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Mark Milke: Taxes and civilization: Don’t overdo it

For those who file their taxes at the last moment and cut an extra cheque to government, right about now is unlikely to be their favourite time of year.

For those who file their taxes at the last moment and cut an extra cheque to government, right about now is unlikely to be their favourite time of year. It might be of some comfort to know taxes have provoked much the same reaction throughout history.

History’s first recorded tax was levied 6,000 years ago at Sumer, in what is now Iraq.

It is there, inscribed on clay stones excavated at Lagash, that we learn of the first taxes, instituted to fight a ferocious war.

But as is often the case in history, when the battles ceased, the taxes stayed — a cause of no small discontent on the part of the locals. Local Sumerians, apparently, complained that taxes filled up the land from one end to the other.

Charles Adams detailed such history in his 1982 book, For Good and Evil: The Impact of Taxes on the Course of Civilization. As his title implies, taxes have been both useful and a scourge.

In Canada, taxes pay for items any sensible person would regard as desirable. One could point to the most basic functions you’d hope taxes would undergird.

A few examples: governments that (in theory) protect your property and person from interference; courts to enforce such desirable laws; cops and others to protect kids.

On the flip side, it wouldn’t take long for anyone to identify useless government spending. Think corporate welfare or taxpayer-financing for professional sports and their stadiums, or above-market compensation in the public sector.

Think of absurdly high salaries for some native chiefs, or the Harper government’s endless stream of taxpayer-financed commercials that tout Ottawa’s “economic action plan,” at a cost of $78 million in 2012 alone.

In Canada, the first known instance of taxation was an export duty on beaver pelts (at 50 per cent) and moose pelts (at 10 per cent) in what was then New France, in 1650.

While the tax on beaver furs was soon reduced to 25 per cent three years later, by 1662, every import was subject to a 10 per cent tax for six years, necessary to help pay off colonial debt.

That was then. Ever since, the number of taxes has, of course, multiplied, not just since the 17th century, but even over the last five decades.

Two colleagues recently found that since 1961, tax increases have outpaced the growth in the cost of clothing (up by 607 per cent) food (higher by 578 per cent) and shelter costs (up by 1,290 per cent).

In fact, Statistics Canada’s Consumer Price Index, which measures the prices Canadians pay for a wide variety of goods and services, rose by 675 per cent from 1961 until 2012. But taxes? They’re up by 1,787 per cent. So in other words, tax hikes since 1961 have outpaced inflation and the necessities of life, thus squeezing family budgets.

The response to such tax facts is usually the quote from American jurist Oliver Wendell Holmes Jr.: “Taxes are what we pay for a civilized society.”

One cannot endlessly extrapolate that “taxes are good for you,” any more than it is useful to overdose on pharmaceutical drugs just because one pill helps kill some pain.

Perhaps a better perspective on taxes comes from Richard Cartwright, then Canada’s minister of finance, in his 1878 budget speech: “All taxation is a loss per se,” he said. “It is the sacred duty of the government to take only from the people what is necessary to the proper discharge of the public service; and that taxation in any other mode, is simply in one shape or another, legalized robbery.”

Cartwright had the spirit of it right. Moderation in government and taxes, as in all areas of life, is a virtue.


Mark Milke is a senior fellow with the Fraser Institute.