According to a recent report from the Organisation for Economic Co-operation and Development (OECD), tax revenue for all levels in government in Canada last year amounted to 33 per cent of the country's gross domestic product (GDP).

That's an improvement from the start of the decade when governments consumed 36 per cent of GDP, but it still leaves us overtaxed by a wide margin when compared to Americans and Mexicans.

Government revenue in the United States represent 25.4 per cent of GDP and in Mexico it stands at 18.5 per cent of the economy.

The OECD provides a big-picture perspective on taxation, but that's only one way of looking at the issue. Here's another. Most Canadians forfeit 30 to 35 per cent of their income at source through various payroll taxes and levies.



Therefore, as consumers, we're operating with 65- to 70-cent dollars. Yet, almost every time we make a purchase, we're paying more tax out of dollars already eroded by taxation.

We're taxed at a rate of about 40 per cent every time we buy gasoline at a service station. We're paying 60- to 70-per-cent tax when we pick up a bottle of wine or a case of beer. Canadians outside Alberta pay double-digit sales and GST taxes, ranging from 13 per cent to 17 per cent, almost every time they stand in front of a cash register.

Taxation is not an issue that keeps many people awake at night, but occasionally our political parties give us cause to contemplate the tax burden in this country.

This is one of those occasions. In the runup to the next federal election, the Liberals and Conservatives are attempting to position themselves as tax cutters.

But it must be said that both parties are merely offering political spin rather than the substantive relief that Canadians deserve.

During the summer, Conservative Leader Stephen Harper went to Toronto, took a ride on a streetcar and then unveiled a plan to provide tax credits to people who use public transit. This measure was designed to appeal to downtown voters and those who believe that mass transit is the solution to congested streets and polluted air.

Since then, gasoline prices have jumped sharply. Motorists are looking for relief and the Tories are trying to appease them.

They have demanded that the government lower gas taxes - a measure that would keep drivers in their cars and would do nothing to ease congestion or reduce air pollution. Events have forced the Conservatives to advocate contradictory positions and have shown that they are merely chasing votes rather than thinking seriously about government and the needs of the citizenry.

The same can be said for the Liberals.

Late last month, they announced plans to introduce a Surplus Allocation Act stipulating that federal surpluses be divided equally between new spending, debt reduction and taxpayer rebates.

Few would argue with debt reduction. But surely we don't need more spending from a government that jacked up program expenditures by 15 per cent in the last budget. And surely it would be quicker and more efficient simply to cut taxes rather than calculating rebates and mailing out cheques to some 15 million taxpayers.

Unfortunately, the Liberals are preoccupied with the optics of big surpluses and the perception that they are taking too much.

They have no intention of changing direction and returning Ottawa to the sound principles of an earlier age.

For roughly 100 years, from the birth of the nation until the centennial in 1967, the object of every federal minister of finance was to balance the yearly budget.

These men were drawn from a make-do, pay-as-you-go populace that had a rightful fear of debt and a healthy respect for fiscal prudence.

With the exception of those years when the nation was at war and those when it was mired in the Great Depression, our ministers of finance routinely produced small surpluses or deficits that tended to cancel each other over a period of years.

These men and the prime ministers whom they served recognized that government was just one player and had to behave responsibly like everyone else.

For the past four decades, however, our prime ministers and their ministers of finance have spurned the practices and wisdom of their predecessors.

Pierre Trudeau and then Brian Mulroney ran exorbitant and appalling deficits. Their successors, Jean Chretien and Paul Martin, have replaced monstrous deficits with unjustifiably large surpluses.

And nobody on the federal scene appears to have the slightest interest in balanced budgets even in an age when, by almost any measure, Canadians are overtaxed.

(D'Arcy Jenish can be reached at jenish@businessedge.ca)