“Tax reform is a moral choice to minimize one’s complicity and to resist exploitation.”
It’s become a familiar sight: the waiter is struck dumb for a moment, then, regaining his composure blurts out,
“Yes. Separate checks, please.”
There are only five of us in our party, so while it may be a nuisance, it’s hardly unprecedented. In fact, when I was working in an office, it was common for a group to go out for lunch and request separate checks. So why the horrified gasp from our waiter?
Well, three in our party are under five years old!
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In Ontario meals priced under $4 are not subject to provincial sales tax (PST). (The GST is applied.) When several low-priced meals are included on the same bill, however, the total amount is taxed at the full rate. Many restaurants offer children’s meals below $4, and unless they are billed separately, when lumped together they are being overtaxed.
Although the practice of single billing of families’ restaurant meals is not intended to discriminate against them, the effect is that families are paying more than their fair share of tax, since typically Mom or Dad pays for ‘the kids’ meals.
No one likes paying taxes, but paying tax which isn’t owed is infuriating. So, when our family dines out, we suffer the “looks” and request separate checks.
Although we may seem eccentric (some might even say cheap!), our sensitivity to over-taxation stems from living under a system which structurally discriminates against traditional families.
Among the most punitive are those policies which favor unmarried couples over married people. What might have seemed reasonable at one time is clearly unfair in a time when unmarried and single are frequently not the same status. Today, with the rise in divorce and unmarried cohabitation, the effect of many policies and regulations is to impose a substantial financial penalty on married Canadians.
For example, a young man I know wanted to go back to university to upgrade his education. He felt this was necessary as he was soon to be married, and he hopes to raise a family. With student loans (Canada and Ontario) to assist him, he could manage to pay his way through university. What he didn’t realize was that by getting married, he disqualified himself from the loans. As a married person, his spouse’s modest income is considered as his own. This at first seems reasonable, until one considers that if this couple had chosen to cohabit without being married, this rule would not apply.
There are many examples of this kind of discrimination. In the June 1991 Kids First newsletter, Calgary North MP Al Johnson outlined over one dozen federal tax regulations which discriminate against married Canadians.
The impact is that married couples can expect to pay hundreds, and more typically thousands, of dollars more per year in taxes than unmarried couples.
Particularly hard hit are those families with one wage earner. In some situations, such as those dealing with principal residences or capital gains, the difference in deductions allowed can actually run into hundreds of thousands of dollars.
In November 1991, a Hamilton, Ontario couple, Walter and Elaine Schachtschneider, lost their bid to have the Income Tax Act declared unconstitutional because it violates the equality guarantees of the Charter of Rights. They argued that they would have paid $1,600 less in income tax in 1989 if they were a common-law couple. They expect the difference to be approximately $4,000 this year.
Judge Robert King of the Tax Court of Canada, ruling in this case, said the different treatment accorded married and non-married people in the tax law was not discrimination but, if it were, it would be beyond the jurisdiction of the Tax Court.
It would require amending or rewriting portions of the law.
Lost tax revenues
According to one economist, however, correcting this tax discrimination against families could cost the government three to four billion dollars a year in lost revenues. The long-term impact of families bearing this extra tax burden, he says, is to destroy the moral, intellectual and productive capacity of the country.
In the short term, the government lacks the will to correct this injustice.
Ideally, the Schachtschneider case would be appealed and tax equity would eventually prevail. More likely, more and more families will become alert to tax discrimination and over-taxation and will press politicians to legislate the amendments Judge King suggests would be required.
Considering how so many tax dollars are spent to the detriment of families, especially traditional families, resistance to discriminatory policies is not mere grumbling.
It is a moral choice to minimize one’s complicity and to resist exploitation.