.

The Conservative party will be awfully disappointed if the press does not engage in some snickering here. The work of the Kinsmen or Rotary is not especially visible if you never cross Eglinton Avenue; the very names of these groups have a rustic flavour on the tongue, carry a whiff of old-school WASP dominance and gray-flannel respectability. Break out into the smaller cities, if you dare, and the traces become somewhat clearer: a seniors’ centre here, an air-ambulance fundraiser there. In smaller towns, service clubs are often practically synonymous with capital-S Society. Laugh at the idea of a tax break for the Legion, but make sure you are still laughing on election night.

Of course it is a bad thing to add new complications to the tax code; of course it is to be resisted. It would be so much easier — and cleaner — to tax every group of human beings that join together for a common purpose in much the same way: subject churches, not to mention think tanks, foundations and all manner of social-justice crusades, to exactly the same treatment as Wal-Mart. I sense no appetite for this sort of utilitarian jihad — except when the Conservative party wants to boost youth hockey, gym memberships or bus passes.

When that happens, every smart young journalist immediately becomes a card-carrying member of the Economist Party, as a certain arch-rationalist and neoliberal subset of the punditariat likes to call itself. (It’s a self-serving joke, intended to evoke the fictional presence of a voting bloc that pines for evidence-based, market-aware public policy.) Can it be possible that we just need a better, more thorough and courageous Economist Party? The favourable tax treatment of churches and charities seems like a good example of the sort of “unseen” and distorting economic background that Bastiat discussed in the 19th century, and he is one of the party’s deities. William S. Burroughs thought churches were public menaces and should therefore be taxed double, “taxed out of existence”; myself, I do not go so far.

The Conservative use of boutique tax credits has been a source of irritation to some small-c conservative pundits. John Robson’s attention-getting declaration in this newspaper that he “just can’t” vote Tory made a big deal out of these tax credits (‘Why I can’t vote for the Harper Tories,’ Aug. 7). They are bad economics, or at least bad tax policy! Suboptimal! Inefficient! And thereby not conservative!

Harper’s 2009 speech defined an ideology only in a very blurry way, but he was very categorical about what his brand of conservatism is not

Robson seems, in this regard, to confuse conservatism with a preference for smaller government in every conceivable way and on every conceivable front — and as a non-conservative, I have to say, “er, I think that’s libertarianism (or minarchism) you’re talking about there, pal.” Have we forgotten that Stephen Harper all but read libertarians out of his Conservative party in 2009, at a speech to a Manning Centre conference? Smaller government is desirable, the prime minister said, but the cult of the atomized, market-driven individual gives us drug addicts and financial crises. Political and economic freedom must be “tempered” by deeper values that are a bit difficult to specify: “family,” meaning something broader than just the nuclear family, and “faith,” meaning something broader than any one purely religious faith.

Harper’s 2009 speech defined an ideology only in a very blurry way, but he was very categorical about what his brand of conservatism is not, and what he said most emphatically is that he does not put economic efficiency or rationality uppermost. That would be an odd thing for a conservative to do, as the word “conservative” has been defined anywhere for the past century. Conservative thought on this continent has always put great stock in a particular remark, almost an offhand one, from Edmund Burke’s Reflections on the Revolution in France: “To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections.”

When Harper announces a tax credit for child care or home renovations, he sees himself as supporting the paradigmatic “little platoon,” the family. When he announces a tax credit for kids playing minor hockey, that’s another little platoon, one teaching citizenship, good nature and loyalty almost as a side effect. And a service club is, in the conservative view, another little platoon, binding small communities to the world in a great network of philanthropy. (It’s not as though those goofy weirdo Rotarians helped eradicate polio from India or anything.)

Giving these clubs a tax break is certainly an exercise in electioneering and must seem very cynical to those who don’t speak or think conservativese. Indeed, the Ottawa press, which lacks almost any knowledge of this esoteric language, does not even seem to find the sop to the Kiwanis cynical — just confusing. Meanwhile, Stephen Harper, in one Sunday night stroke, emphasizes the minimalism of his ambitions for social policy, puts a little cash in the pockets of charitable citizens, maybe helps save a few Legion halls, amicably shoulder-pats his base of older, suburban and rural voters … why, who can possibly fathom such nonsense?

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