Yesterday, Ontario Premier Dalton McGuinty (Liberal) proclaimed that he would instill the NDP surtax on incomes over $500,000, thereby ensuring that his minority would not fall in the upcoming budget vote. Andrea Horwath (NDP) had touted the tax as a way to raise revenue in order to increase funding to numerous social programs across the province, essentially “robbing” the “rich” to provide aid to the “poor.” This new tax would have seen some minor increase or maintenance of services as the expense of some of the country’s elite, thereby pandering to the many people that took part in Occupy protests across the province. The Liberals had a different destination for this new source of income however: pay down the deficit.
The move is hardly surprising, given the opening message of the Drummond Report which claimed that it would be impossible to balance the budget without all of the cuts, or their equivalents, that he recommended becoming a reality. Given the dire warnings of the report, many expected the budget to have been far harsher than revealed. The cuts were exceedingly short of those required to bring the accounts to balance by 2017, so McGuinty was searching for another way to bring in funds. With his promise not to raise taxes, he had to make it appear as though he’s being forced to do so. The NDP’s demands gave him an opportunity to raise taxes and blame it on someone else.
Unfortunately, the whole purpose of the Robin Hood style of tax was to aid those who needed it. Instead of having a rogue with a heart of gold robbing from the rich to provide for the poor (and free imprisoned royalty), we ended up with more merciless tax collectors who are willing to take their coins from the rich as well as the poor to pad government coffers. Sure, balancing the budget and paying down debt is a good thing. In the long run its a great thing. Robin Hood essentially did the same in saving to free his King. But you have to give some of it back along the way or you just look like the tale’s Sheriff of Nottingham, who takes and takes some more without giving anything in return.
Paying down debt is great, in the long term. Listening to the loud demand to “tax the 1%” of youthful occupiers, is a good step. But it does nothing to solve the problems that caused the Occupiers to rise up in the first place. It does nothing to feed bellies, provide jobs, ensure access to quality health care, ensure access to affordable transportation, or otherwise turn the province back into a “have” instead of a “have-not”. What it does do, is make our tax system even more complicated and confusing than it already was, playing into the hands of tax-preparation & tax-software lobbyists who stand to bring in yet more money as the 1% can find loopholes to make back the cost of the new surtax.
The taxation system should be equal for all, and easy to understand. A better taxation system should have a single tax rate, only charged on amounts earned above cost of living plus charitable contributions. There should be no way to implement additional “deductions” and no way to “reduce your tax burden.” Sure the system isn’t as simple as it sounds since different places within the province have different costs of living, and some people have mutliple residences in different areas, allowing for possible tax shelters by claiming they live in the higher-priced area when they actually spend most of their time elsewhere. There are still some holes to be plugged, but it would be a huge step in the right direction and would reduce personal income taxes to only a few short questions.
With McGuinty’s government corrupting Horwath’s Robin Hood tax to pay down the deficit, well-off Ontario residents are experiencing a shakedown that someday, may, possibly, benefit the province. Unless the Liberals don’t stick with their reduction plan, make fewer or shorter strides toward a balanced budget or a payed-off debt between now and 2017, or any of the people that can afford the best tax advice actually use it to reduce the amount of taxes they pay. We’ve all seen enough of McGuinty to know he isn’t true to his word, and we know people don’t get rich by just going with the tide. This “Corrupted Robin Hood” tax is not going to benefit anyone, in the long or short term, and only serves to allow us to avoid yet another expensive election. We need a whole new way of doing business, and that also means a whole new way of doing taxes, if we’re going to turn Ontario around. There is a lot of work to be done, and this stalling won’t get it done any quicker.
Edit: Despite all the references to this being a sort of “Robin Hood Tax”, the one discussed in the above post has nothing to do with the Robin Hood Tax campaign proposed to affect international banking transactions. The Robin Hood comparison is commonly used whenever taking from the rich to aid the poor.
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