Tax cuts are wonderful, but the feds need to be careful

It was great news that federal Finance Minister Jim Flaherty offered us last week.

Taxes are going to be cut by some $60 billion over the next five years, although that's probably predicated on the Conservatives being in power for the next five years, and assumes the economy doesn't tank in the interim, thus obliging the government to amend its plans.

Hands up all of you out there who like paying taxes. None of us do, but since they are a necessary evil in life, we want them to be as low as possible.

Canadians have long been in the habit of complaining they are overtaxed. Yes, cutting taxes the way the feds are planning to is guaranteed to make a lot of people happy.

We expect they will really be pleased at income tax time early next year. Since the income tax cuts are retroactive to the start of 2007, the refunds that most people should be expecting promise to be pretty impressive.

The cut in the Goods and Services Tax (GST) from six to five per cent should put smiles on a lot of faces too when it kicks in at the start of 2008. The reality is chopping one per cent off the price of anything is not going to make a major difference in the great scheme of things, but it is true that every little bit helps, just as it's accurate to say that a tax cut is a tax cut.

But in the midst of all this glee, Canadians are going to have to bear in mind certain other realities. We have to remember why governments collect taxes.

They collect them to fund the programs on which we depend. Our government uses taxes to finance a military which is currently in operations, especially in Afghanistan. Our government uses taxes to help provinces finance some of their programs. Our government uses taxes to help people in need. Our government needs tax dollars to do what we expect of it.

That leads to a basic question. Is the government cutting taxes too much? Are programs going to be scrapped that many Canadians want, and some actually depend on?

We received a hard lesson on the dangers of excessive tax cutting in Ontario a couple of years ago. Mike Harris was big hero when he cut our tax burdens. He sent out cheques of $200 to many of us, telling us they were rebates for having been taxed too much. Those cheques made a lot of us very happy.

But it wasn't until later that we learned those tax cuts represented some other unpleasant realities. The question still looms that program cuts in the wrong places might have contributed to the Walkerton tragedy. The government supplemented the reduced tax revenue by selling off certain assets, like Highway 407. There are other examples.

"But that could never happen again," many people might be inclined to exclaim. "The Harris crowd is out of office."

Flaherty was part of the Harris crowd.

There is a basic rule that children are supposed to be taught by their parents: Nothing in life is free, and nothing good ever comes without a cost.

When we get services from our government, we're expected to pay.

And when we get tax cuts from our government, we pay too. It's just that sometimes that tab is hidden.