How tax attitudes change over time and around the world

If they happen to be from Saudi Arabia, there is a good chance new arrivals to Canada will be surprised by: a) the nightmarish winters, b) that any non-starving biped would willingly eat poutine and, perhaps most of all, c) income tax.

They don't have income tax in Saudi Arabia or in Qatar, the United Arab Emirates, Kuwait, Bahrain or Brunei Darussalam. No need, since the streets are paved with petrodollars.

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So, the concept comes as "more than a bit of shock" to any well-heeled ex-patriates, says Abraham Iqbal, who lectures on management and accounting at the Mississauga campus of the University of Toronto.

"When they come to Canada and are taxed on their worldwide income that's something completely different for them," he said.

True, almost nobody likes tax. If you're a politician, just try saying the word out loud without immediately adding "cuts" and see how well you do at the polls.

Unless, that is, you happen to be running for office in France, a countryknown for both itshigh individual tax rateand "tax morale" the phraseeconomists use for the general level of willingness among taxpayers to play by the rules.

High taxes, high tolerance

The French have one of the largest tax burdens in the entire eurozone (the top marginal rate was 45 per cent in 2013, compared to an EU average of 37.8)and in 2012 cheerfully elected the Socialist President Franois Hollande on a promise of notching it up even higher at least for those at thehigher end of the income spectrum.

We appreciate that taxes help put out our fires, keep our schools clean and safe.- Abraham Iqbal, lecturer, University of Toronto

Last year, Hollande'sgovernment succeeded in gaining approval for the so-calledmillionaire's tax that Hollande had championed in the election campaign.The new tax willapply to companies not individuals as originally planned and amounts to a 50 per cent levy on any salary amounts aboveone million euros, or about $1.4 million, a year. When taken together with companies' social benefit contributions, the total tax rate will be about 75 per cent.

Had it been applied to individuals as originally intended, the 75 per cent taxwould have outdone even the famously tax-happy Swedes, who pay close to 60 per cent in personal income taxes to fund their cradle-to-grave social programs, one of the highest tax rates in the world.

France's "fast trains, first-rate hospitals and publiccrches(daycares) do not come for nothing," noted a 2013 piece in the Economist. The French, the weekly magazine said, are "the first to defend a way of lifesubsidisedby the public purse that can often only be bought privately in Britain or America."

Programs like those help make taxes more palatable in Canada, too.

In contrast to Americans and taxpayers in some other parts of the world, Canadians are "generallymore awareof where tax dollars are going,"says Iqbal.

"We appreciate that taxes help put out our fires, keep our schools clean and safe, keep our streets safe, keep our level of social standing where it is, and our health care."

Other factors also cast the taxman in a rosier light. According to a 2013 report from the Organization for Economic Co-operation and Development, tax morale tends to be higher among women, the educated, the religious, older people and full-time employees, who are more likely to have tax taken straight from theirpaycheques.

Trust in and satisfaction with the principles ofdemocracy, with the government in general, and specifically with anyhealth and education services it provides also help build up people's tolerance for the taxman.

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Real or perceived inequality and government corruption will drag tax morale down.

"When people see the government taking steps to lessen the gap [between rich and poor], it puts more trust in the government and people are more open to paying taxes," said Iqbal.

Unless one happens to be rich, that is. ActorGrardDepardieuleft France in a huffoverHollande'splans to redistribute the wealth and, ironically, found greener and less-socialist pastures in Russia.

Changes in Canada

Canadians are often thought to be more tolerant of taxes than Americans, but it wasn't always so.

Low taxes were a point of pride amongpre-ConfederationCanadians, says MarkMilke, a senior fellow at the Fraser Institute and author ofTax Me I'm Canadian.

Some argued againstjoining Confederationbecause the new nation would take too big of a cut out of their income.

George Beer, a P.E.I. politician at the time, once complained that a united Canada would, "graciously allow us to expend about one half of our earningsbut will exact from us the other half, to be expended a thousand miles away."

Early Canadianssaw themselves as "more free" than Americansin part because of their lowertaxes, saysMilke.

"There were arguments, in early Confederation debates, about making sure taxes did not exceed the levels of the U.S, because of the necessity to attract and retain immigrants," he said.

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That line of thinking persisted into the1950sand60swhen post-war confidence over-confidence inMilke'sview saw governments on both sides of the border take on new and more challenging problems,raising taxes to help pay for these efforts.

"People believed that governments could organize to do just about anything," saysMilke.

In Canada, universal health care was established. In the U.S., governments declared war on poverty.

It helped establish the notion, among Canadians, "that taxes equal compassion," saysMilke.

"And who doesn't like to think of themselves as compassionate?"