Tax column boggled the mind

I was unsure, on Friday Aug. 25 when reading the column by Brian Jones titled “Tax the people who have the money” if I had fallen into a chapter of “Animal Farm” or was, indeed, reading The Telegram, in Canada, in 2017.

There is a legitimate debate to be had about taxation, including levels of taxation and the ‘progressiveness’ of a given taxation system. And for the record, I am closer to the $50,000 than $300,000, so one might think I thought his was a great idea. Instead, it is perhaps the stupidest thing I have read in a long time.

The undercurrent of the column was that people should only be allowed to keep enough of their money to maintain the same standard of living as people who make less money. That is remarkable. Communism pure and simple, and a proven failure at that. The old saying applies: we all are equal, in misery! And ‘beware for whom the bell tolls, it tolls for thee’ because in a world conjured by Mr. Jones, that level of adequacy could be pretty low.

The government should, it was argued, take money from people who make a lot because even then they still have more money than people who make less. The example was given of someone making $300,000 per annum vs people making $50,000. At 43 per cent level of taxation, the person making $300,000 still has $173,000 to live off, while the person at $50,000 who pays an effective rate of 26 per cent has only $37,000.

So a fair system, to Mr. Jones, is one which leaves both citizens with the same after-tax income.

And if you disagree, he suggests, you’re not entitled to your own views about deficits. The mind boggles. The people who most suffer from the ‘price’ of deficits are those who down the road deal with inflation, higher interest rates, reduced government services, and higher tax bills. Those costs are born by everyone, but disproportionately by those less well off.

The job of a given government is not to decide how much people need to live, and then regulate their incomes down to that predetermined level. If it was, why would people risk capital, innovate or grow a small business, or create jobs? Government would only take away your earnings. Be prepared for economic collapse. And we have examples of this around the world!

I would agree with Mr. Jones when he says a fairer tax system is a value judgement, at least in part. But that judging had better come to the table with more than a theory or hope. Raw math works too, and some tax systems and approaches have the effect of reducing economic opportunity and job creation. Some increased tax rates mean less revenues to governments, and in some cases lowered taxes result in higher revenues.

But I disagree with Mr. Jones most emphatically when he writes “It does not require a committee” if by that he means it gets decided from some potentate on high, who reveals such shoddy thinking as his.

Economic literacy is a challenge in the best of times. The Telegram has an obligation to provide a little more reason to the discussion.

Derek Butler St. John’s