People generally hate to pay taxes. Every dollar taken in taxes is money they cannot spend themselves. Of course, when taxation becomes unfair—when the wealthy manage to escape the net—middle class people have reason to resent what they have to pay. That is also true for the poor when governments resort to consumption taxes, which are never progressive in their impact.

The fact is, we need to pay taxes in order to do together what neither individuals nor corporations can do as well as the community. It is easy to see municipal services in this way. Fire protection, policing, roads, sewers, and water supply are all services (and a good, in the case of clean water) that we obtain most efficiently by paying our taxes to the government we have elected to provide these services. A civilized community is one organized to do these and other things effectively for all its members.

The same thing is true of provincial governments, which play a leading role in providing education and health services. Wealthy people think they can obtain these services through private agencies, but they fail to understand the efficiency of community organization of these services. They also ignore the principle of social insurance, which means the community shares its financial resources in order to provide services to everyone. Canadian Medicare provides many benefits to Canadians, not least of all sparing them the financial disaster and consequent bankruptcy that health issues could produce for those unfortunate enough to suffer them.

Given the benefits that flow to everyone from tax revenues, it is important that all contribute as they are able. For most of a century, Canadian governments have been taxing incomes and the guiding principle has been progressivity. Those with larger incomes pay not just more as an absolute amount but also a larger proportion of their higher income. This principle has led to gradation in which those with small incomes pay no income tax and those with higher incomes pay an increasingly large share of their income as the level increases.

This system needs to be fair to all. The Diefenbaker Progressive Conservative Government appointed a commission in 1962, headed by accountant Kenneth Carter, to examine the Canadian tax system. Carter started with the view that there were inequities in the system but gradually came to the conclusion that the changes needed were very different from what he had originally thought. One of his conclusions in 1966 was that “A buck is a buck is a buck.” He concluded that money made on the stock market, for example, should be taxed in the same way that wages are taxed. His conclusions aroused interest around the globe, but they also stirred up the opposition of everyone who had a stake in avoiding taxation. One measure of the opposition was the refusal of Prime Minister Lester Pearson to authorize wide publication of the Carter Report.

The failure of Prime Minister Pierre Elliott Trudeau’s Liberal government to act wisely on the Carter recommendations has had catastrophic results for the country. Because wealth has been sheltered as the cost of health care rose, the provincial governments (as well as the Federal government) find it more and more difficult to meet the costs of services the country needs. It is no exaggeration to say that failure to tax wealth is ruining the country. The current cutting of expenditures by all of these governments reveals the truth of this assertion.