Taxation integral to social fabric of the nation

Little to celebrate with Canada's Tax Freedom Day.

Pardon us if we neglected to celebrate.

Last week was Canada’s Tax Freedom Day, where calculations done by the Fraser Institute draw attention to the amount of taxes Canadians pay each year to local, provincial and federal governments.

The idea is that if Canadians were required to pay all taxes up front, they would have to give governments each and every dollar they earned before Tax Freedom Day.

“It’s when we start working for ourselves and not for the government,” reads the slogan.

This year, Tax Freedom Day fell on June 11, one day later than last year, due in part to increased EI premiums at the federal level and rises in B.C.’s medical service plan payments. The Fraser Institute calls this a troubling trend which, they note, is compounded by the fact that the federal and almost all provincial governments are running deficits this year. If Canadian governments covered their current spending with greater tax increases instead of borrowing the shortfall, Tax Freedom Day wouldn’t arrive until June 23.

Sounds pretty depressing, doesn’t it? It’s the kind of statistic that gets people all hot under the collar. After all, who likes to pay taxes instead of pocketing that money for a new car or a trip to Disneyland? We’d have more coin in our pockets and life would be sweet, right? As with many statistics, there’s a catch.

As Vancouver Sun columnist Craig McInnes has rightly pointed out, the Fraser Institute’s calculation fails to account for how you benefit from paying taxes.

Do your kids go to school? Did you?

Do you drive on the roads? Does water come out of your tap when you turn it on?

Do you visit the doctor without being presented with a bill for service or get that knee operation or have some of your prescription drug costs covered?

Do the police come if you call because someone’s breaking into your house?

Do you get Old Age Security payments?

Do you take comfort in knowing that if you suddenly lost your job, there would be financial help for you and your family?

These things and more are why we pay taxes — they fund projects and services that no individual could ever afford to take on. Yes, one can argue that we need to keep a close eye on our tax dollars to ensure they are spent effectively, but really, imagine what living in a country without taxes would look like. Our bank accounts might look richer, but think of how much poorer Canadian society would be.

 

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