This week, we’re going to take aim at a popular and highly inaccurate meme.
It comes in a large variety of forms, but they all end in the same cryptic message: “Taxation is theft.”
It rolls off the tongue nicely. It’s an easy slogan to feed to crowds of angry people so they’ll vote for you. And it’s complete, utter muskox excrement.
Unless you happen to live in the middle of nowhere, making absolutely everything you use out of the materials around you and never, ever interact or trade with society or use any technology that needs to be manufactured — including ammunition — you are benefiting from taxation. I’m not sure how you would possibly be reading this editorial since you wouldn’t have internet or any means of mail delivery, but we’ll let that pass for the sake of this example. The key point is without taxes we wouldn’t be able to conduct business, grow or function as a civilization.
Here in the NWT, our businesses are crippled largely due to the lack of roads. Any roads that are built are constructed using tax dollars. Roads made by businesses, like the ones running to and from mines, usually have very specific purposes and almost always stop being maintained after the mine closes. Similarly, we’re not going to volunteer months of our time to construct a road ourselves. We want the government to pay someone competent to do it.
In the interim, government tries to help business through subsidies, which is essentially using taxes collected from one group to offset costs to another. The fossil fuel industry basically runs on this system — the International Monetary Fund reports that governments subsidize fossil fuel companies to the tune of $7 trillion per year. That’s $7 trillion in taxes that someone else has to come up with, ie: the rest of us. In theory, these subsidies are an investment as they translates into larger economic activity when projects create jobs. But it wouldn’t happen if not for the initial pool of tax dollars made available.
Taxation is not theft — it’s the pooling of our resources to accomplish bigger things as a society. Anyone who tells you taxation is theft is trying to sell you something.
What is true is that the tax burden has shifted disproportionately onto the backs of the middle and working classes. This is entirely the middle and working classes’ fault — they make up the majority and they keep voting for low taxes for the wealthy. They’ve done so since the 1980s, when the ideology of slashing government deficits while simultaneously slashing taxes for top earners became required policy. Canadian voters have been so adamant that the aristocracy shouldn’t pay taxes that even the NDP hardly suggests raising taxes on the rich anymore. The message voters have sent to governments is clear — solve more problems with fewer resources while we watch our rich live playboy lifestyles, before they ultimately move to the United States because it’s warmer, taking all the subsidies we’ve given them.
What most middle and working classes don’t seem to realize is when they vote to slash taxes, they rarely see any results because their incomes put a limit on how much the government can collect already. Most big tax reduction bills benefit the ultra-wealthy and few else.
This has provided valuable cover for the wealthy to price gouge and otherwise take advantage of public ignorance. One thing I always find entertaining about anti-tax crusaders is they don’t seem to have any issue with costs going up for any other reason than taxation. Price of gas went up because Exxon-Mobil said so? That’s capitalism. Carbon tax to try and avert climate disaster? That’s theft.
You can see this phenomenon happening in real time as economists continue to point out that carbon pricing’s impact on the cost of living has been minimal — what has really impacted the costs of items is supply chain disruptions from the Covid-19 pandemic, climate change caused disasters and completely unnecessary wars. Also, there appears to be some level of price gouging occurring — major grocery companies were caught operating a bread price-fixing cartel from 2001 to 2015, forcing Canadians to pay far more for bread than it’s worth. This scheme does not seem to have created any new jobs in the bread-making industry, but it’s worth noting the CEO of Loblaw makes roughly $8 million per year and other CEOs of grocery chains are in a similar pay grade. Yet somehow it’s those damn environmentalists who are causing all the problems — at least that’s what the people actually causing the problems want you to believe.
Our problems exist because we allow the wealthy to flaunt their privilege and blame the government whenever the consequences of doing so become apparent. If we had a proper tax system like we had from the end of the Second World War to about the 1970s, we wouldn’t need as many consumption taxes to cover the gap.
Even the fact you’re reading this is owed to taxes — someone had to pay a teacher to teach you to read. If literacy and education were up to business, you would know enough to do your job and that would be it. Any further knowledge would be a distraction and have no productivity benefit to the company.
So please stop copying and pasting this silly slogan. You are not being a rebel. You’re not liberating anyone. You’re simply being a fool.