Ten Tax Myths
P R É C. S O M M A I R E

Myth 10
When asked what governments should do with their surpluses, Canadians say that they want tax cuts. Individual consumers know better than governments how to spend their money

 T his myth, for the most part, is neo-conservative wishful thinking. After years of calculated deficit hysteria and huge cuts to social programs, those wanting to “downsize” government were hoping that people would be eager to demand tax cuts. In Reform Party parlance, the product is no good, so give the customers their money back.

Conrad Black’s National Post has taken this wishful thinking to its most absurd level, declaring in an editorial that Canada is in the grip of “tax rage...[which] has many of the characteristics of a forest fire about to jump a lake.” (April 1999).

As it turns out, Canadians’ strong communitarian values — and sheer practicality — are very resilient. Some directed polls, in which people are given a list of options to choose from, suggest tax cuts are popular. But, given openended choices, Canadians consistently choose to put governments’ surpluses into Medicare, education, job creation, child poverty, child care, and debt reduction before they choose tax cuts.

A Globe and Mail Mail/Environics poll in late 1996 showed that only 9% of respondents wanted tax cuts — and this figure was only slightly higher (11%) for upper-income Canadians. Thirty-one percent wanted money to go to job creation, 25% to health care, and 13% to children of poor families.

Even in Alberta, where the government is committed to a neo-liberal agenda of downsizing government, polls have shown scant support for tax cuts. The government, in fact, conducted poll after poll in the late 1990s, hoping for better results to justify its ideological commitment to such cuts. In every poll, however, tax cuts were rejected.

Typical of the results was an Environics poll in 1997, in which 37% wanted the Alberta government surplus to go to education (where cuts had been severe), 29% to health care, and 22% to job creation. Only 11% wanted to pay down the debt, and a minuscule 5% wanted tax cuts. It wasn’t until 1998, after years of government and media promotion of tax cuts, that opinion began to shift in favour of cuts[27].

And in Ontario, where the Harris government cut provincial income taxes by 30%, the population is not in favour of further tax cuts. Even at the height of the 1999 provincial election in which the Conservatives were re-elected, an Angus Reid poll showed that only 23% of Ontarians wanted the government to go ahead with its promised additional tax cut. Over half (53%) said they wanted the government to forget the tax cut and spend the equivalent amount of money on health care and education, while 22% said it should be applied to the deficit[28].

In general, Canadians in 1997 began to turn decisively against neo-liberal ideology and the policies that flow from it. Having been told for a decade that they couldn’t have social programs because of the deficit, Canadians are demanding a return to social spending as deficits disappear. The Ekos consulting firm does polling for the federal government, and produces a yearly study called “Rethinking Government.” The results in 1997 showed a dramatic turn in favour of activist government.

For example, in the Ekos 1996 poll, 34% supported two-tier medicare. A year later, that figure had plummeted to 23%, statistically a huge drop. According to the authors of the report, “Despite deep scepticism about the effectiveness, efficiency and fairness of government, Canadians are now looking for a return to an active agenda... On virtually every public indicator and test we examine, the neo-conservative wave — always overstated in terms of public support — is in collapse.”[29].

The Ekos poll shows a steadily declining concern about the level of taxes since the agency began its yearly study in 1994 — a result that parallels the decreasing deficit and the concern about the erosion of social programs.

Who pays taxes, and how much we need to collect overall, are questions relating fundamentally to the collective life of Canadians. They are questions about how much of our space we want to be public and how much private. The notion that the “customer wants his/her money back” seeks to portray Canadians not as citizens wanting community solutions to social questions, but simply as customers in the private marketplace, keen to make private consumer choices.

All the polls relating to this broad question show this claim to be false. The Ekos poll (which also shows a major gap in attitudes toward government between the governing élite and the rest of us) demonstrates a strong sense of collective life and an accompanying desire for strong (though fiscally responsible) government. In the words of the Ekos poll authors, “We are finding evidence of rising concern for others and increased receptivity to the role of government as an agent to address the problems in our collective life.”

A large majority (82%) of people polled disagreed with the statement that a stronger economy meant that we didn’t have to worry as much about child poverty; 72% said too many people have been hurt by cuts to social programs and “it’s now time to strengthen our commitment to the social safety net.”

Those forces in Canadian society committed to gutting social programs and ending any progressive role for government see tax cuts as their guarantee that we will not have the money for such activist government. And it is in their interests to portray Canadians as eagerly awaiting the tax-cut windfall. While the poll results are mixed, with many Ontarians supporting the Harris government’s cuts, the clear message that governments get when asked is that Canadians are acutely aware of the connection between paying taxes and having a civilized society in which to live.

In fact, they have demonstrated that they are actually willing to pay higher taxes if that is what it takes to ensure that key social objectives are met. According to a poll by Vector Research, this willingness to pay more in taxes attracted 74% of respondents when dealing with child poverty; 57% regarding publicly-funded child care (so that poor parents could work or get training); 68% for training, and 58% for improving public schools[30].

Canadians clearly are not persuaded that they need only have choices as customers in the marketplace to achieve their aspirations. They see themselves as citizens in a collective undertaking and are willing to pay to make it work.

[27] Edmonton Journal, July 25, 1997.
[28] Globe and Mail, May 17, 1999.
[29] News release, Ekos Research Associates, Feb 26, 1998.
[30] Vector Research and Development, National Poll, December, 1994.

Ten Tax Myths
P R É C. S O M M A I R E