Tuesday, April 14, 2009

Lack of harmony on taxes

For the most part, free market think tanks and conservative advocacy groups are allies in the war against big government.

But typically, they part ways when it comes to one issue: consumption taxes.

Think tanks, and for that matter most economists, tend to support consumption taxes as more efficient and more business friendly.

Advocacy groups, on the other hand, see them as nothing but a tax grab.

We see this difference of opinion playing out right now in Ontario, where the Liberal government is in the process of "harmonizing" the PST and the GST.

The think tanky C.D. Howe Institute thinks it's a great idea, whereas the advocacy-oriented Canadian Taxpayers Federation says it's a disaster.

I remember a similar split happening back in 1989 when the Mulroney government was implementing the Goods and Services Tax.

At the time I was working for the National Citizens Coalition and one day we held a meeting to determine our stance.

Somebody at the meeting noted that the Fraser Institute had come out in favour of the GST for all sorts of valid reasons, so perhaps the NCC should too.

At which point, our political consultant snorted: "The NCC can never, ever come out in favour of a tax. Your supporters would revolt!"

So we bashed the GST like crazy -- which upset some economists but made our supporters very happy.


BillM said...

Let's look at who pays income and investment taxes. Hard working people and investors in Canada's future pay these taxes.
Let's look at who does not pay these taxes, the underground economy, drug dealers, thieves, prostitutes, and nearly half of the least productive members of our society.
Consumption taxes tend to get revenues from all of the above, maybe allowing more money to be invested.

matt finlayson said...

Trying to harmonize taxes is like trying to harmonize three people with a tin ear. Hearing it-if taxes could sing- sounds like planned chaos at best, and legalized plunder at worst.

In regard to BillM's last paragraph, you would have more money to invest if you started to eliminate taxes altogether rather then trying to fairly, tax everybody.

Matt Finlayson, Toronto

BillM said...

Gee Matt, I sure would love to eliminate taxes but that is not going to happen.
The most important change of thinking required is that ALL citizens need to pay rent to live in the country. In fact today the people who pay the largest taxes generally use the fewest services. Those who pay no taxes use the most services and often are actually paid to live in this country. This is hard to justify.

Matt Finlayson said...

Bill: The welfare state depends on taxes (legalized plunder)whomever it comes from.

No taxes no service.

The welfare state is not how this country was built.
Free money attracts dependency from inside the country and outside.

Matt Finlayson, Toronto