By contrast, when Kansas Governor Sam Brownback abruptly slashed the state’s top income tax rate by 26 percent in 2012, state revenues went into a freefall. Yet the notions that government is always a plague upon the economy and that lower tax rates will lead directly to growth and prosperity—which have together accreted into a core plank of U.S. conservative ideology since the Reagan years—still remain popular. And Donald Trump seems intent on steering the country onto the same downward trajectory as Kansas: His “Taxpayer First” budget plan, released in May, proposed enormous tax cuts that, his administration claimed, would pay for themselves through the economic boom they’d bring about. (In an analysis released last week, the Congressional Budget Office took a much dimmer view.)
There are a few scattered signs that GOP state legislators see the limits of this strategy: As The New York Times reported in early July, conservative lawmakers in several red states have grudgingly acknowledged that they need to boost tax rates to keep public services viable. Indeed, even Brownback’s own fellow Kansas Republicans successfully revolted against his cuts. But fiscal moderates like these often have to do battle with their own governors in the process.
Has Canada figured this all out? Of course not. Some of its communities, especially remote indigenous reserves, are afflicted with poverty and squalor that stain the national conscience. But when I recently interviewed Canadian business leaders about the challenges they perceive, the word taxes didn’t get mentioned much. Instead, I heard a lot about the need for high-skilled workers, the lack of affordable real estate, dangerously high household-debt levels, and the importance of mass-transport infrastructure.
In these discussions, Canada’s universal health-care system was often described as a plus. Because Canadian entrepreneurs can quit their day jobs without their spouse losing access to dialysis, or their children losing access to pediatricians, such a system allows business-builders more professional freedom. (Under this system, Canadians tend to live longer than Americans, though they also spend more time, on average, waiting for treatment.)
My wife and I signed our 2016 tax returns about a month ago. In total, we gave up about 42 percent of our income to the federal government and to the province of Ontario. Add in property taxes, gas taxes, and sales taxes, and the figure goes up to about 46 percent. By my rough calculation, a similarly situated couple living in an equivalent part of the United States—I picked Chicago, which sometimes is described as a sort of sister city to Toronto, where I now live—that number would be about 10 points lower, at 36 percent.
What does that 10 percent premium buy for my family? Aside from universal health care, there’s world-class public schools, a social safety net that keeps income inequality at rates well below America’s, and an ambitious infrastructure program that will help Canada keep pace with its swelling ranks of educated, well-integrated immigrants. Oh, and I also get that new bridge. Naturally, it will have a bike lane, and be named after the hockey legend Gordie Howe.
Canadians tend not to talk about making their country great again. Canada never was particularly great—at least not in the sense that Trump uses the word. Unlike Americans, Canadians haven’t been conditioned to see history in epic, revolutionary terms. For them, it’s more transactional: You pay your taxes, you get your government. That might not be chanted at any political rallies or printed on any baseball hats. But it works for Canada. And it’d work for America too.