ECONOMIC FACTS

By Emil Bjarnason and David Fairey

At a time when many citizens
are reeling from the impact of yet
another round of income and pro-
perty tax payments we are remind-
ed again of the increasing ine-
quities of the tax system. It would
be the understatement of the
decade to assert that the Canadian
tax system is long overdue for a

“major overhaul.

While there is no immediate
relief in sight we should guard
against a further deterioration of
the system by insuring that any
new taxes or tax increases levied
are of the.kind that bear some
relationship to people’s ability to
pay.

It is nearly 13 years since the
Royal Commission on Taxation
under the chairmanship of Ken-
neth L. M. Carter issued its
monumental report to the Conser-
vative government of John

. Diefenbaker. :

The Commission was severely
critical of the Canadian tax system
and found it to be unfair and ine-
quitable to the majority of people.
Radical measures for complete
reform were recommended.
However, despite the high quality
and commendability of the studies
and recommendations of this in-
quiry little if anything has been
done since to improve upon the
tax system. In fact, it has gotten
worse.

Taxation is a method of
transferring command over goods
and services from individuals and
families to the state. The Carter
Commission considered that equi-
ty in taxation is the objective to be
given the greatest weight in any
tax system. It stated that
‘scrupulous fairness in taxation
must overide all other objectives
where there is a conflict among
\_ objectives.” By ‘“‘equity” it is

Taxation: for wage-earners,
it's a study in inequities

meant that individuals and
families in similar circumstances
bear the same taxes and those in
different circumstances bear ap-
propriately different taxes (termed
horizontal and vertical equity
respectively). It stated that if equi-
ty were not the vital concern taxes
- would be unnecessary. The state
could simply commandeer what it
needed on an arbitrary basis.

A progressive tax system is one
in which taxes are allocated in an
increasing proportion to the abili-
ty to pay. Therefore taxpayers on
high incomes are taxed at higher
proportional rates than taxpayers
on low incomes. Obviously per-
sons earning in excess of $100,000
per year are able to pay a higher
rate of tax on every dollar earned
that taxpayers earning less than

$10,000 or $20,000 per year
because the necessities of life con-
sume a lesser proportion of total
income for those on high income
compared to those on low income.
Conversely, a regressive tax
system is one which taxes those on
low income proportionally more
than those on high income.
Looking at the tax system as a

- whole in Canada we find that an

Name of Tax
Personal Income
Corporate Income

Other Corporate Direct
Direct SalesTax
Indirect (Fed. & Prov.) esas
Property Taxes (Local)
Investment Income
Succession & Estate Duties
Canada & Quebec

Pension Plan
Other Transfers from Persons

Totals
Proportional Distribution

Source: Statistics Canada.

- Revenue and Type of Tax by Ultimate Source
($ million)
Progressive Regressive
Taxes © Taxes
on Total
On Persons On Corporations Persons Revenue
$24,270.00
$ 4,121.50 $ 4,121.50
139.00
6,027.00
20,149.00
$ 8,510.00
11,689.00 .
129.00
2,726.00
1,936.00
$36,088.00 $ 4,121. $43,609.50 - $83,819.00
43% 5% 52% 100%

Canada’s Population June, 1978: 23,481,100

Per Capita Progressive Personal Taxes: $1,537.00

Per Capita Regressive Taxes Paid by People: $1,857. sé
Total Per Capita Personal Taxes: $3,394.00

increasing proportion of govern
ment revenue is derived from.
taxes that bear no relationship to
people’s ability to pay. The ma-
jority of government revenues are
now derived from taxes that are in”
the main very regressive. Pro
gressive income taxes now play
minor role. -

As the accompanying table”
shows, 52 percent of total govern
ment revenue at all levels in 197
was derived from those taxes th
are not based on income or ability
to pay and are not applied at pro"
gressive rates. Assumed here
that one-half of corporate incom!
taxes are passed on to consume
in the form of higher prices (

ad

therefore bear no relationship t0 j

the income of the purchaser) an@
one-half is paid or absorbed D}
shareholders through reduced
share earnings. Also assumed iS
that indirect taxes, such as thé
manufacturers sales tax, are pass-
ed on to persons in the form 0
higher consumer prices.

Of the total per capita
revenue received by government
from persons 55 percent or $1,857 |
per person was paid in taxes that
bore no relation to the ability
people to pay them.

Any changes in the tax systeim:
be they at the federal, provinct
or municipal level, therefore
quire that more equitable and pr
gressive taxes be applied. For
ample, an increase in prop

would only increase the inequiti
of the overall tax system and i
crease the the unfair burden cu!
rently being borne by individuals

and families on low and middle in- |

comes. Now more than ever tie
objectives of the Carter Commis-
sion need to be restated an¢é
fought for.

Carpenters question gov't ‘humanitarianism

The president of the Provincial
Council of Carpenters said last
week that the federal government’s
policy on the Vietnamese boat peo-
ple ‘thas been thrown into grave
doubt’’ by its action in ‘‘reneging
on commitments of food and
medical aid to Vietnam.

“The Carpenters Union is also
concerned with the refugees in
Southeast Asia,’’ Carpenters’ presi-
dent Bill Zander said, in a statement
issued last week by the union’s ex-
ecutive. ‘‘But we are equally con-
cerned that the Canadian govern-
ment has not put humanitarianism
first in its policy towards refugees.

“We are not prepared to accept
uncritically the position of the
government which, on the one
hand, speaks of the need to assist
thousands of Vietnamese refugees
while, on the other hand, still
refuses to rescind the deportation
order against Galindo
Madrid . . .”’, he declared.

The union’s statement was in
response to the campaign launched
by Canadian Labor Congress presi-
dent Dennis McDermott urging
trade unionists to act with ‘‘im-

MADRID

Continued from page 1
mean imprisonment or torture.

Robinson pointed out that the
Immigration Act states that Canada
‘‘must be humanitarian with respect
to the displaced and persecuted.”’

He again blasted the government
for its ‘‘shameful hypocrisy’’, con-
strasting the government’s treat-
ment of Madrid with the welcome
given Indochinese refugees.

He also warned that Madrid’s
case was not an isolated one and
that other Chilean refugees faced
the same threat from the immigra-
tion department.

pulsive humanitarian instincts” and
assist the refugees, both through
cooperation with other agencies and
through direct sponsorship.

But Canada’s humanitarianism is
open to question, Zander noted,
because the federal government
chose to cut off all humanitarian
aid to Vietnam, an action which the
union said will ‘‘greatly increase the
suffering in that country.

‘“‘And what about the refugees
coming here — and their need for
jobs, training education and hous-
ing,’ he asked, adding that the
humanitarian record of both
federal and provincial governments
on unemployment insurance, job-
creating programs and social ser-
vices was, ‘‘dismal.

“Is the government going to pro-
vide jobs, housing and education to
thousands of refugees when it
claims it can’t do anything for the
one million unemployed or the
many more thousands who do not
have decent housing?’’

The Carpenters’ statement also
echoed the concern voiced by many
trade unionists — that employers
are already looking to the refugees
as yet another immigrant group
whose labor they can exploit.

‘Right at this very moment, im-
migrant farm workers in the Fraser
Valley are being denied even the
most labor rights and have appealed
to labor minister Allan Williams for
help,’’ Zander said, referring to re-
cent news stories about the use of
“Jabor contractors’’ in the Fraser
Valley and the actions of employers
in reneging on wage payments.

‘*Will the refugees coming here
also be exploited by these labor con-
tractors?’’, he asked. ‘‘Will they
also be denied basic rights, so that
employers can get cheap labor,
undermining conditions long ago
fought for and won by the trade

PACIFIC TRIBUNE— AUGUST 3, 1979— Page 8

union movement?”’

Zander also asked whether Cana-
dians were ‘‘being involved in some
political campaign in which the
boat people are unfortunately being
used.’”

Citing external affairs minister
Flora MacDonald particularly for
“hypocrisy,’’ he added: ‘‘We must
question the emotionally stated
humanitarian feelings by politicians
of all stripes when they were silent
and went along with Canada’s com-
plicity in Vietnam when hundreds
of thousands of innocents were be-
ing mercilessly bombed and burned
by U.S. military hardware some of
which was produced here in
Canada.”’

The Carpenters president stressed
that the union ‘‘has a long record
in support of humanitarian efforts
to aid refugees.”

“But if the Canadian government
and others want genuinely to pro-
vide humanitarian assistance to
refugees,’’ he declared, ‘‘then they
should carry out the following pro-
gram.’

He called on the government to
‘Gmplement immediately’’ the
seven-point agreement between the
UN High Commission of Refugees
and the government of Vietnam and
to establish an embassy in Hanoi to
facilitate the implementation of
that agreement; to expand the pro-
gram to provide food and medical
aid to Vietnam; and to ‘“‘revamp
government aid and ensure resettle-
ment opportunities are provided to
all bona fide refugees.”’

Earlier Zander had raised the
union’s concerns at the New
Westminster and District Labor
Council where he chastised the B.C.
Federation of Labor and the CLC
for ‘‘climbing on the bandwagon.”’

Not only did the federal govern-

ment do nothing to implement the

UN seven-point agreement — which
would have averted the refugee
crisis — but it has taken no action
to assist refugees from Chile,
Argentina, Nicaragua or South
Africa, he said.

His comments were part of a_

stormy council debate over a mo-
tion to provide assistance through
the B.C. Federation of Labor and
other groups to the refugees. Coun-
cil president Gerry Stoney had call-
ed on delegates to provide the
assistance to the refugees and not to
ask ‘‘what political stripe they are
or how many gold bars they have.”’

The motion, which passed after
the lengthy debate, followed a
similar motion a week earlier at
the Vancouver and District Labor
Council — which also sparked a.
contentious debate before it was
passed.

There, Marineworkers’ delegate
Bernie Keely voiced concern that
the media campaign around the
boat people was ‘‘whipping up
hysteria against Vietnam’’ and ac-
cusing that country of expelling
refugees.

There were no such expulsions he

pointed out, citing the earlier |
tempts by the government of
nam to resolve the refugee issue #
the May 30 agreement with the ©
High Commission.

Council president Syd Thom
claimed that talk of the UN
ment was ‘‘sidetracking the 1
and called on delegates to stay 4
from the politics of the issue
confine themselves to assisting
refugees.

Fishermen’s Union del
George Hewison countered —
trade unionists couldn’t divé
themselves from the politics, P*
ting out that the campaign af
the refugees involved ‘“‘some |
rotten politics.

The fact is that we’re being ‘
that our opposition to the vi
U.S. war in Vietnam was wro
he said. ‘‘That’s how some pe
want to exploit this issue.”

He said the labor movel™
should préss. the government
“*get on with cooperation with
nam in resolving the refugee
blem’? which, he added,
created ‘‘by 30 years of inv
bombings and napalm.”’

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