Over-taxed or under-serviced, both or neither? Let’s get beyond the rhetoric in Atlantic Canada

August 12, 2010

The media report that the Canadian Taxpayers Foundation (CTF) wants to open up shop in Atlantic Canada. Is this a good thing for our region?

To have an informed opinion about the CTF it is important to consider its mandate, who they are and what they could bring to the region. Their website claims the CTF represents 70,000 plus taxpayers who want: lower taxes, less waste and more accountable government. Their goal is to serve as a counterbalance to those whom they describe as having a disproportionate influence on politics in our country: big unions, big corporations, and government-funded special interest groups.  

We may have some things in common! More accountable government is definitely a goal of the CCPA if by accountable they mean a democratic government that provides opportunities for citizens to have a meaningful input into government decision-making beyond just marking an x on election day. What they want to hold government accountable for is not exactly clear.

As for being a counterbalance, we too have that as our mandate but ours is quite different from theirs. We are not an advocacy organization, but instead a nonpartisan, independent research institute producing publications and informing the public debate on issues that mainstream media and political parties rarely challenge.

Unlike the CTF, we produce peer-reviewed research (and thus evidence) to demonstrate the full implications of cutting or raising taxes. We do not sidestep them and we challenge the CTF and others – including government - to do the same. We underline which groups benefit and which do not considering issues like somebody’s gender, where they live, their family composition, in addition to their income and wealth levels. We do so in order to consider how policy decisions affect our ability to achieve a just and equitable society. The CTF simply repeats its threefold mantra as justification.

Cutting taxes for the sake of cutting taxes (or for that matter raising taxes for the sake of raising taxes) goes counter to what we know about Atlantic Canadians. We have repeatedly said that we are willing to pay taxes to get, as a society, the services we need. We are not willing to sacrifice our public education and universal health care system because the costs of losing these public services are so high. Of course, those who pay the highest of these costs are those who have the weakest voice –those who are stuck in a cycle of poverty, who can’t access the services they need. Who speaks for them? If we cut taxes and, as a result, services, what (and who) are we willing to sacrifice?

Taxes pay for the services we, as a society, need. We all agree that the tax system should be a fair one. We perhaps disagree on what is meant by fair. For us, the most critical test of fairness is whether taxation level matches one’s ability to pay. The ability to pay must consider all of the components of wealth (not just earned income)-that includes capital gains and other investment income. We must also consider all taxes including user fees for services, income tax, sales, payroll, property, and corporate taxes. In addition, we need to examine tax credits and exemptions. Beyond a simple accounting of how much money we take home at the end of the day, we need to make decisions based on who pays how much, but also who benefits.

A debate about taxes cannot happen without a broader discussion about the public services needed by all citizens in this region. We need to have a discussion about the objectives of the tax system, how the government uses our tax money, as well as about our social values as they relate to public services and the role of government. To do otherwise, as CTF often does, is to move away from an informed debate by simply adding to the rhetoric about us being over-taxed that already floods this region. Exactly what we don’t need.

Christine Saulnier, Nova Scotia Director, Canadian Centre for Policy Alternatives based in Halifax, NS.