Past generations knew the value and benefits of a progressive tax system
Canadians have always wanted to help out their neighbours. To pitch in when someone needed assistance. However, this was also accompanied by a healthy dose of pragmatism. This combination of social values and common sense has served us well.
Our ancestors knew that the most pragmatic way to build important infrastructure and provide valuable public services was through pooling our resources through the tax system. Individually we could not pay to build the roads or hospitals or staff the schools, but each of us, contributing through their taxes, could. This also allowed for a fair way to do so. Everyone benefited, so everyone contributed.
Tax cuts and trickle down never worked
Unfortunately, in the late 1970s, a new idea took hold among governments, businesses and many Canadians: tax cuts. It was argued that cutting taxes would result in more wealth trickling down to all of us. The evidence is in — it doesn’t work.
Overwhelmingly, wealthy individuals and large corporations have benefited from tax-cut policies. Since the 1980s, corporate taxes have been cut in half. During this period, the gap between the wealthy and the rest of us, called income inequality, has grown dramatically.
Tax cuts have created an unfair system
Tax cuts have made the tax system very unfair. Corporations are now contributing less to the common good than average Canadians are. Prior to 2014, the majority of the federal government’s tax revenues came from corporations. But in 2014, for the first time ever, the majority came from personal taxes.
And this unfair tax system has damaged the social programs Canadians value so strongly. We are now collecting billions less in taxes from corporations and the wealthy. Our public services are struggling under cutbacks, user fees, and tuition hikes, resulting in governments turning to privatization as a solution. But turning our public services over to corporations is not the solution.
It is time for tax fairness!
This can be turned around. The wealthy and large corporations can start to pay their fair share. Governments can crack down on tax havens and other schemes that allow the wealthy to avoid paying their fair share. A small tax can be put on many fi nancial services that are now exempted from taxation. And more!