The federal government spent more than a quarter of a century racking up deficits and debt and boosting taxes. Finance Minister Paul Martin would have you believe that it will take another generation to bring tax rates back down.

This seems timid stuff from the man who managed to turn a $42 billion annual shortfall into a surplus in just four years. He succeeded only because taxpayers shouldered most of the burden, and now they deserve to have that load lightened as quickly as possible. The ‘balanced’ progress in this fiscal year — a $300 million tax cut and $5.4 billion in new spending — is not an encouraging sign.

One of the more misleading tables buried in the fine print of the 1999 budget includes this curious description of how the federal deficit was slain and surpluses came sloshing in. Since 1993/94, the fiscal year in which the Liberal government took office, it says that ‘reduction in program spending’ has improved the balance by $15.4 billion (offset by $7.5 billion in new spending added in the 1998 and 1999 budgets), while ‘higher revenues due to economic growth’ have accounted for $37.8 billion.

What the budget means but does not say is that higher taxes have done almost five times as much as net spending cuts to get the books to where they are today. And even as the government splurges its newfound surpluses, the tax take continues to rise.

It is true that a growing economy produces growing tax revenues. But the great white shark of federal tax collection has many teeth and an insatiable appetite — and it has been chomping most voraciously on the arms and legs of individual taxpayers.

Over the past five years, federal revenue from personal income tax has jumped by more than $22 billion or 43 percent. Compare that with growth in the economy over the same period — just 23 percent. And then compare it with growth in labour income — a mere 18 percent.

To put that another way, the government’s income tax take has risen almost twice as fast as the economy as a whole, and close to two and a half times as fast as wages and salaries.

• Personal income tax is accounting for an ever-growing share of total federal revenue. By next year, even according to the budget’s very modest revenue projections, it will bring in more than one out of every two federal tax dollars.
  
• No matter how you slice the numbers, Canadians pay too much personal income tax. Consider just a few examples:
  Personal income tax takes a larger slice of the economic pie in Canada than in any other G-7 country;
  
• Personal income tax as a percentage of family and individual income has reached a record high;
  
• Households on average pay more to support governments through income tax than for the roofs over their heads. The total tax bill of the average family exceeds the cost of food, shelter and clothing combined;

Rising income tax bills have left families at all but the lowest income levels worse off after tax since the mid-1980s, with middle-income earners the hardest hit;

Widespread income-testing of tax credits and benefits means that even families with modest incomes can lose two thirds or more of each extra dollar they earn; and

The partial deindexation of tax brackets and credits since 1986 forces more Canadians each year to pay higher taxes even when their real incomes stay flat. This lack of protection against inflation will eat up all of the tax cuts announced in the 1999 budget within two to three years and keep pushing tax bills higher thereafter.

In the meantime, Canadians who are considered rich enough to pay this country’s top personal tax rate can look south to see Americans with similar incomes paying 12 percentage points less than their already lower maximum rate.

With apologies to Ross Perot, that giant sucking sound from the south comes from the moving trucks carrying away our talented sons and daughters and some of the best and most experienced minds in our universities, hospitals, research institutions and corporate head offices.

Excessive taxes discourage growth. Low and middle-income families have little incentive to save, to work harder or to upgrade their skills. Entrepreneurs think twice about risking their time and money. Highly-skilled and mobile Canadians seek opportunities abroad. Companies that depend on such skills invest where they can hire the people they need.

By the same token, lower taxes stimulate growth, especially in the high-wage, knowledge-intensive economy. Take Ontario as an example. According to provincial budget figures, Ontario’s personal income tax revenue rose by 12 percent in the last fiscal year. That matches federal growth in personal income tax revenue, even though Ontario’s tax rates were falling.

Substantial personal income tax cuts — as large and as quickly as prudent fiscal management permits — are the best way to encourage risk-taking, promote greater productivity and help the economy grow. And a growing economy is what will deliver more opportunities for our young people, better jobs and higher disposable income for middle-class families, and the greatest security for seniors and for anyone who depends on Canada’s social safety net.

Canadian taxpayers have worked hard to get this country’s finances in order. They deserve a meaningful break as soon as possible. They certainly should not be forced to wait another generation for significant, broadly-based tax cuts.

Canada’s excessive personal income tax rates hurt more than the pocketbooks of individual Canadians. Dribbling out tax cuts over 20 years — a few more pennies a day in each budget — is a recipe for another generation of lost opportunity, lagging economic growth and a crumbling standard of living for all Canadians.