Tax discussions and time wasters

About a month ago Frances Woolley had an interesting post over on Worthwhile Canadian Initiative about academic discourse on the Children’s Fitness Tax Credit (CFTC). In that blog post Frances wonders if the time academics have spent critiquing the Children’s Fitness Tax Credit has been “a waste of time.” (You can read my ruminations on this tax credit here, here, and here) After all, she writes, it “enjoys widespread support” among Canadian families and it does not amount to that much money.

When I first read this, I agreed that it indeed felt like efforts to educate politicians and the public on the wastefulness of these boutique tax credits was a waste of time. But I have changed my mind and I have four reasons for this.

First, some politicians are paying attention to what has been said. The Government of Saskatchewan has since made their version of the CFTC (called the Active Families Benefit) means tested, making it available only to those families with net incomes below $60,000 “to ensure that it continues to benefit those families that need it most.” The Government of Nova Scotia just today eliminated their version of the CFTC (called the Healthy Living Tax Credit) stating that “this credit is not helping low-income Nova Scotians, which was the original intent.” The Harper government also recently made the CFTC refundable. All of the actions address, in whole or in part, the critiques that have been levied.

Second, just because academic critiques have been largely ignored to date, does not make them a waste of time. Changing people’s minds takes time, and effort, sustained effort. The more I have talked about this and related tax credits with regular people using everyday language the more they have changed their minds about their support of these credits.

Third, academic discourse on this topic is easily consumable by non-academics. The papers and commentary are on a narrow, easily understood topic, but they apply principles that extend to other aspects of the tax system. This discourse has allowed non-academics to gain knowledge and information about the tax system that is generalizable to other features of the tax system. You would be amazed at how many more people now understand the basic difference between the amount of credits vs. their cash value solely because of CFTC discussion. It has allowed non-academics to enter into discussions about technical aspects of the tax system that they would otherwise have not. This links to another point in Frances’s post talking about “aspects of the tax system of greater significance of the Children’s Fitness Tax Credit.” It is opening up that discussion and debate and making the research easier to find and understand, particularly that related to income splitting, the dual tax system, and user fees.

Finally, it has gone a long way in linking academics with policy makers and, more directly, to Canadians. This is important and hugely beneficial. Even if we all don’t agree, right Frances. 😉

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