About Canadian Parties Election Platforms

Trudeau, the leader of Liberals, appeared in the party ad, telling the public that he had found the way to solve Canadian social and economic problems. In his vision it is rather simple: to increase taxes on the rich and on corporations, and distribute the proceeds among the needy. This is, in a nut shell, the position of the NDP as well.

The idea is not new, but in spite of its attractive simplicity, it has never brought positive results. Perhaps this time it would work, you may ask? Perhaps now the Liberals know how it supposed to be done?

To judge the validity of taxing the rich, much more information is needed. Who should be considered wealthy? How many of them out there? How much money Trudeau expects no collect from them? Would it be enough to achieve the goal of social and economic harmony? And, of utmost importance: how increased taxation would affect economy?

The message has an assumption, which is not expressed but supposed to be self-explanatory: the additional money collected from the wealthy and from corporations is enough for all. Well, not exactly: the surplus, created by Conservatives will be used to  balance the budget, and some deficit as well. Generosity needs sacrifices.

The parties mostly rely on emotional appeal of their slogans to the poor and, to some extent, to the middle class. No doubt that in the minds of some it is justice in its purest form. After all, if all people are equal, why should there be the rich and the poor? Why not to distribute wealth in a more fair way?

In purest form this idea was implemented by Robin Hood. He had his own method of taxation: robbing the rich and giving the proceeds to the poor. That is why this robber, criminal as he was, won so much sympathy from the readers.

The history though gives ample examples that the idea of mindless taxation and distribution has never worked. Suffice to look back when Bob Rae, the NDP leader in Ontario, ascended to power. He promised a lot, and the naive, trusting voters gave him the cart – blanch to do so. He did more or less what he had promised: NDP borrowed enormous amount of money, and wasted it all in a couple of years. It took many years later to repair the damage inflicted on the economy of the province by the NDP spirit and practice of giving.

In the not-so-distant past, communists tried their idea of social justice in its most radical form in Russia. Being rich was considered there worse than immoral: it was deemed as a criminal act, for which no less than death penalty was applied.

Economy is a sophisticated mechanism. It does not conform to wishful thinking or good intentions, or the notion of fairness in religions and ideologies. The first and foremost condition of economy progress is investment in productive assets, which in turn creates jobs. The major source of investment is earnings of corporations and public savings. The heavier the tax burden, the less is investment in the business assets, the less jobs are created. This is a more difficult notion to understand than the idea of taking from one and giving to the other.

As history is any guidance, taxation of the wealthy is never ever enough: it quickly spreads to the middle class, and eventually demonstrates it’s failure. As a result, frustration spreads out left and right, sobering the public mind.

There is another, fundamental issue of taxation, which is widely neglected and misunderstood. Earned money, be it by an individual or a corporation, is a private property. If a thief steals or robs private property, he will be put in prison, if caught. But the public is so accustomed to taxation, that it does not see anything wrong when the government, due to mismanagement or ideological bents, takes as much money as it wants and from whom it wants via increased taxation. We often forget that in the past changes in taxation was an extreme measure in case of war, natural disaster, or other unpredictable circumstance, for which available budget was not enough. Now taxation became an instrument of getting money by the government, whose people have no personal responsibility for spending, and no accountability for their promises. This is the time to ask Canadian parties: how exactly your platform will work, to fulfill your promises? And, most important: what is your personal responsibility for mismanagement of public money, or failure of your policy?



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