Not all taxes are created equal
There are taxes and there are taxes, not all created equal. But to cut to the core, let’s separate corporate from individual taxes. We hear so often that we should “cut taxes”, meaning, usually, cut corporate taxes. We’re warned that unless we cut their taxes, corporations will leave for places where corporate taxes are lower.
That sometimes happens; politicians trot out the example of Google moving to Ireland “to escape high taxes”. But if corporate taxation is so high, why do so many individuals – professionals like doctors and architects, freelancers and the self-employed – why do they incorporate for the tax breaks?
As for individuals, we pay a lot in taxes, when we consider that every single purchase and permit is taxed. But we also recognize that we live and work here and taxes are necessary to keep our town, province, and nation working well. We appreciate paved streets, a health service, a legal system and a military to protect us.
We get a lot in return for our taxes, and a user-pay system would be cumbersome (expensive) to operate (you want to be billed for the kilometres you put on the roads every year? for police patrols in your neighbourhood, or pay for each time your kids use a local park? Imagine the cost just to bill all that!) We do get annoyed when our tax dollars are wasted, however “waste” is defined.
So Canadians don’t terribly mind paying taxes, if they are not squandered and if we get practical value for them.
Corporations are different. They want someone else to pay for the roads, airports, weather stations, schools, and social services which benefit them. They – often – insist they get nothing from social services, yet a reasonably affluent society that functions under law is necessary for their own survival. Taxes pay to maintain their markets, their customers, their employees, their transportation basics, protection from crime, on and on. Corporations often are just handed our national resources.
This is a hypocrisy which most people recognize. Corporations get crucial benefits, provided by taxes, and so they should pay their share, even if they dislike the regulations and monitoring which sometimes come with the benefits. We remember all this, I hope, when we hear politicians hector us about giving more tax breaks to corporations.
But here’s the rub: why do these same complaining corporations turn around and spend even more money on tax-like things, but only those they wish to support or which push only their interests?
A little digging unearths an astoundingly complex world of think-tanks, organizations (many with green-washed names), political parties and politicians, public-opinion campaigns, and political movements -- all supported by corporations. The cost of all this is a form of self-tax, millions of dollars which the CEOs direct themselves.
There are multiple studies of this propaganda network – Dark Money by Jane Mayer (US), and Cloak of Green by Elaine Dewar (Canada) are two, and are absolute wake-up calls. “Lower corporate taxes” has little to do with taxation.