the inevitable

Among the catcalls I used to hear from wingnuts, outraged that someone might actually want to leave the US, was "Enjoy being taxed to death!" or words to that effect. Several American friends - decidedly non-wingnuts - also mentioned that Canadians pay very high taxes. And many Canadians have the impression that Americans pay significantly less taxes than they do.

If this were true, Allan and I had no problem with paying higher taxes in return for living in a decent society. The main question for me has always been, Where do my taxes go? In the US, my money was supporting foreign wars and no-bid contracts for billionaires. In Canada, a portion of my earnings support health care - my own, and everyone else's. This is a simplification, of course, but there's truth in it.

However, the wingnuts' comments begged the question, Don't you pay taxes, too? We paid taxes in the US - plenty of them. And since starting work here in Canada, we don't see much of a difference.

There's the GST, of course, and I'm inclined to view a consumption tax as regressive. My freelance income is paid in flat fees, so I don't yet know what Canada Revenue is going to take. But Allan's paycheque has the standard withholding, and it doesn't look all that different from his check in the US. In fact, he takes home a greater percentage, because we no longer have massive deductions for health insurance. We had decent health insurance, but, like most working Americans insured through their employers, we paid a small fortune for it.

This Op-Ed in today's Globe And Mail argues that Canadians shouldn't be looking for tax breaks. (I agree.)

By international standards, however, Canada is a low-tax jurisdiction, and increasingly so. In 2004, according to the Organization for Economic Co-operation and Development, tax collections by all levels of government absorbed one-third of our GDP. That ranked us 21st out of 30 industrialized nations, and fifth among the seven largest. Moreover, we have already engineered among the deepest tax cuts of any country since 1999 (when our deficits were vanquished): a decline in the aggregate tax burden that's worth $40-billion a year, and growing. We place firmly in the lowest-tax third of the industrialized world, and are slipping quickly down the list.

So we pay less taxes than most -- and we have less to show for it, too. Our education programs (including postsecondary) are underfunded compared to other jurisdictions. Our poverty is worse, and increasingly ghettoized. Our health system is stressed. Our public housing is abominable. Even our basic infrastructure (roads, bridges, and other mundane facilities) is tattered.

Most Canadians would have trouble even noticing the incremental cash from another tax cut.

Then there's the issue of corporate taxes. Most US corporations pay no taxes at all. Is this the case in Canada? I searched a little online, but didn't come up with anything solid. This article by progressive writer Thom Hartmann has been reprinted on many Canadian websites, but it doesn't say anything specific about Canada.

Perhaps come tax time, Revenue Canada will ask for a big chunk of money that we don't have, and we'll discover the wingnuts were right. Or perhaps "Canadians are taxed to death" gets filed under Persistent Myths, along with "liberal US media" and "Jews run the world".

Thoughts?