Taxes: The Price of Civilization (or a Collective Investment?)

7 min read
February 15, 2025

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Published on February 15, 2025

Every April, millions of Canadians engage in our most beloved national ritual: complaining about taxes while simultaneously praising the services they fund. It's like criticizing the restaurant bill while asking for seconds.

"Taxes are the price of civilization," said someone important enough that people keep quoting them, though nobody seems to agree on whether we're getting a good deal or paying premium prices for basic cable.

Let me tell you about civilization's invoice.

A Brief History of Creative Revenue Collection

Humans have been finding creative ways to fund collective endeavors since we figured out that roads don't build themselves and armies prefer regular paychecks.

Ancient Egypt had farmers hand over portions of their harvest, which sounds reasonable until you realize they measured wealth in grain and disappointment. Try explaining to Pharaoh that your crops failed because you spent too much time building his pyramid.

Medieval Russia briefly imposed a beard tax, because apparently facial hair was a luxury item that needed regulation. Imagine showing up to work clean-shaven and having your colleagues ask if you're having financial difficulties.

The Indigenous peoples of what became Canada had trade and gift economies based on reciprocity rather than imposed levies. Everyone contributed what they could when they could, and somehow society functioned without tax accountants or audit threats. Interesting concept.

Enter John Kenneth Galbraith: The Economist Who Got It

When discussing taxes and civilization, it's worth mentioning John Kenneth Galbraith, who grew up in Iona Station, Ontario, and became one of Canada's most influential economic thinkers—which is impressive given that most people can't name any Canadian economists.

Galbraith looked at postwar America and noticed something interesting: private wealth was growing rapidly while public infrastructure was crumbling. People had nice cars to drive on terrible roads to reach underfunded schools and understaffed hospitals.

His insight was that civilization requires balance between private prosperity and public investment. You can't have a functioning society where everyone's rich individually but collectively broke. It's like having a hockey team where every player owns expensive equipment but nobody wants to pay for ice time.

Galbraith argued that taxes aren't just revenue collection—they're society's way of investing in shared prosperity. The "affluent society" he envisioned would be affluent for everyone, not just people with good accountants.

The Canadian Interpretation

Canada took Galbraith's ideas and added our own special touches: universal healthcare, subsidized education, employment insurance, and a social safety net that catches most people before they hit rock bottom.

We've essentially decided that certain things—medical care, basic education, emergency services—should be available regardless of ability to pay. It's socialism for essential services, capitalism for everything else.

The result is a system where your appendix removal is free, but parking at the hospital costs more than some people's hourly wage. We've socialized healthcare but privatized the parking meters. Peak Canadian compromise.

The Moral Mathematics of Contribution

Taxes get philosophically interesting when they force us to quantify our obligation to society. How much do you owe your fellow citizens? What's a fair share? Should contribution be based on ability to pay, benefit received, or some other formula entirely?

The progressive tax system says people who earn more should contribute proportionally more, which makes sense until you start debating what "proportionally" means. Is it fair that someone earning twice as much pays three times as much tax? What about five times? At what point does "fair share" become "punitive redistribution"?

These aren't just accounting questions—they're moral questions disguised as math problems.

The Efficiency Paradox

Tax policy becomes maddening because good intentions don't automatically create good outcomes. Every tax credit, deduction, and program starts with noble goals but can create unintended consequences that nobody anticipated.

The mortgage interest deduction was supposed to encourage homeownership but may have inflated housing prices. Child tax benefits help families but might reduce work incentives for some parents. Charitable donation credits encourage giving but create tax planning opportunities for wealthy donors.

It's like trying to steer a ship by adjusting hundreds of different controls simultaneously while other people keep moving the controls and changing the destination.

The Services You Didn't Know You Used

Most people think about taxes in terms of big, obvious services: healthcare, education, roads. But civilization includes a lot of invisible infrastructure that we only notice when it breaks.

Food safety inspections keep us from getting poisoned by our lunch. Weather forecasting helps us dress appropriately and avoid flying into storms. Currency regulation ensures that your money retains value from one day to the next.

Patent offices protect innovations. Trade regulations keep dangerous products off store shelves. Workplace safety inspectors prevent employers from treating workers like disposable resources.

These aren't glamorous services, but they're the difference between modern civilization and medieval chaos with better technology.

The Free Rider Problem

The fundamental challenge with public goods is that everyone benefits whether they pay or not. You can't exclude people from national defense, clean air, or disease prevention based on their tax contributions.

This creates incentives for free riding—benefiting from services while avoiding payment. If enough people do this, the system collapses. But preventing free riding requires enforcement, which costs money and creates its own problems.

It's like trying to run a potluck dinner where some people show up empty-handed but still expect to eat. Eventually, the people bringing food stop coming.

The Democratic Experiment

What makes taxes interesting in a democracy is that we collectively choose how much civilization we want to buy. We vote for politicians who promise different combinations of services and tax levels, then complain when they deliver exactly what they promised.

Canadians have generally chosen higher taxes and more services than Americans, but lower taxes and fewer services than Scandinavians. We're the economic equivalent of medium-roast coffee: satisfying to most people, exciting to nobody.

This democratic approach to taxation means we get the civilization we vote for, which is both empowering and terrifying.

The Price Check

So what's the verdict? Are we getting good value for our tax dollars?

Compared to other developed countries, Canada delivers decent public services at reasonable cost. Our healthcare system costs less per person than the American system while covering everyone. Our education system produces good outcomes without bankrupting students. Our social safety net prevents the extreme poverty visible in other wealthy countries.

But we also have problems: infrastructure backlogs, housing affordability crises, and growing inequality that suggests our tax system isn't keeping up with economic changes.

Maybe the question isn't whether taxes are the price of civilization, but whether we're investing in the right kind of civilization for the 21st century.

The Bottom Line (After Deductions)

Taxes aren't just the price of civilization—they're civilization's subscription fee. We're all members of society whether we like it or not, and membership comes with both benefits and obligations.

The quality of our collective life depends on our willingness to contribute to shared investments. You can complain about the cost, but you can't really cancel your membership.

Next time you file your taxes, remember: you're not just paying bills, you're investing in the society you want to live in. Whether that's a good investment depends on how well we use the money—and that's ultimately up to all of us.

John Kenneth Galbraith would probably say we're still figuring out the right balance between private wealth and public investment. The good news is that democracy gives us the chance to keep adjusting until we get it right.

The bad news is that means more tax debates in the future.

References

Classic Economics:

Canadian Tax Policy:

Government Sources:

  • Canada Revenue Agency, "Tax Statistics" Annual Reports
  • Statistics Canada, "Government Finance Statistics" 2024
  • Parliamentary Budget Officer, "Federal Tax Expenditures Report"
  • Treasury Board of Canada, "Public Accounts of Canada"

Research:

  • C.D. Howe Institute, "Tax Policy Research Series"
  • Mowat Centre, "Fiscal Federalism Studies"
  • Personal experience filing taxes and wondering where the money goes

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