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A Good Society Has its Price

March 28, 2012


In a week that is seeing both a federal and a provincial budget come down with significant spending cuts and few solutions on the revenue side of the ledger, a new organization, Lawyers for Fair Taxation, has joined its voice to the public dialogue about citizens' responsibilities to keep a fair Canada possible. These lawyers are joining the chorus of "Tax me - Canada is worth it."

"I have been fortunate to have had the benefit of safe neighbourhoods, free health care, excellent free public school, a great university education at a time when tuition rates weren't outrageous, and subsidized daycare when I was a student," said Moira Gracey, a lawyer practicing in Toronto, "All of this enabled me to become a professional and earn an excellent income."

The group points out that taxes are an important revenue tool for funding government services, which are important not only for their own sake, but also because they are an important vehicle for reducing social and economic inequality. Lower levels of inequality have important social benefits for all that are worth paying for. These demonstrable benefits include:[1]

* Lower levels of violence, including domestic violence;
* Lower levels of incarceration
* Greater levels of trust and feelings of safety;
* Better overall health, higher life expectancy, lower obesity rates and better mental health;
* A healthy middle class, which is the economic motor of modern industrial economies;
* Higher social mobility - more opportunities for everyone in society to flourish;
* A stronger economy, based on stronger domestic demand and more productive use of capital;
* A stronger democracy and less social unrest, because money and power are not concentrated into an ever-smaller economic elite.

These overall societal benefits are enjoyed by citizens in all income groups; both high and low income earners in more equal societies also tend to be healthier, safer, and happier than their counterparts in less equal societies.

"It is only right that I, and others like me, return some of the financial benefits of those opportunities to society through our taxes," said Gracey. "A good society has a price, and it's a price those who benefit the most from it should be willing to pay."

Apart from these benefits, a progressive tax system satisfies a moral principle that those who have benefited most from the opportunities Canada has provided them and are more able to pay, ought to contribute a proportionately greater amount to keeping Canada a good place for everyone.

As lawyers, some of us often represent vulnerable people in society. We see the human effects of a failing social safety net, and the opportunities lost by intelligent, motivated individuals as a result. We can see that society is also the loser when the ideas and energy of such people cannot be fully expressed.

As lawyers, we also represent businesses and corporations, many of whom find themselves cash-rich and unable to invest due to low overall demand for their products.

The social safety net of which so many Canadians are so proud is being undermined by decades of diminishing tax revenue, including significant reductions in the tax rates paid in the upper tax brackets. Some economists have argued that for optimal economic growth, tax levels for the highest tax bracket should return to 70%.

Rather than further cutting taxes, governments at both levels should increase the progressive nature of the tax system by adding new tax brackets at the top and increasing the marginal rates for those taxes.

We disagree that Canada cannot afford higher taxes or decent social spending. We believe that Canada cannot afford the effects of increasing inequality.

(1) See The Spirit Level; why more equal societies almost always do better by Richard Wilkinson and Kate Pickett for more.

For more information contact:
Omar Ha-Redeye
Phone: 647-967-6627

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Omar Ha-Redeye


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