Published on: 7/14/2014 9:26:33 AM Print | Font Sizes:  Normal Text Large Text

You asked for it

By: David Robinson

David Robinson, Economist, Laurentian University,
David Robinson, Economist, Laurentian University,

On April 8, 2013, Ron Johnson was fired as the CEO of J.C. Penney. Johnson was the guy who basically invented the Apple store. His stores made more money per square foot than any retail operation in history. Johnson was a retail genius. He was fired for being honest.

Johnson had really crazy ideas. He thought customers were sick of complicated clearance sales and annoying pricing tricks. He stopped marking up prices and then offering discounts. He stopped using heavy promotions and coupons. He lost $163 million gambling on the crazy idea that customers wanted honest products and honest prices.

Politicians in Ontario haven’t made Johnson’s mistake. All three main parties promised that we could have everything without paying for it. Timmy said he could cut spending without reducing what we get. Kathy said we could have more without paying more. Andrea promised to cut the deficit and increase spending. They all lied.

They had to lie—we the voters wanted them to lie. That is the key point: YOU and I made them lie. And only we can change the game.

We got suckered into thinking that we can have health care and education, roads and sewers, and protection from bad guys, terrorists and climate change, all without paying more taxes. We got suckered into seeing government as something that takes away our money instead of a way we co-operate to buy what you need. A kind of population explosion in the anti-tax, anti-government American Republican right set up outposts in our defenceless Canadian minds.

Those ideas produced a dilemma for our politicians. If one party tells us we have to pay for what we want, the other parties can set off a knee-jerk reaction among voters by howling about raising taxes. Simple-minded voters switch to the liars and the liars win. Politicians who tell the truth are weeded out, just like Don Johnson got weeded out at J.C. Penny. He didn’t fake low prices and the shoppers went to other stores.

Like the J.C. Penny shoppers, we take honest people and make them lie to us.

I know enough politicians personally to know that most don’t like marketing delusions. A few do believe the goofy things they have to say, but most go along with the game because they honestly believe they can’t get elected if they tell us the truth. They think you and I can’t accept the fact we have to pay for what we get. And most of them honestly believe that we will be worse off if we vote for the prevaricator in the other party.

Because we won’t face the truth we have become a nation of freeloaders. The freeloading happens at every level. Properties close to downtown cost more than properties in the suburbs, so they pay higher taxes. Unfortunately, roads and sewers, snowplowing, bus service, garbage collection, and policing cost a lot more when homes are spread out. Result? We slimeballs in the suburbs are being subsidized by the people who live downtown.

As householders, we are being subsidized by commercial and industrial properties. As drivers, our free mall parking is subsidized by apartment dwellers and downtown businesses. As corporate leaders we move money offshore to low-tax jurisdictions. Companies and governments offer pension plans and then leave the next generation to find the money. The really rich have run a brilliant campaign for lower taxes and ways to hide income.

It is the really rich that benefit from our tax allergy. In 1972, the top personal tax rate was close to 70 per cent. Today, the combined top personal tax rate is between 39 per cent and 48 per cent. If we decided to pay more taxes, it is the rich who would be hit hardest. Their best defence is to convince us we all hate taxes. We can’t complain about them not paying when we also refuse to pay.

So it’s up to us to change the world. Let’s try looking in the mirror and whispering, “I’m willing to pay for what I get.” Let’s tell someone at work that we think people should pay more for health care.

Let’s raise our right hands and solemnly promise to stop listening to Ontario’s free-lunch politicians next time around.

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