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Sheila Comes Clean

June 21st, 2006

Speaking of the Toronto Sun, Sheila Copps officially resigned from politics today. Not in so many words, but she wrote a column declaring the virtue of high taxes:

We “celebrated” Tax Freedom Day five days earlier this year — this past Monday, nationally — according to the Fraser Institute. On their website, they proudly proclaim Tax Freedom Day as the day “Canadians started working for themselves.”

Borrowed from a neo-con American think tank, the idea has been trumpeted by the institute as a way to draw attention to the total tax burden faced by Canadians. Most of us feel we probably pay too much in taxes and a “freedom day” is a simple way of signalling that enough is enough.Presumably, the earlier in the year we achieve tax freedom, the better off we are.

The whole notion behind “tax freedom” is to highlight the high cost of government with absolutely no context or background. The institute also studies the quality of public and private education in several jurisdictions. Presumably, some of those hard-earned tax dollars actually go to support the teachers who provide the education that we deem so crucial. But “Tax Freedom Day” doesn’t address the quality of those services.

Likewise, the calculation lumps social security, pension and hospital taxes together with income taxes and the so-called “sin” taxes. Even include royalties on natural resource revenue are included in the calculations. …

The deterioration of public infrastructure is visible all around us. Across the country, water treatment is insufficient or non-existent. Not a week goes by without boil-water advisories being issued in rural and remote communities. Major urban areas are choked by increasing traffic levels unmatched by public transit investments.
the earlier in the year we achieve tax freedom, the better off we are…

First off she disparages the idea of tax freedom day by a) calling it an “Borrowed from a neo-con American think tank…” b) declaring that “…the calculation lumps social security, pension and hospital taxes with income taxes and the so-called “sin” taxes. Even include royalties on natural resource revenue are included in the calculations [sic]. c)””Tax Freedom Day” doesn’t address the quality of …services.”

On point a), so what? American’s can’t have a good idea? “…neo-con American” is nothing more than a pejorative term. Like saying the ACLU is an American commie organization. Have a criticism of where this comes from Sheila? Lets hear it. But “American neo-con” is meant to create an emotional response in your readers, not an intellectual one. Ask your editor the difference if you don’t know.

On point b) the short response is of course it covers all of that. The design of this measurement is to let Canadians see how much of their income, how much of the countries wealth, is being gobbled up by government. It shows the size of government in a way that is easy to understand without a degree in economics. Only someone who doesn’t want Canadians to know how big and cumbersome their government has become could object to that. Sheila, of course, objects.

It is point c) where she makes most of her argument and, like a lot of bad arguments, it takes a simple truth and incorrectly attributes cause.

“The deterioration of public infrastructure is visible all around us.” Yes it is, a simple truth. The problem is, she then goes on to associate this deterioration with lower taxation. However, there is no correlation between high taxes and high public service. Over the last thirty years, taxation has gone through the roof in this country, while public services have gone in the toilet. The very (very!) modest tax decreases Canadians have seen in the past decade have not caused the deterioration of public services. Bad government for the last thirty years has caused a deterioration of government services.

I would argue even, that higher taxes result in a deterioration of public services. Here’s why. More taxes result in bigger government, who then branches out into and ever-greater number of services. As they do, they focus less on services already provided. The roads are deteriorating not because Mike Harris cut a few taxes, but because government doesn’t care to fix the roads any more.

In business, companies often expand into areas that are separate from their core area of expertise: note Microsoft going into game machines. When companies get in trouble the first thing they do is get out of those areas of their business that are not directly related to the bread and butter of their business. American car companies used to make motorcycles, boat engines and various other non-car items. As they have at different times faced financial challenges, they have shed those areas to concentrate on building cars. Even today, they are getting out of non-core areas of their business, such as the parts business, where they can.

So it goes for government. The bigger it gets (represented by an ever larger share of the nations wealth), the less focused it becomes and the more services suffer.

Frankly, when I pay between 45 and 50% of my income to various levels of government, those governments shouldn’t be crying poor, and they shouldn’t be always looking to cut services due to affordability. The problem Ms. Copps is not that we don’t pay enough, the problem is too many politicians piss away ever more money on idiotic ideas like free flags and the CBC.

But hey, the next time Sheila asks for your vote down there in Hamilton East, remember she believes that you need higher taxes! And don’t complain when you get what you ask for.


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