A little honesty in government given our circumstance would be a wonderful thing. I’m just not going to hold my breath waiting for it.
Sound government services must be paid for with current taxes. What’s so hard about considering that?
If we want a pensions system — an education system — a health care system — our garbage collected — people in poverty looked after — a military, you name it, we should be prepared to pay for it.
Not on the never-never, but right here, right now.
Doing so would force the discussion to turn on choices, of which there are many to be made.
We might decide, for instance, to handle people in poverty with a guaranteed annual income, implemented through the tax system. No additional bureaucracy or friction required: a keep it simple approach that ensures money flows.
By doing so, we do away with the extra costs of offices, forms, staff, case workers, inspectors, etc. to ensure the “system” is working. We put more of the money we collect into actually doing the thing we said we wanted to do.
Education? Hospitals? Budgets should include depreciating the assets and saving for their replacements. A school’s roof doesn’t last any longer than a factory’s or a house’s.
So when I see (as I did in BC with the school district where we first lived in that province) that over 90% of all funds were allocated to salaries and benefits, I knew the process was dishonest.
If, in turn, we stayed within what we’re willing to collect from ourselves right here, right now — no deficits, no debt — we could avoid the masses of money we do collect that simply go to pay for previous failures to collect what we were spending. “Interest” on the debt.
In Ontario, that would be the third largest ministry, and headed fast to be number two, behind health care.
We’d probably also be honest with ourselves about what a tax break is. (I don’t care whether it comes as a credit, or a deduction.)
It’s the choice to not collect what we could collect.
A charitable donation credit is forgoing tax collection. So is an oil depletion allowance, a “you live in the North” deduction, union dues, political tax credits, you name it.
Look, I’m quite happy — as with the rest of Canada’s transit users — to collect the tax credit for my monthly transit pass.
But it should be brought out not as it was — a “tax break” — but a “failure to collect” in certain circumstances.
There are rare occasions when debt in government is appropriate.
If the country is under attack — and, no, I’m not talking about the faux wars of our time, like the “war on drugs” or “war on terror” — then by all means spend whatever is needful. If we lose, the debt is moot. If we win, we pay it off.
If we’re building infrastructure that will pay off for generations in activity that wouldn’t have happened without it, that’s worth building on debt and then paying off the debt. Building an electrical grid, building a railway, building a communications system all come to mind.
If Sir John A. Macdonald hadn’t been prescient enough to nearly bankrupt Canada to build the Canadian Pacific Railway, the territories would not have been settled, Alberta wouldn’t have become a province, and we’d never have discovered its bounty in a way where it could be distributed via equalisation.
If Sir Oliver Mowat hadn’t been prescient enough to set Sir Adam Beck to building the Niagara power plants no matter what the cost, Ontario wouldn’t have enjoyed its years of manufacturing economy in the way it did.
Robert Bourassa in Québec implemented the plan of the former minister for Hydro-Québec (René Lévesque) and Québec got its hydro resources from the north. Good idea. Same with WAC Bennett in BC building BC Hydro’s dams in the 1960s.
These are worth borrowing for — you get real growth out of them with which to pay back the debt.
Otherwise? What we do with government should be done out of current revenues.
Balanced budgets, in other words.
If that means we don’t prioritize spending money on Olympic medals … multiculturalism commissions … green energy subsidies … whatever, then those become choices.
For myself, I’d keep things simple.
Everyone is in the tax system, and on the same basis.
We’re generous about where paying tax begins; if you make less than that, we top you up to that line. Guaranteed annual income.
We like competition, which means we prefer many small enterprises over a few big ones. So we tax the big more heavily than the small.
We don’t allow deductions for entertainment, debt, etc. (Deducting debt servicing from taxes in business is the engine of corporate consolidation and selling off the country’s companies using our own capital to outsiders. That eats into opportunity — dumb.)
We don’t give you depletion allowances, etc. You’re in the business you’re in.
As individuals, we don’t get deductions for registered plans, for employment costs, for moving … same story.
Charities and politicians can raise their own money, outside the tax credit system. In turn, charities can use it as they see fit (no political limits). We limit political speech by limiting what can be spent on it, by party, candidate, or third parties.
Keeping the tax system simple has other benefits.
It makes discussions like “should we tax consumption or income”, or “should we tax pollutants or semi-finished goods” into debates any citizen can follow, rather than something for a few mandarins and economists to work on.
Not having to keep “what this change means to line 428(c)” in mind makes it open to citizen involvement.
These structural decisions should be something the citizen can debate, something candidates and parties run on. As, of course, should the total tax take across all aspects of government, and the rough division between what we want going to our community … our municipality … our region … our province … nationally.
I’m not arguing for Swiss-style referenda (although you could do that), but certainly some basic ground rules.
Canadians have made it clear for years that they’re prepared to pay for what they get. They want the getting to be efficient, focused, and do the job it’s supposed to do.
At the same time, they don’t want to pay more unnecessarily. They want nonsense stopped, wasteful practices ended.
They also want their country to continue to be built, not to steadily decay.
Politicians love to run on “need”, and leave the subject of what isn’t getting done, or what bills for the future we’re racking up, out of the picture.
Let’s change the game. Demand an honest accounting from everyone in office.
And never forget the old Spanish proverb: take what you want, and pay for it.