Election Issue 3: Taxes and Spending

Posted on April 12, 2011


Lots of people claim to be anti-tax and anti-government spending, but very few actually mean it. This is evidenced by public opinion in our largest city, which elected a moron to run it a few months ago. A few days ago, the more sensible Torontonians spoke up about Ford’s reign of civil service cuts by marching on city hall. The march itself isn’t quite as remarkable as I imagine similar marches will become once Ford and Hudak (Ontario’s next premier) start trying to dismantle the social safety net. What interests me about the link above is some of the comments.

“Yup, tells you that the people who feel they are entitled to their entitlements are getting very scared. And so they should be.”

“The fantasy world of overspending is coming to an end. Of course many will not like that but it’s reality. Get used to it.”

“Looks like a lot of people who spent their monthly allowance early. The gravey train is over. Get over it. Get a job.”

“Finally someone restores fiscal sanity and the Lib hoards are out in force crying about their entitlements.

“How dare they try to tell the TTC union what to do! How dare they threaten their right to sleep on the job and earn salaries that most neurosurgeons would die for.”

The message is clear: Ford Nation wants to reduce government spending and thereby reduce taxation. I have already shown, however, that the single largest cost on the Toronto municipal government is automobile infrastructure. Yet Ford Nation seems surprisingly quiet about that. That is because Ford nation is overwhelmingly concentrated in the suburbs of Toronto, and they are therefore mostly commuters. They are happy to see billions of dollars of public money going towards things for them. The only problem they have with spending is when it goes towards things they don’t use, like arts funding, bike lanes and union salaries.

This underscores the vast majority of anti-tax rhetoric. While a few devoted libertarians are truly committed to smaller government, the vast majority of those who claim that position are actually only committed to reducing those parts of the government that help other people. There is good reason to not oppose government spending that helps oneself: It tends to be very helpful! Large, coordinated buyers that they are, governments at all levels are well-positioned to spend money very efficiently without having to worry about wasting money on advertising and other forms of unproductive competition to which the private sector is beholden. Government spending makes a whole lot of sense for things like healthcare, education, defense, and transit.

One more reason that government spending is a good thing is that it is virtually the only thing that combats the increasing income disparity that is a natural outgrowth of our capitalist economy. So long as we are going to encourage productivity and innovation through risk-taking, we will have an ethical responsibility to take care of those whose risks don’t pan out. Otherwise, we wind up with a highly stratified society in which the only way to succeed is to be bankrolled by somebody who has already succeeded, and who will be made even more successful by bankrolling you. This is a problem because the economy is a zero-sum game. Money is only as good as the labour and natural resources that it can buy, and there’s only so much of that to go around. Small government is therefore a surefire path to oligarchy.

Taxes are a transaction like any other. In exchange for some of our income, the government provides us with security, social mobility, infrastructure, and cultural identity. Anti-tax rhetoric without anti-spending rhetoric is like signing up for an insurance policy or cell phone plan and insisting that the rate be reduced without any corresponding reduction in coverage. Adding anti-spending rhetoric into the mix rarely improves matters-people tend to selfishly demand that other peoples’ benefits be cut, rather than their own. The mature thing is to recognize that taxes are the price tag of civilization, and accept that you don’t get to live in a country with a high standard of living without paying a little bit for it. Debates about particular forms of government spending are all well and good, but it is silly to think that taxes as a general concept are some kind of injustice.