The clear benefits of progressive taxes

Opinion

Hey there, time traveller!
This article was published 08/05/2024 (516 days ago), so information in it may no longer be current.

Getting used to life without my father — labour leader Al Cerilli — Sundays are the worst. I miss reading the Saturday Free Press together and talking politics. I can still hear his voice, and notorious sayings he applied to politics in the form of advice. Sayings I took to heart, like “in politics you have to bring people to you.”

For example, in the 1995 election where the challenger in the Radisson constituency was a well-liked Transcona elementary school principal, who had recently in the federal election come within 219 votes of defeating our MP Bill Blaikie. We needed a strong campaign, so we had at least 200 signs up the first day of the election and a pamphlet, Making a Difference in Radisson, highlighted initiatives on local issues.

The Liberal pamphlet included a Hansard quote from me. I had said, “the public are willing to pay their taxes if they know they were getting quality public services.” The challenger hoped to use this quote against me, with an anti-tax campaign. As Al would advise, I didn’t equivocate or capitulate, I stood up for what I said. We won the election by over 2,500 votes. “Bringing people to you in politics” begins by standing up for your values and principles, combined with persuasive communications and quality research wrapped around good organization.

Although things have changed since 1995 after years of austerity and anti-tax rhetoric it is still true — people, including people in corporations, must be willing to pay their fair share of taxes, knowing that is how they will receive quality public services. Taxes are how we share, how we take care of each other, and how we pay for things we do best collectively, like infrastructure, and health care, education, and social services. Taxes pay for this thing called civilization. Taxes are good.

Back in the ‘90s, I remember the Manitoba Liberal leader saying she supported the NDP on social policy and the Conservatives on economic or fiscal policy. An approach which leads to big budget deficits. Though people might want something for nothing, we need progressive taxation or taxation based on ability to pay, for progressive government, for social programs, to regulate the economy by protecting workers and the environment. All tax cuts lead to austerity which deepens inequity, through lost services. Tax cuts are forever, we don’t get that money back. According to Canadians for Tax Fairness, the federal government has lost over $1.1 trillion in corporate tax cuts in the last 20 years, funds that could do a lot of good.

Another of Al’s favourite sayings was, “you can’t suck and blow at the same time.” Meaning we can’t on the one hand say we are for social justice and social security without the budget and fiscal policy to pay for it. We can’t promote budget tax cuts and then expect to make the case for reducing poverty and social inequity.

To realize the good return on investing, to improve our social determinants of health, we would invest in a social safety net that will subsidize and build social housing, ensure all kids have the care they need for healthy development and school readiness, raise the incomes of the poorest Manitobans through a basic income program, heal trauma, and reduce abuse and violence. Using the levers of government to create social equity, not tax cuts, is the way to address the cost of living, for everyone, especially equity seeking groups.

The 2024 Manitoba budget made progressive tax changes on the earning exemption, and school tax credits going to corporations, but still had million in tax cuts contributing to the deficit. The city of Winnipeg tax increase of 3.5 per cent, with most revenue going to roads, is really a tax cut, given inflation. Especially considering other Canadian cities raised taxes closer to 10 per cent. Although the federal budget raised the capital gains tax, it still cut taxes for 20 million middle class Canadians by $450 on average. What will the average household have to show for about $9 billon in lost revenue? As a country, this amount could address poverty and homelessness, health care erosion and just transition to address climate change.

Cutting taxes to address the rising cost of living does not add up. The small benefits to individuals compared to the compounded loss in public revenue does not pass the cost benefit test. The way to address the tax burden shift from corporations and shareholders to average citizens is to tax wealth like we did in the 60s and 70s. For every dollar that corporations pay in taxes, Canadians pay over $3.50. The tax ratio has shifted steadily since the 1960s from corporations to individuals.

Let’s have a conversation about the political work to build support for fair taxation, redistributing wealth through quality public services, regulation for pay equity and living wages, profit sharing, and a strong social safety net. I can hear another Al saying, “Sh-t or get off the pot.”

Do the job of bringing people to progress, or get out of the way.

Former MLA Marianne Cerilli works in social innovation at the intersection of health education, community development/community economic development and politics.