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Love filing income tax? Author of Tax is Not a Four-Letter Word says paying taxes is a good thing Derek Dunn
derek.dunn@metroland.com
News – Next to weather, Canadians love to commiserate over taxes; especially when income-tax filing season is at hand. Not so much Alex Himelfarb. He wants to change the way Canadians view paying taxes. From the H&R Block commercials bemoaning ‘tax pain’ in the backside to the dominant narrative that public revenue is money forcibly taken from hardworking taxpayers: the assumption is taxes are bad. And any person or party calling for a tax hike is laughably unfit to rule. Himelfarb is co-editor of Tax is Not a Four-Letter Word – A Different Take on Taxes in Canada. The compilation of essays by many leading experts explores vari-
ous aspects of tax policy. Himelfarb filed already, well ahead of the May 5 extended deadline. Doing so didn’t in the least faze this Ottawa resident and Government of Canada’s former most-senior non-political official. “I was just fine with filing my taxes,” said Himelfarb, one-time clerk of the privy council. “I’ve had a truly privileged life. I’m the son of immigrants and this country has done much for us.” But what of those who are not grateful for government services? those who either don’t appreciate or need programs like welfare or the old age pension system, public education or universal healthcare? Himelfarb says class stratification can reach such extremes that the ultra rich be-
lieves it is entitled to all it has, that it earned its wealth (even if inherited or had educated employees). Conversely, the poor can loose all hope and believe the system is rigged. Meanwhile the middle class will resent those beneath and forgive those above. “That’s why we need to have a conversation on how we can restore the public good,” he said. “The book is really about taxes as a proxy for how we think about our obligations toward one another and our responsibilities to the public good.” The great bulk of taxes are used to pay for social programs that benefit the vast majority of Canadians, a point Himelfarb says has been lost amid the last 35 years of Thatcherism and Reaganomics that insist on decreasing taxes ad infinitum. The issue hasn’t always been as polarized between left and right. From the early to mid-20th century most
progressive social programs in the U.S. and Canada were put in place by rightwing administrations trying to stave off communism. Leftwingers were often libertarians suspicious of government as an instrument of tycoons and their corporations. When the generation that won the Second World War returned from Europe both sides favoured social programs to aid the transition back to civilian life. “That’s why left and right don’t work very well. Progressives understand the state is necessary to contain the market and a strong civil society is needed to contain the state.” That’s why he talks about value for tax dollars, as do all moderates, because blind trust in the state is as foolish as blind trust in the markets. Both are capable of tyranny. LESS MEANS MORE
But what of the commonly held refrain: tax people and corporations less and business will thrive, creating more jobs and more tax revenue? Trickledown economics
has been tried for the past 35 years, culminating in the 2008 economic meltdown caused by deregulation and profit concentration, Himelfarb indicated. He cited a recent bipartisan Congressional Research Service study showing tax cuts didn’t deliver on their promises. Then there are the obvious successes in social welfare nations in northern Europe where standard of living and happiness indicators far surpass the laissez-faire economies of the U.S. and Japan. “The market is not everything. Where’s the evidence that tax cuts deliver anything but suffering and pain,” he said. Suffering and pain is something tax cut advocates often point to, saying the private sector is suffering therefore the public sector must be reduced. But most mainstream economists agree that, when in recession or near recession there must be stimulus spending on the public side to bolster the economy; and when the economy rebounds, governments should scale back. That is exactly what the late
federal finance minister Jim Flahety eventually agreed to do. Himelfarb agrees that a large government presence in the economy cushions against booms and busts. Sunshine lists and union bashing among cynics contribute to a culture that denigrates the public sector. Himelfarb said the highest level public servants are paid less than counterparts in the corporate world. But that is a weak response for those who say the highest paid in both sectors are raking in too much. He added that it is untrue that public servants don’t contribute anything. To those who advocate austerity measures in the public sector, they need to explain why it is good for traffic gridlock, escalating post-secondary costs, healthcare wait lines and more to continue. “Let’s at least force our politicians to answer questions,” he said. “They are fond of asking how much a new idea is going to cost, but not what is lost when they cut taxes.” See AUTHOR, page 41
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Orléans News EMC - Thursday, May 1, 2014
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