It's the New Year and for provincial taxpayers, that means tax cuts. Naturally, this being British Columbia, tax relief opponents have already labelled tax relief as "unfair." Unfairness is often in the eye of the beholder, and the tax cuts opponents range from the predictable (public sector unions who think above-market wages are a birthright) to those who practice the economics of envy, never mind what such policies do to real wealth creation. (Hint: After the past decade, it gave B.C. a pathetic economy just when we should have boomed.

But, should they bother with the facts, tax cut critics will have a tough time of getting around the facts of taxation in Canada, and who actually bears the lion's share of the tax bill. For example, the top 30 percent of all income earners in Canada pay 65.7 percent of all taxes. In contrast, the bottom 30 percent of all income earners pay just 4.3 percent of all taxes. If steeply progressive rates are the measure of "fairness," Canada is already one of the "fairest" tax systems of them all (and painfully so if you're trying to create wealth). As for the provincial tax cuts in 2002, they're structured so as to provide the greatest percentage tax break to those with lower incomes. The tax relief percentage gets progressively smaller as one moves up the income ladder.
Coincidentally, the following "tax cut parable" made the Internet rounds recently, apparently from the Chicago Tribune. And it makes the point about "fairness" arguments better than any dry reciting of statistics ever could.

A TAX CUT PARABLE

Every night, 10 men met at a restaurant for dinner. At the end of the meal, the bill would arrive. They owed $100 for the food that they shared.

Every night they lined up in the same order at the cash register. The first four men paid nothing at all. The fifth, grumbling about the unfairness of the situation, paid $1. The sixth man, feeling very generous, paid $3. The next three men paid $7, $12 and $18, respectively. The last man was required to pay the remaining balance, $59. He realized that he was forced to pay for not only his own meal but the unpaid balance left by the first five men.

The 10 men were quite settled into their routine when the restaurant threw them into chaos by announcing that it was cutting its prices. Now dinner for the 10 men would only cost $80. This clearly would not affect the first four men. They still ate for free. The fifth and sixth men both claimed their piece of the $20 right away. The fifth decided to forgo his $1 contribution. The sixth pitched in $2. The seventh man deducted $2 from his usual payment and paid $5. The eighth man paid $9. The ninth man paid $12, leaving the last man with a bill of $52.

Outside of the restaurant, the men began to compare their savings, and angry outbursts began to erupt. The sixth man yelled, "I only got $1 out of the $20, and he got $7," pointing at the last man. The fifth man joined in. "Yeah! I only got $1 too. It is unfair that he got seven times more than me." The seventh man cried, "Why should he get $7 back when I only got $2 "

The nine men formed an outraged mob, surrounding the 10th man. The first four men followed the lead of the others: "We didn't get any of the $20. Where is our share " The nine angry men carried the 10th man up to the top of a hill and lynched him. The next night, the nine remaining men met at the restaurant for dinner. But when the bill came, there was no one to pay it.