While I’m on the subject of taxes, consider payroll taxes. We want to maintain employment without increasing our consumption of resources, yet the taxation system actively punishes employment. The Canada Pension Plan and Employment Insurance are progressive at lower income levels and a head tax at higher income levels. The employer matches employee contributions while self-employed individuals pay both shares. Often, there are added costs for accident insurance and perhaps health coverage. Thus, the total tax cost of a worker is at least 22% more than the actual salary being paid.
Therefore, to be employed, the productivity of workers must be at least 22% more than their salary. In a service industry where 12% HST is also payable, the tax load is a whopping 37%. Are there any resources that are taxed at as high a rate as human labour? Does this make ecological sense?
A principle of source of unemployment is the substitution of labour-saving technology for human labour. This technology is always more energy-consuming and resource-depleting than a worker, whether employed or unemployed. From an ecological perspective, does it make sense to have a tax system which systematically favours energy and resource consumption over human labour?
While we’re still considering the right thing to do, can we change policies that are clearly wrong?