TAXES ARE REVOLTING!
THE WEST COAST LIBERTARIAN FOUNDATION
703-1180 Falcon Dr., Coquitlam, BC V3E 2K7
PH: (604) 944-2845
for the 23rd Annual Tax Protest Day
May 1, 2006 ...
The Canadian tax burden is heavy with no relief in sight
In 2005, Canadian governments (federal, provincial & local)
took $17,315 from the average Canadian man, woman, or child. Only about half of
Canadians are employed, which means that governments today, take nearly
$35,000 (!#*!) from us for every worker working.
In 1961 when Statistics Canada first measured this, governments took
only $628 per person. In the last 44 years, taxes have increased an average 7.8%
per year. Inflation has been 4.5% per year which means that the real tax burden
has increased an average of 3.2% per year. Taxes now compose the largest
proportion of the average family’s income or according to the Fraser Institute
"more of the family budget than shelter, food and clothing combined." The Fraser
Institute calculates that taxes took 33.5% of the average families income in
1961, whereas in 2005, taxes now amount to 46.7% of the average family
Why are taxes increasing?
Taxes keep rising because governments keep spending more. Governments now
spend nearly $16,240 for every man, woman and child. (For the last few years,
governments have collected more revenue than they spend because Canadians are
becoming increasingly worried about our extremely large government debts and
future liabilities.) As long as governments continue to spend a large portion of
our economy, we are going to have pay a large portion of our earnings to them.
Nothing is free. If governments continue to spend, someone is going to show up
at your door asking you to pay.
Can we get someone else to shoulder the burden?
Demagogues keep promising that we can have all our government goodies for
free if we can just get someone else to pay for them. Usually the rich or the
corporations are offered up as the victims. But the rich are already paying
much more than others are paying. According the Fraser Institute’s annual
Canadian Tax Simulator, if we rank Canadians by their income levels, the top
half of earners are now paying 85% of Canadian taxes. The top 20% of earners pay
53.2% of taxes and the top 10% of earners pay 36.2% of the taxes. The poorest
10% of Canadians pay less than 16% of their income in taxes while the richest
10% pay 58% of their income in taxes.
If you check the Canada Revenue Agency’s Income Tax Statistics out of 23
million returns filed per year, only 4.3 million reported a total income higher
than $50,000 per year. Yet these 18.6% of returns accounted for 70.0% of income
taxes collected! Of the 3.4% of returns that reported an income greater than
$100,000 per year, this accounted for 34.2% of income taxes payable.
How much more can we ask the productive to pay before they start pursuing
greener pastures especially when it the high earners who are most able to find
better opportunities? Also, what does it mean for the health of politics when
the majority can vote for "bread and circuses" that are being financed by fewer
and fewer net payers?
As for corporations, these are just voluntary groups of people (workers,
owners) who believe that the corporate form of business organization makes them
better able to deliver what customers want. Few people seem to realize that
income earned by corporations is already double-taxed in Canada. We tax the
corporation when it earns income and then again when corporate profits
are sent to shareholders. Corporations come to Canada because owners want a
return. If we tax them too much, they go elsewhere and Canadians workers and
customers will have fewer choices and fewer opportunities.
A thought experiment
Imagine that you and a few friends decide to go to a restaurant. But instead
of each ordering your own choices, you decide to use the "government" method to
order. Each is asked to pay into the pot depending upon how much income they
earn or how valuable their house is. Then we vote for what type of food to buy
with the money we have collected.
What should the club do about free loaders who never buy cigarettes, drive
fuel-efficient cars or live in run-down houses? What is to stop some friends
from hiring expensive accountants to make income appear smaller? How much
attention should we pay to minority tastes who insist that a very expensive food
is their basic requirement?
For tiny groups of closely related people, this method may work, but what
happens when the group grows to reach a hundred, a thousand or 32 million (the
population of Canada)?
There must be a better way
Consider the destruction of social good will that comes from asking people to
contribute to a central pot. People have an incentive to arrange their lives in
such a way as to pay a little as possible, but the same time complaining about
other people who act similarly. Some will create artificial businesses, take
advantages of loopholes or lobby for special legislation to tilt the burden of
taxes onto others. And on the spending side, because services are to be paid
from the central pot, you are likely to ask for better services than what you
would want if you had to pay for them yourself.
Libertarians want to reduce the role of the "government method" in our lives.
Most people want many of the services currently provided by government, but
throw up their hands in despair at the destructive political game that taxes and
spending have created. The way out is to restore more personal responsibility
for the services currently provided by government. If we had to pay directly for
these services, we would insist on better value and more appropriate services
for what we were wiling to pay.
The Libertarian Alternative
There is no magic. This will require hard work. Too many voters still think
that a fairy godmother will give them expensive government services for little
cost. Libertarians want to harness the incentives and rewards of the market to
direct spending to that which gives the best return. Instead of paying taxes,
parents with more money in their pockets could afford to pay directly for
education. This would cause a blossoming of alternatives as schools would be
have to find out what parents most wanted. If patients got their taxes back and
had to pay directly for health care, there would be no immediate miraculous
cure-alls. But instead of relying on the (hopefully) saintliness of doctors,
financial incentives would align with the hard work of supplying patients with
the most appropriate care. Over time, think of what the ingenuity of doctors
could come up with IF they were freed from our Canadian health monopoly. Think
too of the advantages of asking the Post Office, CBC or ICBC to satisfy willing
customers instead of depending on taxpayers or government restrictions of
Tax Protest 2006
On this day, when our income taxes are due, you got a taste of the
real cost of government. Did you enjoy spending hours trying to
figure out what you owe, trying to understand the complications of qualifying
for a deduction, wondering if the quality of life lost to qualify for a
deduction is worth the tax savings?
Your life, your time, your sweat has been confiscated from you to serve
old-fashioned group-think. If you want things to change, start by considering
the advantages of libertarianism: choice, liberty and greater self
Click here for an earlier article.
Saturday March 20, 2010
Citizens Alliance for Property Rights (CAPR), Seattle
Wednesday March 31, 2010
early-bird registration closes for "Capitalism and Morality" all-day seminar
in Vancouver on May 8, 2010.
Saturday April 3, 2010
6pm: Supper Club with Morgan Poliquin,
Cheers Restaurant in North Vancouver
Sunday April 11, 2010 and the 2nd Sunday of every month thereafter
10AM sharp to whenever: Executive Meeting at Paul Geddes'.
Everyone welcome. Please email or call Paul at 604-944-2845
to confirm time and place. Includes LPC teleconference starting at 1pm
Saturday May 8, 2010
"Capitalism and Morality" all-day seminar, sponsored by
Jayant Bhandari - early-bird registration closes March 31, 2010.
July 8-10, 2010
FreedomFest, Las Vegas.
round the clock: please join the
LP discussion forum.
Take on these or other topics.