Taxation should maximize human well-being
‘Taxes are the price we pay for a civilized society,” said U.S. Supreme Court Justice Oliver Wendell Holmes 100 years ago. But from a health and human-development perspective, the question is, what sorts of taxes are best for improving health and which worsen health?
What would be a sensible tax regime if our purpose were to maximize human well-being? A good place to start is with some basic needs. Taxation that ensured a supply of clean water, sanitary treatment of human wastes and universal education for children was instrumental in dramatically improving the health of the population in the industrialized world in the 19th century.
Beyond these basic needs, taxation that keeps our food and homes safe through food inspection and building codes is key, as are taxes that safeguard our air quality and create safe streets and highways. Policing, firefighting and other emergency services would be high on anyone’s list of useful taxes, as are parks, recreation, libraries and other cultural activities. And, of course, we are generally very supportive of our taxpayer-funded health-care system, which ensures people have access to needed care.
It is interesting to note that many of these services, with the exception of health care, are delivered locally by municipal governments. Yet municipalities lack the taxing power they need and are largely dependent upon property taxes, which are unjust.
Small wonder the president of the Federation of Canadian Municipalities wrote in 2012 that: “Our current system, in which municipalities collect just eight cents of every tax dollar, is not sustainable.” That it places “a growing burden on property taxpayers, straining local services and forcing municipalities to delay essential infrastructure projects.”
The federal government is not responsible for municipalities, but the next federal government needs to show some leadership, in conjunction with the provinces, to ensure that municipalities have the resources they need to provide the many services that are so essential to our health and well-being.
A basic principle of taxation should be that you tax the things you don’t want — such as tobacco — and don’t tax what you do want, such as healthy food. In the midst of an epidemic of obesity, then, it would be a good idea to tax sugar, which would have a significant impact on our consumption of soft drinks, pop, sugary cereals and other junk food.
Similarly, given that Canada has unusually high levels of salt in its processed foods, and given the failure of the federal government’s kidgloves treatment of the food industry in requiring only a voluntary approach to reduce levels, a tax on added salt would be a good idea.
The reverse of taxation, of course, is subsidization. Here, the principle is that you don’t subsidize the things you don’t want, and instead support what you do want. One of the more obvious cases where subsidization needs to be reversed is in energy policy.
At a time when we need to reduce fossil-fuel use — and in the case of Canada, keep 80 per cent of our fossil fuels in the ground — we should not be providing any subsidies or tax breaks to the fossil-fuel industry. Instead, we should be redirecting those tax breaks and subsidies to what we do need — energy conservation and clean, renewable energy.
Finally, and perhaps most profoundly, we need to use our taxation system to create a greater degree of social equity, which will have a wide variety of social benefits, including a reduced burden of disease. In particular, the health impacts of child poverty must be eliminated by eliminating child poverty, a target unanimously adopted by the House of Commons in 2000 and disregarded by the federal government since then.
Of course, since children live in families, this really means eliminating family poverty. There are many ways to do this, but provincial anti-poverty strategies (only B.C. lacks one) tend to focus on increasing minimum wages, reducing housing costs, increasing social-assistance rates and ensuring the affordability of basic needs such as food.
The guiding principles for healthfocused taxation, then, would involve taxing all that is unhealthy in society, giving tax breaks to what is healthy and using taxes to meet the objective of “from each according to their ability, to each according to their need.”