Article body

At first blush, Shirley Tillotson’s expansive and impressive Give and Take: The Citizen-Taxpayer and the Rise of Canadian Democracy does not read like a work of business history. And why should it? At the outset, the book states clearly that it is not aimed at the taxes most likely to galvanize business’s ire, particularly “resource rents and (largely) corporate taxes,” but focuses upon income taxes, which affect the broadest swath of Canadians. In doing so, Give and Take makes a compelling and deeply sourced argument about the broader expansion of individual taxpaying across the twentieth century. In particular, Tillotson shows how the advent, expansion, and debates over personal income taxes starting in 1917 helped to build Canadian democracy in manners large and small, explicit and implied, ideological and practical, and that, at times, taxation was even seen as a progressive and noble goal.

But, as we know and have been told ad nauseam for decades, businesses, large and small, and business leaders, have been explicitly and implicitly, and for both ideological and practical reasons, dead set against taxation of pretty much all types — personal income taxes, corporate income taxes, capital gains taxes (especially!), and even, though not always, tariff duties.[45] Yet Tillotson’s methodological approach is, in many ways, the antithesis of how one would seek to examine the views of Big Business (however defined) towards taxes: by concentrating on putting individual, ordinary “human beings into our tax history” and linking the expansion of personal income taxation to the growth of citizenship and democracy, Give and Take necessarily lessens its focus on how individual businesses, business organizations and lobby groups, and their leadership reacted to state efforts to increase taxation, either as a counterpoint to individual taxes or through corporate taxation.[46]

Certainly, in a book as well written and researched as this one, there are copious examples of the opinions of individual business leaders and instances of “the business view” on questions of taxation of all kinds, “from the president of Dominion Steel to the local druggist and many in between.”[47] And instances of these individuals’ and groups’ tax resistance do abound throughout the book, given the impossibility of navigating a half-century of evolving debates over taxation without considering the interests of business and, particularly, given the largely (still) capitalist-friendly Canadian landscape in this period.[48] But, as Tillotson admits, Give and Take is “not primarily about economic policy or high politics or legislative drafting,”[49] or, for that matter, is it about the crisis of confidence sparked by issues such as taxation (and regulation, and welfare state polices, and the proliferation of crown corporations, etc., etc., that business leaders experienced over much of the same Keynesian-dominant time frame that Tillotson’s book covers, from the end of the First World War through to the 1960s.[50] This is not an interest group study that either privileges or diminishes the role of business in the dynamic — not too hot, and not too cold — and Tillotson is absolutely fair in her characterization.

So, while the views of individual business leaders are, actually, in steady supply in Give and Take, the book does not unnecessarily dwell upon broader business leaders’ ideological or practical aversion to taxes as a standard trope. In fact, little of the book’s emphasis is upon stereotypical business leaders or their concerns as an undifferentiated group, which is refreshing, given how “business” is sometimes (often? inevitably?) treated by Canadian historians, where it is usually mostly ignored, or sometimes viewed as caricature, both monolithic and shallow.[51] Instead, Tillotson effectively and thoughtfully balances and explains the differences between philosophical positions on critiques of taxes and tax policy with questions around tax avoidance and evasion, which are not the same.

Moreover, the book does not initially read like a business history because, at its core, it is an example, par excellence, of the “new political history.” By emphasizing the everyday correspondence and conversations of ordinary Canadians in how they thought about, felt about, and dealt with taxation, the book really does bring the focus and locus of social and cultural history to some of the big questions of Canadian political economy. We learn about the state, politics, media, Parliament, regional cultures, federalism, and all sorts of matters in between, and we do so without being overly burdened by a framing that could easily lose sight of the main goal of revealing ordinary people’s voices in this debate. In this light, Give and Take shouldn’t read like a business history of taxation, which would look immeasurably different, and would probably kill any notion of achieving the goal of a “strangely entertaining social history of taxation,” which Tillotson has so successfully accomplished.[52]

Having said all this, it might come as a bit of a surprise to Tillotson to be called, even in passing, a business historian, a label some historians might not take too kindly to. After reading the book, however, the evidence is fairly convincing. And yet, before making the case that Tillotson’s book does indeed grapple with essential aspects of business history, it is worth pointing out that Tillotson is but one in a long list of social and cultural historians who have, in embracing the new political history, or simply writing as social or cultural or even economic historians, also unwittingly embraced their inner business historian. Other past winners of the Canadian Historical Association’s best book prize might not consider themselves primarily business or economic historians either, but their work certainly suggests as much. Of the four winners of the Canadian historical profession’s most prestigious prize immediately prior to Tillotson, Elsbeth Heaman won for her work on taxes (again, the nexus of capitalist/state political economy), Sarah Carter won for women, land, and work on the Prairies (property), Robert Sweeny won for Montréal’s industrialization (could there be a more business-oriented topic?), and Jean Barman won for a study of women in the fur trade (could there be a more Canadian business-oriented topic?).[53] Evidently, we’ve all become business historians, to some degree, and one does not need to write about firms or entrepreneurs or markets to do so.[54]

While Give and Take does not necessarily read like a business history, it certainly contains elements that speak to fundamental aspects of the Canadian history of business, and how business is essential to understanding tax history. Let us enumerate, like any good tax accountant, a few reasons why this book fits the bill. For one, Give and Take, as the short title suggests, is a book about taxing income, wealth, and property; about the giving and taking of material wealth by the state; and the arguments about how this material wealth is given and taken, and who is being asked to give and to take. As professors Brian Gettler and Lisa Pasolli show in their own insightful pieces for this roundtable, these decisions matter deeply for broader questions of race, gender, welfare, and how we as a society collectively conceptualize fairness, our priorities, and ultimately who or what gets to benefit from this redistribution of wealth.

In short, Give and Take is a book about capital, however broadly defined and constituted, and the fights over how to reallocate it. These fights about giving and taking capital, and their impact upon the body politic, is a central contention of the book. Moreover, the underlying conversations about these fights that Tillotson so effectively reveals are ultimately about how the state wrings wealth from a capitalist economic system to support its state goals, be they war-making, war-debt-paying, infrastructure-making, welfare-state-building, or, as Tillotson has so eloquently argued, fairness and democratic values. Canadian taxation is, ultimately — or, at least, according to the rhetoric of politicians — about instilling “fairness” into the Canadian capitalist system, and a very healthy, very happy and very important outcome of this process of redistributing capital is supposed to lead to a healthier, happier, and consequentially more democratic and fairer Canada. Capitalists of all stripes (but especially businesspeople) are, by necessity, very sensitive to the taking and giving of capital, the basis of taxation. Give and Take thus necessarily reveals the tensions, explicit and implicit, between business and taxation, adding an insightful way to think about and to understand the business history of taxation.

Moreover, the book reads very much as a business history because it is a history of the Canadian state and its efforts to encourage economic growth in what it saw as a reasonable manner across half a century of dramatic wars and depressions, booms and busts, development, and sustained growth. These matters almost always kept the interests of businesspeople (again, large and small), Canadian businesses and foreign businesses (through the matter of foreign direct investment), among others, at the top of mind for government tax policymakers, even when the concerns of business were not necessarily explicitly addressed. Take Tillotson’s excellent examination of Canadians’ reluctance to tax capital gains, in contrast to the United States. Such a stance was seen as unnecessary and inimical to Canadian economic development, especially in the capital-hungry 1950s, which depended upon foreign investment to develop a broad range of industries and sectors, from oil to autos. Taxing capital gains (or including capital gains as income and taxing them thusly) threatened that flow of investment monies, which spurred commerce, infrastructure, development, and jobs, and while such a measure was unsurprisingly opposed by business, it was also opposed by Canada’s mainstream parties, too.[55] By not making business the central critic in the debate over capital gains taxes, Tillotson has not only illuminated the issue without falling into easy assumptions about the motives of greedy business leaders as solely being driven by profit motives (nor, for that matter, has she taken an instrumentalist approach to the motives or agency of the state as being simply handmaidens to capital), but she has also made a point about the hard realities of Canada’s still-developing, extraction-heavy, capital-starved, and continentally focused postwar economy.

Give and Take is also business history in that one of its main undercurrents is the role of the United States in shaping Canadian tax policy. Now, as most students of Canadian history know, the United States is the sun around which Canada revolves, in virtually all matters. But why, in this case, does Tillotson focus so extensively on how and why Canadian policymakers paid so much attention to US tax rates and tax policy? Why was it always top of mind? It wasn’t simply a matter of best practices, or because the United States was geographically or in its model of governance and federalism “closest” to Canada. It was also because having a different taxation regime was important in keeping Canadians, especially working and productive Canadians, and their capital, in Canada. Throughout the book, taxation is not just about building a better democracy by expanding revenue tools for Canadian policymakers. It is also about the inevitable cross-border comparisons as a measure of Canadians’ ability to forge an economically viable alternative to the United States so that, on the one hand, Canadians wouldn’t abandon the country, and, on the other, it might also attract US capital. Though one might regard this analysis as a thoroughly cynical and twenty-first-century approach to avoiding brain drains, keeping corporate interests sated, and keeping Canadians economically happy in the continentally determined manner to which they have grown accustomed, it is a time-honoured tradition, one that reaches back well into the twentieth and nineteenth centuries. Stephen Harper, who once gave a speech at a Tim Horton’s in 2009 to declare that his decision to lower Canada’s corporate income tax rate to below that of the Americans had led to the repatriation of Tim Horton’s headquarters from the United States to Canada, would be proud.

Of course, Tillotson’s book ends in 1971, long before Stephen Harper began to dream his dreams of reduced corporate taxation rates, which is not a coincidence. The period under Tillotson’s gaze was, indeed, an extraordinarily prosperous one and — relatively speaking — a taxation-heavy paradise that decidedly did expand democracy, along with the middle class. Eventually, starting in the 1960s, and accelerating in the 1970s, business and Big Business in Canada struck back against taxes of all kinds. As Tillotson notes, “in time, benefit [the welfare state] would become primarily an anti-tax argument, brandished by those wishing to slough off responsibility for services that they themselves did not use.”[56] By then, neoliberalism and its concomitant assault upon taxes and so much of society had begun its long, loud march. In the 1970s and 1980s, taxation became a bête noire of businesspeople, and anti-tax “populism” was coopted by Big Business and political leaders from Preston Manning to Mike Harris. By the 1990s and 2000s, politicians were regularly making statements such as “read my lips, no new taxes,” or they were “signing” “Taxpayer Protection Pledges” forced upon them by organizations such as the Canadian Taxpayers Federation (founded in 1990), or other such nonsense (see, for example, Dalton McGuinty’s 2003 undignified campaign prostration before the CTF in that regard, when he pledged no new taxes if elected premier, then was sued by the CTF for raising taxes[57]).

Which brings us back to democracy. By shifting what is seen as the main role of taxes from war-paying to wartime-debt paying to social welfare program-supporting, Canadians and their taxation policymakers have inadvertently also shifted the target of tax hatred, too, as Tillotson teaches us so effectively. Now, this does not in any way forgive the mindless anti-tax rhetoric of neoliberalism, which is often completely untethered from the practical realities of funding, organizing, underpinning, and actually running a modern, complex society such as Canada’s, including providing the very basis for a functioning form of capitalism, which is perhaps the greatest beneficiary of modern tax policy. (Think, for a moment, of the range of tax “breaks” for business, small and large, and the “self-employed,” versus those for wage-paying employees, who constitute the bulk of Canadian citizens and workers.) But that does not stop the anti-taxers from not knowing what’s good for them. In this sense, as taxes came to be defined as the quintessential “price of civilization” (or any other such cliché, which are actually accurate in this case), taxation, and especially personal taxation, came to be connected not with democracy, but with social welfare programs; taxes were seen not as the price of citizenship, but for some as being a penalty on freedom, a form of tyranny. Under neoliberalism, taxes and democracy, as understood by the modern anti-tax movement, are effectively incompatible. Herein lies the problem, and it would be fantastic if Professor Tillotson, or someone with the same insight and alacrity, could turn their attention to looking at this next stage of the taxation story. After all, as Tillotson has so eloquently shown us, taxation really is the story of not just democracy or capitalism, but the very basis of society as we understand it.