Wanted—A Canadian Coolidge!
Sturdy common sense and New England instinct for frugality needed in next Dominion government. Reduction of taxes must have “right of way” here, as in United States. This is the only hope of national deliverance.
CANADA is about to select her rulers. The constitutional opportunity which comes to the people but once every four or five years, to express their views and impose their will upon parliament, is set for October 29. On that day the Canadian democracy will enthrone its kings.
The campaign is in full swing. The leaders are sounding the keynotes of discussion. Nominating conventions are choosing standard bearers. The press echoes with the fray. All the vocal and physical signs attendant upon the serious business of a general election are in evidence.
Yet to great numbers anxiously concerned with our national future there is an air of unreality about it all. On the main subjects requiring national attention and action there is virtual agreement among the leaders. That is about all upon which they do agree. Transportation, immigration, fiscal matters, the reform of the Senate—these the premier specifies as of outstanding importance. Most people will agree with him in regard at least to the three first named.
But they have been urgent problems for four years or more. What people would like to know is why these continue perpetual and alluring subjects of speculation and promise, and never pass into the realm of solved problems and fixed policies.
Mr. King says it is because he could not command a sufficient majority; the leader of the Opposition retorts that it was because the premier could never make up his mind. Liberals declare that Mr. Meighen inherited an incompetent cabinet; the Conservatives maintain that Mr. King selected one. These things bring not consolation, but anxiety, to the ordinary voter.
Our Alarming Taxes
üOR the supreme concern of the people to-day is not " the fortunes of any person or party, but a much more prosaic thing. They are alarmed over TAXES. In proportion to income, Canadians are the fourth highest taxpayers in the world—higher than even France, twice as high as the United States. On an income of $3,000 a Canadian pays $40 while a resident of the United States pays only $7.50. On $10,000 the proportions are as $619.50 to $207.50. Yet the premier says he has “no solution for the problem of taxation, no means of materially reducing our public debt, our income tax, our sales tax, and other taxes,” apart from the four problems above mentioned.
The railway incubus is specified as the fruitful source of our principal losses.
Mr. Meighen promises that in one month after his election he will make drastic economies, and will ruthlessly cut out wasteful expenditures on golf courses, continental hotels, and radios.
Mr. King speaks hopefully of reducing expenses by service as well as rate control; of “enlightened cooperation and administration under some form of regulated or restricted competition entered into voluntarily by the railways, or under the direction of the state or some body duly authorized by parliament.” He hastens to explain that this will not decrease the number of employees, though it will, in some undisclosed way, reduce expense.
This is all unsatisfying. There is no hint of how it is to be done. We approach election day with that vital fact still deep in mystery. The public is asked to believe that debts and taxes cannot be reduced unless the government has a bigger majority in parliament. Why did the government not try? Would the Progressives have withheld support, or the Senate approval, of a genuine measure of retrenchment? And had they done so, why mistrust the people to whom the final appeal could have gone? The electors would then have known what to do with both Progressives and Senate. They would have been able to judge the merits of the government plan. They could have known exactly where Mr. Meighen stood.
Now is Your Chance!
THERE is nothing political about taxes,” says Henry Ford. The day the tax collector calls is the zero hour of patriotism. The vitality of partisan fervor then falls to its lowest point. For five years in every parliamentary term the people have nothing to do with taxes excepting to pay them. Once only during that time can they give instructions that they be lowered. That longed-for moment is upon the Canadian people. They want their taxes reduced. Taxes must be lowered
if business is to survive. Canadians want to see men in parliament who have the ability more nearly to balance revenue and expenditure. And they want some assurance of how these men propose to do it.
Every party in Canada has been passionate for retrenchment before election. The taxpayers know how far those promises have been redeemed. But the U.S. furnishes a hopeful omen. Coolidge is one of the few men in public life whose enthusiasm for economy survived election. He has unleashed in the pork barrel jungle of U. S. politics the old New England instinct for frugality, the pioneer spirit of thrift. Secretary Mellon first propounded a plan to reduce taxes on profits and super taxes on income. He was attacked as every man who attempts the same thing will be attacked by the stupid demagogues and the mischievous agitators. The Democrats and the Progressives both opposed him. But the nation set its seal on his plan. And Coolidge made it his first concern.
“For seven years,” he declared, on taking office, “the people have borne with uncomplaining courage the tremendous burden of national and local taxation. These taxes must both be reduced.
“High taxes reach everywhere and burden everybody. They bear most heavily on the poor. They diminish industry and commerce. They make agriculture unprofitable. They increase the rates on transportation. They are a charge on every necessary of life.
“Of all the services which Congress can render the
The Leader Who Does This Will Win!
Since the armistice, Canadians have been taxed to produce revenue approximately double that of the pre-war period. Some four years ago the sales tax, then three per cent., was increased to six per cent., and since that time only the slight reduction of one per cent, has been made. For the past two or three years the people have been smarting under the heavy total taxation, and are looking for reductions through the elimination of waste, and expenditure only on absolute necessaries.
These expectations have not been realized, and in the announcements from the leaders of both parties there seems to be little promise of the necessary drastic action.
The leader who announces or promises definitely that at the next session of Parliament either the paralyzing income tax or the industry-blighting sales tax will be abolished, will undoubtedly be the next premier.
country I have no hesitation in declaring this to be PARAMOUNT.
“To neglect it, to postpone it, to obstruct it by unsound proposals, is to become unworthy of public confidence, and untrue to public trust.
“The public wants this measure tô have THE RIGHT OF WAY over all others.”
How much longer must Canada “neglect it, postpone it, and obstruct it by unsound proposals?” In those guilty of it, will she continue to repose the “public trustl”?
Cooidge clipped the staggering sum of $2,000,000,000 off an annual budget of $5,538,000,000. Congress this year is taking off another $300,000,000 as a further step in its Spartan resolve to make the total saving nearly $3,000,000,000.
Why has Canada delayed to do relatively the same? By what curious neglect do the taxpayers permit the politicians to continue lavish expenditure, to prolong patronage, to retain the pork barrel? For these, the
politicians have no explanations, only excuses. And those who are good in making excuses, as George Stevenson said, are seldom good for anything else.
Our governments are proceeding on the unsound idea that war taxes can be maintained, as such, in time of peace, and long after the occasion for them has become normal government activity.
But we have not only maintained war taxes. We have increased them till they are now our major source
of federal revenue.
The tariff, and excise, are no longer our principal sources of income. In Armistice year Canada's revenues from taxation were $196,000,000. Of these $25,000,000 or 12% per cent, were from war taxes. By 1920 we were deriving $82,000,000 or more than 27 per cent, from war taxes out of a total tax revenue of $293,000,000. We were then in the midst of re-establishment. But in 1924 out of a total revenue from taxes inflated to $342,000,000, we actually drew $182,000,000 or 53 per cent, from war taxes. We are collecting within four millions as much from sales, cheques and transportation war taxes as our total revenue from taxes amounted to in 1916.
High Taxes and Waste
pRESIDENT WILSON warned Congress
as 1919 that high income and profits taxes in peace times were productive of waste and inefficiency and destructive of business activity.
“There is a point,” he said, “at which, in peace times, high rates of income and property taxes discourage industry and energy, remove the incentive to new enterprise, encourage extravagant expenditures and produce individual stagnation with consequent unemployment and other attendant evils.”
Could more prescient or prophetic words have been uttered with regard to Canada? Does any one, not incapable of observation, doubt the truth of that statement in the light of Canadian experience?
Business is hamstrung. The spirit of commercial adventure is stifled. Pessimism and uncertainty creep in everywhere.
“I would slow down the government before it slows down the business of the nation,” declares Senator Underwood. Canada has deferred that act too long. Now is the time to apply the brakes.
“Give this reduction of taxes the right of way,” said Coolidge. Let Canada deliver to her politicians the same uncompromising mandate on October 29.
This is a matter of commercial life and death, not to the large taxpayer but to the small one. Eventually it is on the small taxpayer that the burden falls. The experience of other countries proves it. In 1916 there were 216 incomes in the U.S. paving taxes on an annual income of $1,000,000 or more. The next year when the tax was increased these fell away to 141. Thereafter they steadily decreased till in 1921 there were only 21 such fortunes from which to exact the tax. Capital was either withdrawn or converted into nontaxable form.
Coolidge grasped the situation at once—and met it. “Reduce the surtaxes,” said the president. “If the rates on high incomes are so high that they disappear, the small taxpayer will have to bear the entire burden.”
That is what is happening in Canada. And that is one reason why the small taxpayer is leaving the country. He can do so with little inconvenience. The large taxpayer cannot. Instead he employs experts to adjust his income so that he will not be bankrupted by the inordinate needs of profligate politicians.
And, as each small taxpayer departs, the remaL must assume a constantly increasing load. bring in more immigrants and thus lowecries one school of politicians. “Let us and attract more immigrants,” is r For the vital motives in emigration ?• opportunity and the desire to posc freedom: they include also the sive taxation. The new sett’ land where taxes are hig1’ are low. Canada, unr latter class.
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No one can minimize the problem of the National Railways in adding to the burden of government. They are costing $200 a minute. In six years, according to the Senate committee, they have added $100,000,000 annually to our national obligations. They were responsible for an addition of almost $600,000,000 in the last five years. They have doubled the pre-war national debt. There is no assurance that their deficits will decrease.
Our losses are not all shown in the C.N.R.annual statements, for we are depreciating the earnings of a deserving private railway enterprise, the C.P.R., and exposing it, as a wise commentator has pointed out, to an exhausting competition with the national treasury to whose deficits the C.P.R. is a major contributor.
We are told that by merging, or coordination, annual losses could be reduced by $50,000,000. Yet not a single step has been taken to bring to an end this disastrous drain on our national resources. It is the first business of the electors to find out what the government and opposition leaders propose to do about it. Neither is entitled to a blank cheque.
IT IS idle to suggest that reduction of our expenses must wait the election of another parliament. The vicious waste of public funds goes merrily on and the supplementary estimates are studded with small votes for wharves and harbors where there is no shipping, and for six million dollar bridges which the local business community declares is not needed.
Revenues can be stimulated by such business methods as would instantly be invoked in private affairs. Tariff and railways should be under boards of experienced and capable men. Greater vigilance and more thorough enforcement of customs duties at the border line and ports would greatly increase the total collections. The natural resources possibilities of the country should be mobilized, scrutinized and utilized under an adequately equipped research department, manned by the greatest experts available. Both our coal and oil wealth awaits the technical and profitable study that adequate research facilities would provide. Our natural resources department, fuel, board, trade and commerce department, and portions of other activities should be assembled in what ought to be one of the most vital and productive of government activities. The Research bureau and the Tariff board should be complementary to one another and should work in close co-operation and understanding. The jealousies of deputies and secretaries should not be permitted to obstruct them.
WHAT of our great, and often exclusive, forms of natural wealth? Is it beyond the wit of governments to capitalize thé possibilities in our asbestos, nickel, pulpwood, logs, lumber and copper matte, and insure their reduction or conversion to the most highly profitable manufactured form before they leave Canada? Must we always export copper matte and import copper plate and wire? Must alien hands alway supply the skilled labor and
Canadian hands the rough labor? Must we be literally hewers of wood and impounders of water to furnish raw material and power for export?
While Canadian authors pay heavy income taxes on their royalties in other lands and we impose no corresponding tax in ours; while parcels of $100 value pay a smart consular fee going into the United States and none is exacted by Canada; while we maintain, often at a loss, 600 ports of customs entry compared with the profitable operation of half that number on the United States side, we can scarcely be said to have exhausted the sources of revenue from the foreigner, however ruthless we have been in exacting it from our own people.
The premier is asking for a government with the POWER to govern. What about one with the ABILITY to govern? A government with power may lack ability; one with real ability will not long be denied adequate power by the Canadian people. President Coolidge may have dared much when he inaugurated his policy of economy; but the result has been a startling and unexpected growth in his authority and popularity with the American people. But the man who attempts these things must have courage that is native, not simulated.
Electors Not Blameless
THE Canadian people are not blameless. It is reassuring to see men of the Vincent Massey and Patenaude type assuming some direct responsibility in this fight. More of such men are needed. But it is quite as essential that electors generally shall interest themselves in their primaries with a view to securing men pledged to and capable of carrying out economies, and that they shall refrain from preaching economy and yet rejoicing in the pork barrel. By so doing they defeat that for which they strive. When they prescribe economy to their government they must neither expect nor accept any exceptions to the rule.
To-day there is no pretence of abolishing the pork barrel. There is no serious attempt to lower, but rather to increase taxation. There is no serious effort to solve the railway problem. There is no drive for immigration. We have the same loose, prodigal appropriations for public works. We have the same duplication and competition in Ottawa departments. We have the same vicious patronage system. In these respects ours is a government not of utility but of futility.
The people of Canada are in a stern mood. They are not misled by the subterfuges of the politicians. But they are baffled in their hope for relief.
The Dominion established in the war a high reputation for initiative and courage. It did not wait on other nations. It accepted its tasks and never failed. The greatest disservice any public man can render this country is by his own pusillanimity to cause that high estimate to be lowered in the eyes of the world.
It is that fact that gives to the forthcoming election a significance and importance seldom, if ever, equalled in the life of the Dominion. And it is a recognition of that fact that should cause the people of Canada to insist on political leaders equal to her supreme tasks.