As the Ontario government released its budget last week, Lawyers for Fair Taxation issued a press release calling on Finance Minister Dwight Duncan to “Tax us. Ontario is worth it.”
The weekend before, Toronto lawyer Omar Ha-Redeye formed the organization as an offshoot of a group created just prior to that called Doctors for Fair Taxation.
Ha-Redeye has long known the person behind that group, Dr. Michael Rachlis, a health policy expert at the University of Toronto and long a defender of Canada’s public health-care system.
The physicians and lawyers involved have one overall objective: to have richer Canadians — a group they freely admit they are a part of — pay a greater share of their income in taxes, especially at a time when governments are running huge deficits and social services are fraying.
Ha-Redeye says the fact that doctors took the lead shows the relative lack of social consciousness among the legal profession compared to its health-care counterparts.
“It really does emphasize the fact the legal profession, unfortunately — how do I put this politely — we have our heads maybe buried in our books far too often.”
The groups — and apparently one forming among engineering professionals — have laid out a proposal for raising taxes on the top 10 per cent of income earners who make more than $100,000.
For example, for the portion of income over $100,000, they say there should be a surcharge of one per cent; for the amount over $170,000, they’re calling for a two-per-cent surcharge.
Income above $640,000 should have a three-per-cent surcharge, according to the two groups. And for the very rich making more than $1.8 million, they believe the surcharge should be six per cent.
In dollar terms, someone making $130,000 would pay just $200 more in tax.
As the legal profession, in Ha-Redeye’s view, has “such a negative reputation” for being wealthy, insular, and self-interested, he says it needs “to be more visible as lawyers in terms of saying we will make sacrifices for the sake of the greater society.”
The group points to a recent submission by the Canada Revenue Agency to the 2011 Judicial Compensation and Benefits Commission showing the highest-paid self-employed lawyer in Canada earned more than $8 million in 2010.
Ha-Redeye notes many lawyers are seeing the effects of underfunded social programs, such as an increase in crime. “They affect homicide rates, they affect social turmoil generally, and yes, those have trickle-down effects all over the legal system.”
Lawyers for Fair Taxation says governments lost $100 billion in revenue between 2000 and 2010 because of tax cuts that have “overwhelmingly gone” to the wealthiest in society.
In the 1960s, it notes, the top marginal rate was 80 per cent for those making more than $400,000. By contrast, today’s “richest Ontarians pay only 46 per cent on their income above $132,000,” the group points out.
Ha-Redeye agrees with critics who say governments could do a better job of spending tax money more efficiently. “I think they go hand in hand,” he says.
But Derek Fildebrandt, national research director for the Canadian Taxpayers Federation, says if groups like Ha-Redeye’s want to pay more tax, there’s an easy solution short of legislating increases.
“Every year at tax time, you can donate to the government to pay down the debt,” he says, suggesting that members of the groups “all voluntarily start giving more of their money.”
Fildebrandt says tax hikes are a disincentive to productivity. “How many people are going to want to become lawyers or doctors if financial benefits are even further diminished?” he asks. “I think a lot of these guys just don’t understand the concept of incentives.”
Fildebrandt argues a better way of dealing with tax inequities would be by closing loopholes. That means, he says, “closing the exemptions and credits that are mostly politically motivated.” Raising tax rates, he says, would simply cause people to look for ways to avoid paying.
Former Ontario Bar Association president James Morton says that when he discovered Lawyers for Fair Taxation’s web site, he readily signed the group’s petition calling for hikes in taxes.
But Morton disagrees with the stereotype that lawyers care little about society in general.
“I think you’d find fairly strong support among a lot of lawyers for fair taxes, taxes that recognize the value of a well-ordered and properly funded society with the necessary infrastructure.”
He believes this notion crosses the spectrum of law — from criminal to corporate — because of lawyers’ innate desire to see justice “as an abstract thing.”
“And that’s not something that goes away even as you become older and cynical,” he says.
Morton notes this idea also manifests itself in practice.
He says that while there may be a more recent push for large firms to have their lawyers do pro bono work, it has been “almost mandatory” at smaller firms for years.