EDITORIAL & OPINION — The taxman cometh . . . and cometh — Green with envy

Say what you like about the United States of America, but it’s one country, united and pretty darn indivisible. People in Maine have the same basic rights as those in South Dakota. Sure Alaskans think Californians are a tad loony, and Texans don’t play well with New Yorkers, but at the end of the day, everyone is an American — in the heart, where it counts.

Canada, a confederation of regions, has not achieved that kind of cohesion. As someone once said, if the United States is a melting pot, Canada is a tossed salad. Canada’s political spectrum is like that too.

Instead of two national parties trying to squeeze into the centre lane, as is the case below the 49th Parallel, the True North has one semi-national party hogging the centre lane, pushing the cars on the left and right almost off the road.

The parties on the right have spent the past few years trying to unite, without much success, other than providing a blueprint on how not to do things for the equally fragmented left.

In the United States, you’re either a Republican or a Democrat, no matter where you live. In Canada, people vote regionally. Ontario has by far the most representatives in the ruling Liberal government, and its middle-of-the-road approach to everything sets the political agenda in the nation’s capital.

Most westerners vote Reform, not necessarily because they like the party’s platform but because they want a voice in what goes on in Ottawa. Westerners love Deborah Gray because she does a mighty fine job making sure her voice is heard over Shiela Copps.

Quebecers vote for the Bloc Quebecois, a party dedicated to cutting la belle province’s umbilical cord to the Rest of Canada. And in the last election, Atlantic Canada found a voice by electing most of the few New Democratic Party members seated in the House of Commons.

The regional parties and their leaders wanted more power, and the feds were more than happy to give it them, for a price. We’ll give more power to the provinces, Ottawa said, but we won’t give them as much money. And that’s how Jean Chretien’s government balanced its books.

One might think that if Ottawa were delivering fewer services, it ought to collect fewer taxes. Fine idea in principle, but no such thing happened. Federal taxes did not go down; they went up, in real dollar terms.

The bureaucrats in Ottawa took more and more money through creeping tax-brackets. Before long, an individual making $60,000 was in the top income bracket, roughly equal to someone making more than US$200,000 in the U.S.

Thanks to their Faustian deal with Ottawa, the premiers didn’t kick up much of a fuss either. They got what they wanted: less interference from the feds on matters of regional interest. It was the taxpayers who paid the price when they found their wallets caught between a rock and a hard place.

With Ottawa giving them less money, the premiers had the choice of increasing taxes to pay the bills, reducing services, or running huge deficits. Some chose all of the above. Some shifted services to municipalities, which had to boost their tax rates to pay their bills.

Because the premiers dealt with their financial problems in different ways, huge disparities arose between provinces. Corporations and individuals were attracted to regions with lower taxes, which explains why Alberta is booming and British Columbia has virtually gone bust.

Meanwhile, the United States of America has become the undisputed economic engine of the world. Tax rates don’t vary much from one state to the next, and new businesses are popping up all over.

Northerners looking south of the border are green with envy. And most of them don’t even know that Americans can claim the interest portion of their mortgages as a tax deduction. Factor that into the picture, and the tax gap widens. Green with envy then becomes an understatement.