Governments Need to Budget Better, Not Raise Taxes

While opinions are split on whether increases to income tax or sales tax would be better, KBR readers largely agree that governments need to be more accountable for their spending and budgeting practices.

Our May poll question asked “In your view, is it better for cash-strapped federal and provincial governments to raise income taxes rather than increase sales taxes? “ Of 161 voters, 71% KBR readers said “no”; however, based on the comments of those who weighed in, the overwhelming “no” vote could be interpreted as a “neither” vote.

Deanna comments, “Neither Yes or No is correct…Government should be ACCOUNTABLE for every dollar that they spend…they have a budget, why is it not followed? Who makes them accountable for not following it? What are their consequences for yearly failing this task?”

Or how about an increase in both taxes? Dale suggests, “Well, really a little of each would be best. Often sale taxes are regressive which hurts low income individuals. Relief on the income tax side can counter that but if the Income tax relief is not available then just an increase in income tax is more progressive. I take this position as a very high income earner knowing that it will affect me.”

Some felt that the governments should run like businesses are expected to. Bob opines, “Our government should be more aware of its spending habits and made to run its operations like small business has to. If we don’t run our business affairs properly we go bankrupt. The government just raises taxes to cover their problems.”

Denise adds, “The government needs to start running the business as a business–not a bank account with unlimited funds available. Poor people equal a poor government…and when the people are taxed on everything and their dog…well…more people need assistance…it’s a vicious circle.”

Only 29% of voters felt it would be reasonable to increase income taxes. Denzil weighs in, “PST changes are hard on retailers and consumers–they should not happen…Income taxes or other targeted fiscal measures can be more specific and remedial, plus removable.”

John states, “If it comes down to a choice between higher sales tax and higher personal income tax, it must be higher income tax, because sales taxes are an unfair tax to the poor.  Here in Ontario, the 13% HST is an utter shock when reaching the checkout/cashier, and particularly for the low income families.“

On the flip side, several people were more inclined to accept an increase in sales tax. D says, “Consumption taxes with exemptions for life essentials are a much fairer way of taxing. The Conservative government were totally wrong and regressive in cutting the GST on gaining power.”

Gil writes, “I feel like a traitor saying this because for decades I have supplemented my income by preparing personal income tax returns. I do not like income tax. The current system is convoluted, complex and counterproductive… I believe a sales tax is a much fairer system…The people who are deriving the benefits (goods and services) from our economy will have to pay for what they consume.  If someone is having a difficult period, then they have the option of cutting back on consumption, and hence pay less tax.”

Maria succinctly summarizes what was likely on the mind of most KBR readers, “Please…not another increase of income taxes...and please...not another increase of consumption taxes.  If there are to be any changes, the governments should give us a break and reduce taxes.  But I’m dreaming in color, right?”

Knowledge Bureau thanks the 161 people who participated in May’s poll. This month’s poll question: If you knew you were going to live to be 100, would you change the way you organize your tax and financial affairs? Weigh in here.