Taxes and the Common Good

Taxation has loomed large in recent discussions about economic management and the future of the Canadian economy. In August, a poll reported that Canadians ranked ‘worry about the economy’ second on their list of concerns. Small wonder, given that for many Canadians, the economic language of “slow down” or “recession” could mean the difference between being employed or being unemployed, being able to afford food, and having a home. The economy is never just about numbers.

But much of the dialogue about tax cuts seems to be just about numbers. References to over-taxation and tax burdens always imply that there is a universal rule that any rate of taxation is too high. The result could jeopardize the government’s ability to pay for existing programs and to come up with new policies to address significant challenges confronting Canadians.

Unlike the current rhetoric, taxes are not a single-sided issue about how much Canadians contribute: taxes are equally about government programs and services, poverty and inequality. Taxes provide the revenues that maintain our democratic institutions, that fund our public education and our public health care, and that provide parks and public spaces. They also create crucial social infrastructure for our communities and our families, reduce inequalities and ensure that no one in our financially prosperous country is left behind.

In a country without taxes, there is little we could collectively create and maintain. In modern societies, taxes are a major contribution to the common good. They are an investment in our shared future. This investment benefits us all, but it also reflects our shared responsibility toward one another. When devoted to programs and services that promote the common good, taxes are an investment in our economic, environmental and social well-being.

Cutting government revenues through tax cuts also means reducing the government’s ability to respond to crucial challenges that confront Canadians, like environmental protection, the affordability of housing, food safety, access to early childhood development programs, the growing gap between high income and low income Canadians, and even the competitiveness of Canada’s economy.

Although tax cuts are often justified by appeals to economic growth and competitiveness, in the Global Competitiveness Index of the World Economic Forum, Canada is ranked below a number of countries with significantly higher tax rates. It is clear that what makes an economy competitive is not limited to tax rates. Corporations also benefit from infrastructure, a skilled and well-educated workforce, safe communities and public health care.

Tax cuts might have short-term appeal, but leadership must take the long-term view. What kind of Canada do we want to live in? And how do collective programs and services contribute to that? Leadership must go beyond the narrow approach that looks at tax cuts as an isolated set of numbers to view the contribution that government revenues make to our society.

Make sure your candidates know the people behind the numbers. Remind them that our taxes also represent our ability to undertake collective action. Ask them to share their vision of Canada. Challenge them to take a long-term view, rather than to focus only on this election. Let them know that you are not only concerned about your economic interest, but the well-being of all Canadians, including future generations.

Questions for Candidates

• How would your party use the tax system to promote the common good and protect the most vulnerable Canadians?
• What kinds of investments do you think should be paid for collectively, rather than through personal payments?

Links for further information

• www.cpj.ca – see especially CPJ’s articles Contributing to the Common Good and Taxes are a Common Good
• www.policyalternatives.ca – Canadian Centre for Policy Alternatives website – in particular, see their studies on taxation
• www.progressive-economics.ca – Progressive Economics Forum website –in particular, see their studies on taxation
• www.atkinsonfoundation.ca/ciw - Canadian Index of Wellbeing