LESS FOR MORE
In Canada we pay some of the highest taxes on the planet. But it’s not what you think. The personal and corporate tax rates paid to your governments have never been so low. (If you doubt this just go track down the numbers yourself.) If you look you’ll discover that the personal tax high was in the 1960s, when we had seventeen different tax brackets and in the highest bracket folks paid a tax rate of 80%. Today we have only a few brackets and the highest asks for only 29%. (Yes, think about that for a second.) As for corporations, in 1981 they paid 51% tax in Canada. Today the base rate is half this number, including numerous subsidies, offsets, and loopholes allowing for accounting wizardry tantamount to legalized tax evasion – with some of the largest corporations in the world paying no tax whatsoever. (And all of this is, as you know, without getting into actual tax evasion; which is rampant and eagerly expedited by our lawmakers, by licensed law firms, and by almost all our financial institutions...)
So if our taxes are so low now, and so many so easily avoid taxes, what do I mean then when I claim that “we pay some of the highest taxes on the planet”?
Well, many of the expenses once covered or significantly offset by taxes have since changed form and are now external user fees paid to for-profit organizations. There are many examples of this. But to focus and get specific we can just look at education. Education throughout much of the twentieth century was largely subsidized by government through taxes. As we adopted as social policy the twin neoliberal mantras of “government is bad and inefficient” and “private is best”, government funding for education has evaporated. So much so that, even in Vancouver today, people who want their kids to have a descent education seek private and alternative programs that ask for fees of $10,000 or $20,000 annually. Similarly, as the government subsidy of universities and colleges has steadily eroded tuition fees have hiked higher and higher (except in Quebec, where students have a backbone and understand the power they wield.) Depending on the program, tuition alone, not including other mandatory fees, ranges between $4,000 and $10,000 annually at major Canadian universities.
You know all this; but do you know that education, even higher education, is a right in Canada and not a privilege? Canada ratified the United Nations Covenant on Economic, Social, and Cultural Rights in 1976. Article 13c of this covenant states: “Higher education shall be made equally accessible to all ... in particular by the progressive introduction of free education.” When Canada signed on to this agreement forty years ago taxes, mostly corporate, covered 85% of university operating costs, and student tuition made up the other 15%. Today government funding makes up only 50%, while student tuition has almost tripled to around 40%. So despite this international pledge we have moved rapidly and aggressively in the opposite direction of free education accessible for all.
Coinciding with this shift in funding structure, university operating costs have increased as well. This is most troubling because it's not the cost of providing a quality education that has gone up significantly. No. The bulk of the increase in operating cost comes from increased administration and advertising cost. The advertising piece makes sense, because universities are for-profit entities preoccupied with increasing revenue and less and less focused on education. (Not only is this obvious to anyone who has attended a university but I have also had the teaching staff from a prominent department at a prominent school sit down with concerned students and myself and spell this out explicitly.) The admin costs are, if possible, even less understandable and justifiable. For instance, how does one explain that, adjusted for inflation, non-academic (admin) salaries at Canadian universities have risen by around 80% just since 2001. Why, at the University of British Columbia, does the incoming president of the university collect twice the salary of the person he replaced? Why in these “hard economic times”, between 2008 and 2012 alone, has UBC doubled the number of staff earning an annual salary of more than $100,000? (And no, inflation doesn’t account for the change.) Why does the tuition for a one-year Bachelor of Education program today cost $11,300 (plus $1,000 in additional student fees) when in 2011 same program cost half as much? The increase has nothing to do with the value of the degree or the improved quality of the education or resources on offer. (Of this I can assure you, but please do try finding someone who disagrees with me or any evidence of any sort to the contrary.)
While all of this inflation and profiteering is sad and ridiculous, the cost of university actually pales in comparison to daycare costs in major cities across this country. Daycare can easily cost $100 per day, or more, before a child is 18 months of age, $90 per day for those 18-30 months, and around $70 per day for children between 30 months and five years of age. This translates to around $2,000 per month, or $30,000 just for the first year and a half. Four years of daycare, before a kid is eligible for kindergarten, can easily incur fees of around $60,000 – for one child! And, unlike university, parents don’t have decades to save for these costs. So, if we’re going to pay for anything with our tax dollars why is it not daycare? Daycare is a burden that many Western democracies distribute across society through an insignificant increase in taxes. They do so in recognition of the valuable contribution made by two working parents and the basic, even self-interested, need to get the next generation started on the right foot.
Nations like Germany, Belgium, and France (countries with humane, progressive social policies and not the regressive corporate welfare we sponsor here in North America) have personal tax rates almost double what we have in Canada. They understand that you pay for it either way and that free, or significantly subsidized, daycare and education is far cheaper and better for everyone than generation upon generation either uneducated or otherwise drowning in debt. If you look at Europe alone, with higher taxes these populations also have, on the whole, less debt and more disposable income, they work fewer hours and get much more time off (much of it paid), giving them time to live – and all while enjoying a better standard of living than experienced here in North America.
Clearly we’re doing something wrong.
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