Taxes? Yes, please!

Recently, I received a flyer from the current governing party offering me two choices: I can pay a 5% GST or a 7% GST. In case I was uncertain of the best choice, inside a smiling man tells me “We kept our promise to cut the GST,” while a dopey-looking man is labeled as “threatening to raise it back up to 7%.”

Given the options, my choice is clear. More taxes ? Yes, please!

I’m sure that’s not the answer MP Gordon O’Connor was expecting when he sent me this flyer with his compliments. The contrast is intended to make me believe that a tax cut is in my own best interest. But although the flyer offers no context, I know that the tax debate is more than numbers.

In fact, rather than taking something away from me, taxes make a contribution to the betterment of my life, my country, and my fellow Canadians. Taxes generate the revenues that create our social and physical infrastructure, support our democratic institutions and provide a mechanism for redistribution so that no one in our financially prosperous country is left too far behind.

I’m particularly concerned about redistribution these days, since a recent census report revealed that the income gap in Canada is continuing to grow. For many of us, these stats mean that although we’re working harder or longer hours, our real wages have not changed in the past 25 years. Meanwhile, while the richest Canadians saw their incomes increase by 16.4%, the poorest Canadians have seen their incomes decline by 20.6%.

What does this growing income gap mean for taxes? Well, some would suggest that lowering taxes is the way to improve the economic situation of Canadians.

For instance, Peter Van Loan, the Government House Leader, responded to a question in the House of Commons on the growing economic uncertainty by saying, “We recognize the need to help the middle class and all Canadians economically and that is why we moved quickly with reductions in the GST from 7 per cent to 6 per cent to 5 per cent that benefited every single Canadian.”

The only problem is that many Canadians who could use economic help aren’t paying much GST anyway: basic necessities like groceries, rent and child care are all GST exempt. Similarly, the greatest income tax rate cuts in the government’s fall Economic Update went to higher earning categories and corporations. That doesn’t benefit low or middle class Canadians much either.

In fact, tax cuts over the past 18 years have resulted in our tax system being less progressive than it used to be. A CCPA study last fall reported that repeated modifications to the tax system have resulted in the top one percent of earners paying a lower portion of their income than the lowest income earners.

The result of the recent tax cuts has also been to severely curb the government’s ability to respond to challenges like economic uncertainty. The government chose not to invest in programs and services that could help Canadians in poverty, provide greater income security to working families, and take genuine action on the environment.

Low income and middle class Canadians would benefit much more from supportive programs and services than tax cuts, especially in times of recession or economic uncertainty. These can include tax credits for low income citizens with some employment earnings, like the Working Income Tax Benefit. But they should also go beyond to provide funding for social infrastructure like affordable housing, child care, adequate and accessible health care, pharmacare and dental care, training and skills development.

Wealthier Canadians also benefit from our taxes, whether it’s good roads and public utilities, public education and health care, law and order, or government regulation of the market. They can also afford to pay a greater share in taxes than lower income Canadians.

So I’ll send my flyer back. And I’ll ask for more taxes, but also more effort to narrow the growing income gap, a poverty reduction strategy, and a commitment to promoting the health and well-being of all Canadians, regardless of their income level. I believe that would be in my best interest, and the best interest of my country.