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"The revenue from our taxes goes to paying for the quality public services and programs that, as individuals, most people could never afford on their own. Our public services are a epitome of our commitment to care for each other." — Larry Brown, NUPGE President
Ottawa (12 April 2019) — The latest report from the Organization for Economic Co-operation and Development (OECD) shows that Canadians face a lighter tax burden than other countries.
Taxes aren't the enemy
"The problem isn't that taxes are too high," says Larry Brown, President of the National Union of Public and General Employees (NUPGE). "It's that workers' wages haven't kept up and people are falling behind."
The report points out, "middle incomes are barely higher today than they were 10 years ago" while "across OECD countries, which include most of the big economies in Western Europe and North America, the 10% of highest earners have increased their income by a third more than middle earners."
"So, the people who are increasing their income and have the means to pay — corporations and the wealthy — aren't even paying their fair share," said Brown.
Public services have economic and social value
"Taxes have been demonized but it's the price we pay for living in a civilized society," said Brown. "In fact, our taxes are a deal. The revenue from our taxes goes to paying for the quality public services and programs that, as individuals, most people could never afford on their own. Our public services are a epitome of our commitment to care for each other," said Brown.
OECD suggests ways to help the shrinking middle class
Another important take away from the report is the fact that as the middle class shrinks due to the lack of good jobs, job security and decent wages, so too does the proportion of young people who populate that section of the economy. The OECD has said that "while almost 70 per cent of baby boomers were part of middle income households in their 20s, only 60 per cent of millennials are."
The OECD is urging governments to increase capital gains taxes, property taxes and inheritance taxes and put more resources into fighting tax evasion and avoidance.
In Canada the average homeowner is having to spend 45.9% of their income on housing. This is far above the Canada Mortgage and Housing Corporation’s benchmark, which considers housing “affordable” when no more than 30% of pre-tax income is spent on homeownership expenses. In light of that, the OECD is also recommending that governments invest in measures to make housing more affordable.
They also recommend providing generous support to child care, higher education, and retraining program.
All of these things would be very affordable for government if taxes were simply raised to closer to the average for rich nations, based on a progressive tax system that taxes those with wealth on a higher basis because they can so obviously afford it.