Monday, June 03, 2019

History of taxation

An essay on austerity politics from the blog of Alex Himelfarb, sociologist, former top federal civil servant:
In one way or another, Canadians have been living with austerity for several decades. Admittedly, we have experienced nothing like what the Greeks or Spanish have gone through. Ours has been an austerity in slow motion, but austerity nonetheless and austerity largely self-imposed.
In Canada, for example, taxes as a percentage of the economy are lower than they have been since the days before medicare and universal pensions. Total government spending as a portion of the economy is below the OECD average. And when it comes to social spending, we are near the bottom. Here in Ontario, following a round of unaffordable tax cuts, cuts to vital services accelerate, even though Ontario’s per capita spending is the lowest of all the provinces.
And while Canadians not so long ago voted for governments that vowed to end the austerity, the previous decades of tax cuts constrained their options and none were willing to reverse those cuts in significant ways. Any tax increase for some was typically joined by an even more costly tax cut for others. And, now, for many, austerity at full throttle seems to be making a comeback.
Is there a counter-argument to this? I mean, there are conservatives who promise "We'll cut taxes." But there a case being made that, contra Himelfarb, today's taxes are higher than they used to be? Or that in a complicated society like today's, we have less need for public services like health and education?

Follow @CmedMoore