Tuesday, 5 April 2016

Governments love change, just not to the point of reform

These observations are not related:

• Politicians and their parties solicit and receive large cash donations from wealthy people and businesses, and pretend there is no ethical problem with doing so, as these gifts obviously come with no strings attached;

• MP Wayne Easter (speaking as a member of the Liberal caucus and not in his role as chairman of the Commons Finance Committee) says the government should fulfill its election promise of reviewing Canada's tax system, with an independent arms-length committee, not as a study by (and for) federal bureaucrats. Finance Minister Bill Morneau, who runs the CRA, wants to keep his options open — and probably keep such a review under close control;

• Parliamentary Budget Officer Jean-Denis Fréchette has been trying for years to get the CRA to release data on the gap between how much taxes our economy should be producing, and the revenue the CRA actually collects. This is known as the “tax gap.” Most of the world's leading democracies publish figures on this so that people will know how much revenue their governments are losing through the use of offshore tax havens and other dodges. A published tax gap would also inform the 95 per cent of Canadians who duly report all their income every year, of what a bunch of chumps they are.

• The CRA, under the direction of finance minister Morneau, promises to study the concept of studying the tax gap;

• The so-called Panama Papers, a massive leak of of secret documents from the offices of Panama-based law firm Mossack Fonseca, lists a trove of information on how the super-rich, the super-famous and some superbly powerful dictators stash huge amounts of money out of reach of their national tax agencies. The papers purport to show that offshore banking costs the Canadian treasury billions of dollars a year — revenue that must be supplied by the rest of us honest taxpayers;

• Trust in our provincial and federal governments to manage our economy and social programs fairly and equitably continues to drop.

Nope, no links in any of the above.

It is difficult to nigh-on impossible for Canadians to figure out if they are getting a fair deal from their government, without a high degree of confidence that government is a good steward of what we send them.

Mostly, we judge governments on how they spend. We talk a lot about budgets and debt levels. We chatter about stimulus spending versus the need for balanced budgets.

Sometimes, we spare a thought or two about the increasing wealth gap, but perhaps because so many of us expect to be rich someday, we don't talk about that too much.

We don't really look at whether our tax system is fair at all, other than to gripe that we as individuals pay too much taxes or that other people pay too little.

Without knowing that everyone pays their fair share, how can we understand what a fair share really is? When politicians and parties appear beholden to their wealthy and influential donors, how can we trust them to make big-picture decisions in our collective best interest?

The government tells us they will review our total tax system and its myriad tweaks and boutique breaks, but they will not inform us of how comprehensive or effective this review will be. It strains confidence that anything will actually change, because one group of political donors or another might become unhappy.

It should floor us that the Canada Revenue Agency — under the direction of both Conservative and Liberal political masters — will not share its data with the Parliamentary Budget Office. Or that the chairman of the Commons Finance Committee cannot speak in his official capacity about a tax system review. Aren't we on the same team here?

As a society, we are already too sceptical about the people who hold power over us. There always seems to be a hidden agenda behind the regime. What deals have been made to get the money to buy the ads that promise us things in election campaigns?

The social flap over the Panama Papers will die down into the background noise of distrust we already have for government. It will become part of the hum and drone of the WikiLeaks event, for instance, that told us how our every move can be monitored by government authorities — who will not tell us what they owe the people who bought them their elections.

This is a world phenomenon, not just a Canadian one. But we should expect Canada to do better than the world at large in producing honest, open and transparent government.

If our tax system needs an overhaul, do it. Tell us what parts of it we can really do without, and then make the changes. And help us be confident that it applies fairly, to everyone.

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