May 10, 2010

Tax Freedom or What have the Romans ever done for us?

Just before this year’s tax deadline, the Fraser Institute issued a new thing called the Consumer Tax Index. They describe it as “an index of the tax bill … for the period 1961 to 2009.

Erin Weir and Iglika Ivanova, on the Progressive Economics Forum blog, have picked apart the flawed assumptions in the study.

For my part, this latest offering from the folks who brought us Tax Freedom Day has me thinking of Monty Python. Remember the sketch from Life of Brian where John Cleese as the anti-Roman zealot is trying to foment rebellion against the accursed occupiers?

“What have the Romans ever done for us?” he argues. The others in the room sheepishly put forward things like roads, aqueducts, wine, safe streets.

The implication behind Tax Freedom Day is that taxes are a burden imposed on us, one that limits our freedom. In a very narrow sense, that might seem the case, especially when it comes time to file your tax return.

But there is another perspective on taxes and freedom. Consider the many ways that taxes increase your freedom.

Start with education – arguably one of the greatest contributors to human freedom. Education expands choices in life and work. The evidence on earnings is overwhelmingly positive -- on the whole, more education translates into higher earnings.

Many years ago, access to education was limited to the fortunate few who could afford the cost of private education. Now tax-funded public education makes primary and secondary schooling available to almost everyone in Canada. Tax funding for post-secondary education puts this within reach of many more people than fifty or sixty years ago.

Tax funded public health care is another great contributor to human freedom. It is not just because it means almost everyone can get timely health care. It also means your access to basic health care is not tied to the job you have.

Consider retirement. During the recent financial collapse, many private pension funds went into crisis. People found their retirement savings were far less than what they thought there were. Canada’s tax funded public pension system remains on a firm footing. Funded through payroll taxes – the Canada Pension Plan – and general tax revenue – Old Age Security and the Guaranteed Income Supplement – Canada’s public pension system has freed scores of seniors from penury.

But there are other areas where taxes could expand our freedoms. Many people who have decent jobs get preventive dental care through employer provided health insurance, for which they pay premiums. People who work in precarious jobs, don’t have extended health benefits. And for folks who rely on social assistance, coverage is not for preventive care. More often than not it means having your teeth pulled. We could have more freedom if there was tax-funded public dental care for everyone.

Prescription drugs are another area where our freedoms could be expanded through a tax-funded public program.

As I filed my tax return and as I prepare to pay a little more in Harmonized Sales Tax, I say “Amen” for the freedoms my taxes buy me. If anything, I am ready to pay more taxes – and lower private insurance premiums – to pay for public dental care and pharmacare, lower tuition costs, more affordable housing, and more affordable early learning and child care. In the end, my personal freedoms are expanded when I live in a society where everyone shares those freedoms more fully.

1 comment:

  1. LOL - what a great way to make a serious point!