Here’s a novel idea. A new organization of well-paid doctors thinks that they — and other high-income earners — should pay more in taxes.“Who knows?” physician Michael Rachlis, one of the founders of Doctors for Fair Taxation, told me Wednesday. “Maybe we’ll start a trend. Maybe we’ll see a Lawyers for Fair Taxation start up.”
I’m not going to hold my breath. Still, it’s refreshing to see someone stand up for a more progressive tax system.
The conventional wisdom these days is that progressivity in taxation — the notion that people should pay proportionally more as their incomes rise — is counterproductive.
Most governments don’t have the nerve to scrap progressive taxation entirely. So they’ve been doing it gradually by reducing the number of income-tax brackets and by raising more money through user fees and consumption levies like the HST.
They’ve have been aided and abetted in this by mainstream economists who argue, usually without any proof, that taxes on income discourage people from working.
The upshot of this, as a recent study from the Canadian Centre for Policy Alternatives demonstrates, is that the poor in Canada now pay a greater share of their income to government in the form of taxes than do the ultra rich.
Which is the antithesis of the bargain made when governments first began to levy income taxes almost 100 years ago.
Doctors for Fair Taxation argues that a more progressive tax system would be good for human health.
First there’s the obvious point. Governments almost invariably deal with their fiscal problems by cutting back spending on health care. Both Prime Minister Stephen Harper’s federal Conservatives and Ontario Premier Dalton McGuinty’s Liberals are heading down this path.
The second point, well-known since the 1970s, is that poverty breeds poor health. The uber-rich may not like sharing their money with the very poor. But doing so increases the overall health of Canadian society and, in the end, is both cheaper and more efficient than allowing an underclass to fester.
The third point, demonstrated by history, is that society as a whole does better when there are fewer income extremes. Such stolidly middle-class societies tend to be more stable, less violent and more productive.
The suggestions by Doctors for Fair Taxation are modest. The group recommends that the federal and provincial governments create four new tax brackets for those earning more than $100,000. Someone with a taxable income of $170,000 would pay an extra $1,400. But someone earning $7 million would pay an extra $787,400.
Rachlis figures the scheme would net Ottawa an extra $3.5 billion a year and Ontario an additional $1.7 billion.
That’s not enough to wipe out the deficit for either level of government. But it would go partway along the path.
More to the point, it would preclude the need for drastic spending cuts.
Up to now, the anti-tax movement has held centre stage. Even leftish politicians are reluctant to talk of taxing the wealthy. In Ontario, New Democratic Party Leader Andrea Horwath focuses instead on taxing anonymous corporations, in the hope that this won’t spook voters.
Yet, there’s nothing wrong with having the well-to-do pay more. It’s fair. It works. We’ve done it successfully.
So kudos to this new pro-tax bunch. Usually, when people talk of taxing the rich, they exclude themselves. This group may be quixotic. But at least it doesn’t employ that dodge.
The average gross income for Ontario physicians is about $325,000. Doctors for Fair Taxation reckon people making that kind of money can pay a little more. They’re right.
Original Article
Source: Star
Author: Thomas Walkom
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