Our tax system isn’t fair. The wealthy in Canada do not pay their fair share in taxes—they haven’t for a long time. And yet, they continue to lead the anti-tax blitz. It’s an easy target for them. “Death and taxes” and all that. But here are two tax facts to keep front and centre:
- Taxes are an investment that save money for the vast majority of people. From hospitals to school buses, food inspection to police cars—taxes are the ultimate bulk buy.
- Canada's corporations and richest citizens now pay some of the lowest taxes in the world.
The fact is that most Canadians pay close to an appropriate amount of tax. The problem, and it's a billions-of-dollars-a-year problem, is that the wealthy now pay too little.
- In 1972, income tax for the wealthiest Canadians was close to 70%. By 2012, their income tax rate had been cut to below 50%
- In 1972, the corporate tax rate was 52%. By 2012, it had been cut to 25%.
Add all that forgone revenue together and our governments would have an extra $50 billion. Every year. $50 billion a year we could have be using to ease tuition hikes, pay down our debt, lower the costs of prescriptions and dentistry, pioneer research in wind solar and tidal power … The list of possibilities goes on.
And what have we gotten in return for giving up on possibilities like these? The promise has been that by going down the road of tax cuts, corporations and the wealthy will drive our economy forward by reinvesting their tax savings in new technologies, new factories, and new hires.
Yet, 30 years of practical experience shows us that something quite different happens: the wealthy simply scoop those tax cuts out of our economy, hoarde it away from the rest of us. They spend it on exploitable and compliant labour. They hire lobbyists and finance political campaigns focussed on driving our wages down. And they park the rest of it on their balance sheets, pump their share prices up, and reward themselves generous raises.
All we get from the bargain are crumbling schools, hospitals, and infrastructure. And that sinking feeling we’re never going to have it quite as good as we once did.
How do we get back on the road towards Tax Fairness?
It’s simple, really. We need to encourage our politicians to increase taxes on corporations and the rich and ease the burden on low-income Canadians. We need to show our politicians that they don’t need to promise tax cuts in order to win.
And we all need to stand up to the fear-mongering and threats that are so often evoked by tax-cutters: that companies will either bolt from Canada or outright fail.
The Robin Hood Tax is an inspiring example of how citizens can work together through their governments to set themselves back on the road towards tax fairness and safer levels of income inequality.