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The Progressive Economics Forum

Let’s Make Taxes Voluntary, too!

Further to my recent post on the Ontario PC party’s proposal for right-to-work laws in that province, here is a slightly longer version of my column in today’s Globe and Mail:

            Caught in a punishing recession that just won’t end, many Americans must think they’ve been transported back to the 1930s.  Meanwhile, U.S. labour laws are heading even further back in time.  Emboldened Republicans in several states are trying to dismantle the last remaining features of New Deal labour law (as codified in the 1935 Wagner Act).

            In the public sector, this crusade includes measures (like those in Wisconsin) that in essence ban unions and collective bargaining altogether.  In the private sector, the favoured tool is the so-called “right-to-work” law.  Pioneered by southern Dixiecrats who always hated the New Deal, these laws ban the union security and dues collection provisions that constitute the core of North American “majority unionism.”  Workers make a majority decision (by signing cards or voting in an election) to form a union.  The union is required to bargain on behalf of everyone in the bargaining unit.  But without the power to collect dues, clearly the union cannot survive.  Unions are thus effectively prohibited; indeed, in right-to-work states, private-sector unionism is virtually non-existent.

            Fuelled by economic desperation and beggar-thy-neighbour competition for investment, the practice has been creeping north – reaching Indiana earlier this year.  In fact, just a day after Indiana enacted the law, Caterpillar closed its locomotive plant in London, Ont., shifting some production to that state.  (Right-to-work wasn’t the only lure: huge subsidies and Buy America rules also helped.)

            It was inevitable this back-to-the-future trend in U.S. labour law would spill over into Canada.  Three provincial political parties have already proposed U.S.-style right-to-work laws for Canada.  Alberta’s Wildrose Alliance and the Saskatchewan Party led the way.  Last week Ontario’s Progressive Conservatives jumped on the bandwagon, with leader Tim Hudak now endorsing right-to-work laws for that province.

            For this agenda to be taken on by Conservatives in Canada’s industrial heartland is a remarkable (and, for unionists, worrisome) development.  This is, after all, the party of Bill Davis, who actively promoted unions as a tool to reduce inequality and enhance the well-being of common folk.  In contrast, Hudak’s policy paper blames labour laws (not corporate greed or flawed foreign investment rules) for the debacle in London, implicitly endorsing Caterpillar’s position that Canadians must cut their wages in half or face even more job losses.

            Hudak’s paper rails against the “forced paycheque contributions” required under the famous Rand Formula.  Invented by Supreme Court Justice Ivan Rand in 1946, it’s a compromise between the need for stable labour relations and individual objections to union membership.  An individual doesn’t have to join a union.  But they can’t free ride on the unions’ services, either.  If they object to joining the union that represents them, they must pay an equivalent amount (for example, to a charity).  The law is democratic (remember, no union exists without majority bargaining unit support) and has stabilized workplace relations (which were far more volatile before Rand).  But new-right conservatives, backed by some employers, now yearn for a world without unions altogether.  And this is how they plan to achieve it.

            But why stop with union dues?  Exactly the same logic applies to every other “forced paycheque contribution”: like payroll deductions and income taxes.  Yes, those taxes are set by elected governments (just like unions only exist with majority support).  But surely individuals should be allowed to “opt out” – even if they still enjoy the services taxes pay for.  Let’s make every tax voluntary, and see what happens.

            Of course, public services as we know them would collapse entirely.  And that is exactly what Tim Hudak and his allies want to happen to unions.

Enjoy and share:

Comments

Comment from Peter Severinson
Time: July 4, 2012, 9:03 am

Just curious, what is the union coverage in US states that have longstanding right-to-work rules?

Comment from Dan Tan
Time: July 4, 2012, 3:29 pm

Jim,

Hudak is attacking on two separate fronts: the philosophical & the practical. I’d like to judge your article on its ability to confront these two attacks.

On the philosophical front, he’s telling people that unions are not democratic. He knows people are either ignorant or disinterested in the topic, so he’s free to manipulate them like children.

While your response was a bit scatter-shot in presentation, you still offered many points to counter that argument. Of course, I would rather you fight baby on his terms: http://www.progressive-economics.ca/2012/06/29/unions-and-democracy/

On the practical front, he’s telling people that we can’t “beat them” so we should “join them”. He’s presenting his policies as the only solution to “beggar-thy-neighbour competition”.

Your response to this was almost non-existent. You had an entire paragraph recalling the Caterpillar example, but only one line hinting at a possible solution (“corporate greed…flawed foreign investment rules”). Hence, my previous suggestion that progressives respond with a clear “economic growth strategy”:
http://www.progressive-economics.ca/2012/06/28/u-s-right-to-work-thinking-now-infecting-canada/

IMO, people walked away from your article thinking: “You’re right Jim, it’s sad. But Hudak’s just doing what has to be done.”

In the future, they should walk away from your article thinking: “You’re right Jim, there IS another way. Hudak’s just trying to turn Ontario into the Hunger Games.”

Comment from cnp
Time: July 10, 2012, 4:37 am

Paying union dues and paying taxes are two totally different subjects all together and claiming your going to withhold tax money based on governmental policies towards unions is immature and childish. Like it or not unions have become too politically involved and often times that political involvement forces policies from our elected government that dont really reflect the opinions of the majority concencus. When any union forms itself an actual political party and tests its policy ideas in an open and democratic election, then goes on to win the needed votes then theyll be allowed to dictate governmental policy in this country. Til then they have to do like all the rest of us. Work within the system to better promote their causes and so far the CAW has done an excellent job of securing its members lots of government subsidies at their places of employment but all those government subsidies have resulted in net employment losses for the CAW and that has nothing to do with governmental policies but instead has more to do with CAW policies at those workplaces. Want to change governmental policy? Get elected!

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