Policy Commentary

Alex Himelfarb: Tax is not a four letter word

From June 16-17 2015, ACFO hosted the international Funding Democracy summit, an international two-day event uniting global leaders from industry, government, education and NGOs to address issues of taxation, corruption and trade, and to establish solutions for these global problems. The following is a recap of a Funding Democracy session.

Alex Himelfarb addresses anti-tax sentiments in Canada and rebuilding solidarity

Alex Himelfarb began his speech on a personal note, saying he felt a sense of “coming home” in a room full of public servants. He reiterated support for the central points of earlier speeches. The top-down approach, Himelfarb argued, does not work.

When addressing the “four-letter word” concept, Himelfarb spoke of the strong emotional associations with taxes. When people think of paying taxes, he explained, they become angry about giving away their money to a government they perceive as corrupt and inefficient. This, he argued, is a serious distortion in the way people speak and think about taxes in Canada.

He proposed three reasons why Canadians have come to hate taxes:

  • We do not always see the payouts of taxes. Taxes buy public goods – streets lights, for example – that are often taken for granted
  • In a society based on positional advantage and competitive consumption, public goods are not prized
  • The benefits of taxes are abstract or long-term (e.g. investment in environment, infrastructure, scientific research) and society prefers short-term, concrete, returns

In response, Himelfarb argued that society has lost the sense of gratitude for the development of public goods. Himelfarb pointed to the hypocrisy inherent in glorifying the neoliberal value of individual freedoms while also demanding a certain quality of public goods and services.

He explained that tax cuts bring about deficits and then austerity, which creates a vicious cycle. When you cut programs, they become less desirable, people become angry, and this feeds into anti-tax sentiments. Austerity also erodes programs like welfare and unemployment insurance that are necessary for combating inequality. Finally, Himelfarb argued, a culture of austerity stunts the political imagination.

Himelfarb concluded with the idea that glorifying extreme individualism ignores the impact of misfortune and of just plain luck. People have different starting points and are born into different positions of power. Real freedom, he said, comes when we learn we are stronger together.

Rebuilding solidarity, Himelfarb argued, is the key to reversing tax discourse.

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