Taxes are bad?

Posted: December 14, 2006 in Uncategorized

In Canada it is an unquestioned article of faith that taxes are – at worst, a Satanic invention – at best, a necessary evil that needs to be restrained. Opponents of taxation argue that government taxation restricts economic growth and makes us poor. The sooner taxes are reduced, the better for all, they say. In the words of Prime Minister Stephen Harper , “all taxes are bad” (presumably this includes the ones that pay his salary).

The tax cutters come in all sizes, shapes and political persuasions. Even Manitoba’s NDP Premier, Gary Doer, boasts of having brought in “significant and sustainable tax cuts in four main areas: personal, business, property as well as Manitoba’s first corporate income tax cut since the Second World War.”

When social democrats like Doer shamelessly proclaim neo-con dogma, it seems unlikely we will find politicians who favour maintaining taxes, or good heavens, increasing them. And it’s too bad, because there is strong evidence that taxes are good for us. A study conducted by Neil Brooks and Thaddeus Hwong, and published by the Canadian Centre for Policy Alternatives December 6, 2006, argues convincingly that “tax cuts are disastrous for the well-being of a nation’s citizens.”

The study compares high-tax Nordic countries and low-tax Anglo-American countries on 50 social and economic measures and finds the high-tax Nordic countries score better in 42 of them. For example, the high-tax Nordic countries have:

  • lower rates of poverty, more equal income distribution, and more economic security for their workers
  • a higher GDP per capita (GDP is “gross domestic product” — the total market value of all the goods and services produced within the borders of a nation during a specified period.)
  • higher rates of household saving and net national saving
  • greater innovation, including a higher percentage of GDP spent on research and development
  • higher rates of secondary school and university completion
  • less drug use, more leisure time, and higher life satisfaction

The CCPA says “the U.S. falls near the bottom of the 21 industrialized countries in a strikingly large number of social indicators. It also ranks as the most dysfunctional country by a considerable margin. In contrast, Finland ranks near the top of the industrialized world in most of the social indicators and has been named the most competitive country in the world by the World Economic Forum four years in a row.”

Canada falls somewhere between the two extremes but our political and business elites seem dedicated to accelerating our race to the bottom.

The 55-page study is available for download free of charge. You’ll need Adobe Reader to open the 512kb file.

It’s well worth reading. And the next time you hear politicians chanting neo-con mantras (taaaaaxxxx cuuutttsss . . . taaaaaxxxx cuuutttsss), spank them with it (metaphorically speaking, of course). Then, sit them down and educate them. With a federal election (and a Manitoba provincial one) around the corner, there will be lots of opportunities.

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