Published in Liberty Free Press, May 15, 2000. Reproduced in Laissez-Faire City Times, May 29, 2000.
In filing their federal income tax reports this year, many taxpayers will have noticed that the former Revenue Canada (the Newspeak name of the old Department of National Revenue) has been replaced by the “Canada Customs and Revenue Agency (CCRA).”
Many will have noticed the new bureaucratic creature for the first time. For most people have not read the 22,000-word Canada Customs and Revenue Agency Act which received royal assent on April 29, 1999. In this as in other political matters, most individuals remain “rationally ignorant,” as economists say. Why spend a few hours (or a few days if you are not a tax specialist) reading that bill, or understanding the 150-page Customs Act, when the chance that you can change something you don’t like is virtually zero?
Ignorance of the law is no excuse, but who has read the mother of all undreadable laws, namely the Income Tax Act? Merely finding this law is no simple matter. To explain why it is not available on its Web site (at http://canada.justice.gc.ca/loireg/notindb_en.html), the Department of Justice says that this act “is not maintained by our Department; as such, we do not have access to a copy that we can include.”
What is CCRA, besides an organization with 44,000 employees and an annual budget of $2.8 billion? The new agency describes its mission as “to promote compliance with Canada’s tax, trade, and border legislation and regulations through education, quality service, and responsible enforcement, thereby contributing to the economic and social well-being of Canadians.” Broad mission, especially if they really mean “education,” i.e., propaganda, instead of simply information. And what is the theory behind the “thereby”? How do they contribute to our economic well-being? What in heavens is “social well-being”?
The official justification for replacing the former department by a semi-independent agency is to make “government work better,” to “improve performance,” to offer “more convenient service,” to be “less bureaucratic, more efficient, and more transparent,” to “[increase] points of contact,” to find “more innovative ways to deliver taxation” (www.ccra-adrc.gc.ca). Read between the lines: the objective is to increase “points of contact” with people who would rather have no contact with them, and who would have a pizza, rather than taxation, delivered.
Joseph Proud’hon, the 19th-century left-leaning political theorist, believed that “in a normal state of affairs, the amount of taxes should probably be one twentieth of the national product, and could be lowered to one thirtieth.” Adam Smith, the famous 18th-century economist, wrote that “the raising of a very exorbitant tax, as the raising as much in peace as in war, of the half or even the fifth of the wealth of the nation, would, as well as any gross abuse of power, justify resistance in the people.” Today, in Canada, the state (all levels of government) seizes nearly half of what people produce and earn.
Whatever intellectual argument can be made against, or in favour of, the actual level of taxes in Canada, a large number of individuals have revealed their actual preferences by retreating in the underground economy, and engaging in tax evasion or even overt tax resistance. As state regulation of private, non-politically-correct behaviour spreads, there is also a growing minority of individuals who would agree with Benjamin Constant, the 19th-century novelist and political theorist: “The people is not only miserable because they pay more taxes that they can afford, but also because of what their taxes are used for.”
The Public Choice economic school offers powerful economic arguments in favour of tax evasion, which provides a built-in restraint against the growth of state power. For the same reason, one would expect the state to try and increase the tax collectors’ efficiency and powers.
Now, it is likely that a semi-independent agency, one step removed from political pressure and sweating people, can wield more power to fight tax resistance. This may be why the American IRS (Internal Revenue Service) has been able to muster so much surveillance power and strong-arm tactics, and has long been viewed with envy by Canada’s tax bureaucrats. Canadians are, once again, following the American trail towards what Alexis de Tocqueville so aptly called “administrative tyranny.”
Not only can the federal tax collectors look forward to more destructive efficiency, but their new agency brings the old Customs Department under the same umbrella. Did we also need more efficient customs cops? CCRA claims that “it provides a full range of services at Canada's international borders.” Of course, borders would be impossible to cross without customs’ helpful hand…
Customs have no economic justifications. For three centuries, economists from Jean-Baptiste Say to Adam Smith or John Stuart Mill have shown that protectionism is destructive of the protected region’s prosperity. In our time, customs are even more dangerous than the classical economists envisioned, as customs officers have become cops for the enforcement of a growing number of questionable and invasive laws.
The luggage-sniffing dog, which is featured on CCRA’s Web site, is the customs symbol par excellence. (We might still salute their P.R. skills in showing their dog sniffing a big, bad truck, instead of an old lady’s bag.) The state has found more and more excuses for searching its subjects’ luggage, both literally and figuratively. These excuses include pornography and other kinds of prohibited literature, drugs and, more recently, firearms. Most of what customs does is participating in the repression of either victimless crimes or of smuggling crimes that have been created ex nihilo by state prohibitions.
How can we turn Canadian customs agents into legalistic, powerful, self-righteous, American-type, customs cops? There is no magic recipe, but making them part of a wide-scope taxing agency should help. We may grant that the Canadian customs cops are still more tactful and less intrusive than their counterparts in many other countries, but CCRA will help this change. In turn, CCRA’s very efficiency will encourage the state to control us more tightly.
When bureaucrats and politicians say they want government to be “more efficient,” they seldom mean “more efficient for reducing state control and intrusion.” And don’t be fooled by their business rhetoric: when CCRA talks about us as “clients,” it does not mean that we can choose not to stop at their shop, or refuse to have our luggage sniffed by their dogs. We did not need an IRS-type tax agency to make matters worse.