Saturday, September 12, 2015

Here comes the tax collector!

The Gospel of Luke tells us that Zacchaeus was a tax collector. A Jew, he had become wealthy by performing the tax-collection role . . . and probably by inflating the amount owed and pocketing the difference. Romans administered Palestine; paying soldiers, repairing roads and aqueducts cost money, taxes had to be paid.

Resistance to paying taxes and animosity toward those that collect it aren't new by any means. Most of our other expenditures are accompanied by personal choice whereas taxes are forced upon us by law and the penalties for avoidance can be severe. Personal expenditures bring tangible benefits: food, clothing, shelter and any number of gadgets, gizmos and services that make our lives demonstrably better; tax money provides benefits, of course, but the relationship between our paying and government purchasing is far from obvious.

Knowing when we've personally spent foolishly becomes obvious rather quickly, but certainty about whether or not our tax dollars are being wisely managed is not easily reached. Conjecture, rumour, political propaganda and the complexity of government these days all conspire to muddy the water.

In Canada today, we're taxed on three levels and the entities that demand that we pay up compete with each other for their share. What is each level's fair share isn't obvious: municipal governments have to create and repair streets and roads, water and sewer services, etc.; provincial governments tax for highways, education and health care, etc.; and the federal government is responsible—theoretically—for all the stuff that we have in common from coast to coast to coast, like defence, international relations, trade, etc. Imagine sorting out the “fairness” aspect of who is responsible for what, where the margins of jurisdiction ought to be and, by extension, what makes for a fair taxation regime for each.

And then there are the questions of fairness in the collection of taxes: how much tax should be assigned to consumption (GST, PST), how much to production (corporate taxes, resource exploitation taxes), how much to wealth (property, for instance), how much to incomes (personal income tax), and in the case of the latter, how much weight should be given to ability to pay. Should every person pay the same amount (as was likely the case when Zacchaeus made his collection rounds) or should only those who earn enough to have money left over when basic needs are met be required to pay income tax?

It's no wonder that the debate about taxes degenerates into a simplistic “which party promises the lowest taxes.” It's not about low or high taxation, it's about judicious, fair taxation that provides the benefits we deem necessary for reasonable levels of security, health and infrastructure from time to time. If a federal party promises $15 daycare, do we or don't we agree that early childhood care of that kind is critical enough to add the cost of it to the tax bill? Do we believe that bombing ISIS positions is a good use of tax dollars? Should education be paid for by taxes or by individuals, and if the former, should taxes pay for education all the way up to doctorate degrees? In a time of burgeoning pensioner numbers, is it fair to tax the income earners higher and higher in order to ensure seniors' well-being? Should health care respond to need only and not to ability to pay, especially when recognizing that universal health care adds a humongous amount to the tax burden? These are the kinds of debates that need to be had before any conclusion about fair taxation can be settled.

And then there's the deficit/balanced budget question. Estimates of Canada's current debt load run from 700 billion to 1.2 trillion. Taking the low number and dividing that by the population, that works out to about $20,000 per person, or $80,000 per family of four. Only elementary school arithmetic is required to determine that if debt is mounting, taxation is not keeping up to spending. To remedy this, spending must be decreased or taxation raised. If we agree that we're getting the right amount of services from our governments, it follows that Canada and the provinces have been under-taxing their citizens and corporations for years. Low taxation levels may be job-creators, but they may at the same time be country, province, city or rural municipality cripplers.

It's a wise party indeed that can judiciously balance the right level of services with taxation, and it needs an informed and thoughtful public to choose that party to run the country. Promises of low taxes don't constitute policy, they are electioneering shibboleths. It's discussion around what-services-and-at-what-level that need to happen. The willingness to pay for them under—grant you—a fair taxation regime is really where it's at.

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