The Ethicist: Five Reasons to Tax the Rich (#3)

The Spectator’s Ethicist, Rachel Haliburton, provides convincing — and sometimes counter-intuitive — arguments as to why making the rich pay their fair share of taxes benefits us all.(Read Reason #1 and Reason #2)

 

As faithful readers of the Ethicist column in the Cape Breton Spectator will know, for the past several columns, I have been exploring, with the help of my friend political philosopher and ethicist François Coté-Vaillancourt, arguments that support the claim that taxes on the wealthy should be raised.

Last month, we considered the issue of efficiency and concluded that the public provision of many goods and services is far more efficient than any private alternative model could be, and that the rich, just as much as the poor, personally benefit from public investments in infrastructure, healthcare, education, policing, and so-on, all of which are made possible through taxes, and which could be further improved if taxes were higher.

This month, I will consider the argument that places with higher rates of taxation are better places to live, not only for the poor but for the rich as well. The impetus for this month’s column was a comment made by Doug Ford during the recent Ontario election. In one of the debates, Ford claimed that he had spoken to a number of businesspeople who were “terrified” by the possibility that the NDP might win the election, given they had made no secret of the fact that, if elected, they intended to raise income taxes on the wealthy so as to expand social services. The implication of Ford’s comment, of course, was that these “terrified” people would flee Ontario for a lower tax jurisdiction, taking money and businesses with them. I asked François how he would respond to Ford’s claim. He responded:

It’s a very bad state of affairs that high taxes are seen as bad when, in fact, the best places to live in the world have higher taxes. The rich want to live in places that are nice, with big parks, good schools, good universities, good hospitals, a safe environment, not risking being mugged at every street corner, where people have opportunities, where people are happy, and all these things rest on high taxes. So it’s fascinating that people accept claims like the one made by Ford so easily.

High taxes should be seen as a good sign. Where do you have lower taxes? In places where it’s not going well, where you’re not able to attract foreign investors and workers. Not to disparage any country, but in the Eastern Bloc, after the fall of the Iron Curtain, you had countries that needed now to compete with the rest of Europe. So if you’re Bulgaria, Romania, Ukraine, you might need to lower taxes; but for Ontario, for Canada, to think that high taxes are a problem, it’s ludicrous. Life expectancy, all sorts of health indicators, educational indicators, are higher in places with high taxes.

And so, he argues, we now need to rediscover the idea that higher taxes lead to a higher standard of living for everyone.

 

This argument is a powerful one, the truth of which is amply demonstrated by the situation in a number of Third World countries, where the wealthy (who often pay little or no taxes), must live behind walls, sometimes with broken glass cemented along the top, in houses with burglar bars over the windows, protected by privately-hired security guards.

The very rich, in countries with very low rates of taxation – and, correspondingly, few, if any, social services – may be able to live materially comfortable lives, but must contend with constant personal danger. Even activities like going shopping or allowing their children to walk to school can be problematic, because they have to worry about being robbed or their children being kidnapped. Often, they must take body guards along with them when they go out, and must hope that those guards are not themselves corrupt, willing to aid the robbers or the kidnappers.

In such places, the police services are often inadequate or corrupt as well, and so cannot be relied upon to provide protection. In addition, healthcare in low tax jurisdictions is often mediocre, and infectious and contagious diseases are common. Moreover, all the elements of civil society that we take or granted, that we don’t even notice, and which make our lives relatively comfortable and safe – like good roads; building codes enforced by honest building inspectors; police services that are, by and large, not corrupt; clean hospitals; safe food and functioning democratic institutions all tend to be absent as well.

The rich, that is to say, who live in places with minimal or even non-existent rates of taxation may be able to keep more of their money out of government coffers, but they will have to use a significant portion of it to pay for their own protective services, their own healthcare, chauffeurs for their children, etc. In addition, they will be unable to access – in their own countries, at least – any of the other benefits high taxes make possible, such as good elementary and secondary schools, required to meet recognized educational standards; good universities; safe and clean public spaces; the freedom to walk around without being accosted by beggars and assaulted by thieves; and the ability to shop without being accompanied by a bodyguard.

In short, the low-taxed rich pay a high price to keep more money in their own pockets.

 

Wolfville native Rachel Haliburton teaches philosophy at the University of Sudbury. Her latest book, The Ethical Detective: Moral Philosophy and Detective Fiction, was published in February by Lexington Books.

 

 

 

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