A Monograph

Democracy, Accountability, Responsibility and Taxation

Paul Isaacs

June 2013

Introduction

Most democracies have representative governments. In Canada the constituent to representative ratio is approximately 100,000:1. As a consequence the tax revenues from approximately 100,00 people effectively flow through a single respresentative.

If it is assumed that each person pays $10,000 in tax per year, each representative is responsible for approximately 1 billion dollars of taxes per year.

The current structure of the Canadian government gives the Prime Minister almost absolute control over the members of his party and gives the "government" of the day almost absolute control of the legislative agenda. Therefore, a further concentration of the tax cash flow occurs and the Prime Minister effectively has control over about 300 billion dollars of tax revenue each year. The result is that, in dollar terms,the level of representation effectively becomes 30,000,000:1.

Tax Collection

In Canada the collection of taxes is preformed by the Canada Revenue Agency. This agency is not directly subject to any oversight by either elected representatives or members of the public. The agency's public contact representatives are anonymous and, as individuals, totally unaccountable. In Canada there is no significant connection between the collection of taxes and the expenditure of taxes. There is no direct connection between elected representatives and the collection of taxes.

Accountability and Responsibility

In Canada there is currently a great deal of discussion with respect to the accountability of government.

However, one can win a lottery and account for every penny while simultaneously irresponsibly spending every penny.

Accountability, while necessary, is far from sufficient to ensure the responsible spending of tax dollars.

Accountability is an exercise in record keeping. It is far from correct to imply that being accountable is sufficient for good governance.

Democracy and the Concentration of tax dollars

As the ability to control tax dollars is concentrated the level of democracy declines. There is little use in having many voices contributing to democratic debate and discussion if, in the end, only a select few control the money. Democracy is further debased by monetary concentration because people who wish to influence government decisions can focus all their efforts on the few who, in practice, control the purse strings and, thereby, ignore any involvement in democratic debate with impunity.

Summary

Democracy in Canada is seriously degraded by the manner in which tax dollars flow within the government.

No elected representative is a direct part of the tax collection system. Therefore, no citizen has any direct representation in the tax collection system.

The party system ensures that there is a leader of a political party who is the Prime Minister and that the Prime Minister has almost autocratic control over the elected representatives of his or her party. Therefore, no citizen has any direct representation with respect to tax expenditures.

Perfect accountability would not affect this structure in any way. Therefore, accountability, while necessary, will not, of itself, improve the level of democracy in Canada.

A partial remedy would be to put elected representives directly in the tax collection flow by moving the responsibility for tax collection from the Canada Revenue Agency and making every Member of Parliament directly responsible for the collection of taxes in his or her riding.

The freedom from any responsibility for tax collection that elected representatives currenty enjoy would be eliminated and the anonymity of the Canada Revenue Agency that Canadian citizens have to endure would also be eliminated.

Members of Parliament would be much more attentive to the wishes of their constituents in regard to taxation and expenditures if they knew that their re-election depended on being attentive to those wishes.

Making the Members of Parliament directly responsible for tax collection in their ridings would also reduce the Prime Minister's direct control over the entire tax revenue stream. Opposition Members of Parliament would be directly responsible for their portion of the tax stream and would be far more likely to demand that their constituents wishes be taken into account.

Conclusion

A democracy in which individual citizens have no ability to influence how their tax dollars are collected and spent is a democracy in name only.

The collection and expenditure of tax dollars is a central purpose of any government. To be a democracy individuals must be able to make their voices heard by being able to influence the disposition of their taxes. In a representative democracy, individuals must be able to influence their representative. It follows directly that their representative must also be able to influence the disposition of their taxes.

The inescapable conclusion is that an elected representative must be a direct link in the tax collection chain.

Accountability with regard to money is essential for any level of trust in monetary affairs to exist. Responsibility for expenditure is essential to avoid careless waste. The direct involvement of representatives in the collection and expenditure of their constituents tax dollars is essential for democracy to exist.