Put Your Money Where Your Mouth Is, Progressives

There is understandable concern in many countries that a sizable proportion of working-class voters have abandoned progressive parties for populist alternatives. There are undoubtedly many reasons for this.

It is a shame, for example, that those who now readily absorb conspiracy theories somehow ignore the most plausible “conspiracy” of all: that some wealthy people fund think tanks, advocacy, influencers and political campaigns that further their self-interest by advocating low taxes and by vilifying the government programs on which taxes are spent.

Yet it’s clear the working class in many countries has come to doubt that progressive parties really have their interests at heart. There is much justification for this skepticism.

Progressive parties tend to be dominated by professionals — people just below the much-pilloried top one per cent in income distribution. While progressives talk a lot about social justice, they do not often suggest or take bold action that would mean transferring some of their income to the disadvantaged.

There is an obvious litmus test for progressive professionals: Are you willing to pay more (directly or via taxes) so that your waitress does not have to struggle to feed her children, or your janitor can put a roof over his family’s heads, or your Uber drivers do not have to juggle so many part-time jobs that they hardly see their kids?

It is easy to pretend to be progressive at no cost. A real progressive is willing to make some personal sacrifices in the pursuit of social justice.

There are policies that those who pass the progressive litmus test can advocate:

• Expand earned income tax credits for those with low but positive net income to aid the poor while incentivizing work, especially for those with children.
• Institute public-works programs that hire unemployed and underemployed people to perform valuable work in the community. This will directly provide security to those struggling to find regular full-time employment, while also increasing the demand for unskilled labour, putting upward pressure on private sector wages and working conditions.
• Implement a low but guaranteed income. We do not want Canadians to starve and we want them to be able to afford some form of shelter. But we do not want to sabotage the work ethic.
• Enhance programs such as pharmacare and free dental care — and fund our health-care system adequately.
• Replicate a system used by Finland, Norway and other Organization for Economic Co-operation and Development members that automatically prepares income tax returns for the majority of taxpayers. This would ensure that all Canadians, especially those with low incomes, receive the benefits for which they are eligible but which they can’t collect when they don’t file tax returns.
• Encourage construction and even build low-cost housing units (as in the past). We should look for the least costly way of providing good affordable housing.

The key is progressive income taxes and inheritance taxes to pay for these and other policies that support economic growth and thus increase the tax base, even as they make the top 20 per cent pay more.

Canada used to have much higher tax rates on those with the highest incomes but let these fall in recent decades. Note that policies to encourage growth are a complement to progressive taxes rather than a substitute for them.

These economic policies can be supported by political reforms.

First, if we recognize that elected politicians do not seamlessly pursue the best interests of average Canadians, we should convene randomly selected people to debate the issues of the day in citizen forums — then act on their recommendations.

This may be especially important in social policy. Let those toward the bottom of the income distribution have some say about how best to help them. (If you like that idea, how about this? Give voice to ordinary Canadians by appointing people at random to the Senate to make it more reflective of the country and thus more relevant.)

Second, each Canadian should be allowed to devote a dollar or two of their taxes to a political party, to a media organization and to arts and sports funding of their choice.

This would shift the balance of power from the few toward the many. We can hope that many Canadians will choose to support news organizations that provide careful unbiased analysis and investigative journalism. Having taxpayers directly support news organizations is far better than making news organizations dependent on subsidies from the governments on which they report.

Speaking of taxes, a simple response to some of the misinformation about government spending is to tell taxpayers on their assessment notice where their taxes are spent. Surveys show that taxpayers severely overestimate how much is spent on social assistance or foreign aid. They may be pleasantly surprised to find out how much of their taxes go for things they value personally such as health care and transportation. Governments also need to advertise the positive results of government spending.

These policies are both easy to understand and can potentially appeal to people across the political spectrum. They help the disadvantaged without trashing the incentive to work or trying to ignore market forces.

We all benefit from social stability. Addressing the needs of the working poor enhances that.

Income and wealth inequality has grown in most countries over the last decades. This is a common trend, which history suggests encourages political instability. Sacrificing a little income in the pursuit of political stability is a prudent investment for both the one per cent and the 20 per cent at the top.

Really helping the disadvantaged also has positive spillovers for the rest of us, such as likely reducing homelessness, crime and addiction.

I hope that progressive support of social justice is not just talk and that even selfish people toward the top of the income distribution ladder see some advantages in taking these actions.