Sun, May 14, 2006 Time for gov't gouging to stop By TOM BRODBECK
If you want to find out how much the federal government has been over-charging us as taxpayers, check out the latest 2006 budget papers.
There's a whole section on how Ottawa has consistently been racking up massive budget surpluses since it balanced the books in 1997.
That in itself is no great secret. We've heard about larger than anticipated surpluses for years.
But what the budget does this year is take a closer look at the issue, including what can be done to end this perpetual over-charging.
Every year since 1997, the federal government has projected a modest surplus, including a $3-billion contingency fund which, if not used, went to pay down the debt.
It was good policy. And debt has been paid down to some extent (although we've still got a very long way to go).
Trouble is, because of high taxation -- including more than a decade where tax brackets weren't indexed to inflation -- and the massive employment insurance surplus racked up every year, Ottawa was taking in billions more a year than it projected.
Which simply means we were over-taxed.
On average, since 1997, the federal government's surplus was a staggering $5.6 billion more than projected. Over eight years, that's nearly $45 billion.
It's a massive amount of money. And it came right out of our pockets.
Instead of giving it back, though, they spent most of it, usually in a year-end frenzy to shore up political support.
"This reduced the scope for parliamentarians and Canadians to have an informed debate on how these fiscal dividends were allocated," the 2006 budget says.
That's a polite way of putting it.
Another way of putting it is that taxpayers were screwed.
We paid far more than we should have.
There are valid reasons why government can have unanticipated surpluses. The economy can do better than expected, for example, generating more tax revenue than estimated.
That's fine. It's going to happen.
But when it happens every year, and at such high levels, there's a systemic gouging going on that has to stop.
The explanation in the budget, based on an independent review by the International Monetary Fund, is that the federal government's fiscal projections have been more cautious than other countries since the mid-1990s.
In plain English, that means Ottawa was deliberately underestimating its revenues in order to keep taxes high, knowing full well that by the end of the year, they would be awash in taxpayer dough.
And why would they do that?
Because if you believe in big government, if you think government should play a significant role in people's lives, you need the money to spend on big, universal programs, such as the so-called national child-care program.
By consistently underestimating revenues, government every year had a whack of money to splurge on all kinds of federal programs, with the hope of winning political credit for their efforts.
What they should have done is used realistic projections and given us our money back by way of broad-based tax relief.
At the very least, we should have all received rebate cheques in the mail.