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The Surprising Taxpayer Transcript
SHIRLEY TILLOTSON: My job this afternoon is to shift gears kind of massively, and to give you an example of how I went making a very big and, apparently, impersonal story a personal one.
My big story...the story of my book, 'Give and Take,' is about how tax shaped the history of Canadian democracy, and the instructions that I got from the Canada's History people fit really well with the big idea of my book.
In that book, I wanted to add something that was really missing from the Canadian scholarly literature on tax. I wanted to add stories that showed taxpayers and tax collectors...as...real people, not just abstractions or clichés.
So...it's my view that tax is not boring, but clichés are boring. The predictable ways that we talk about tax are boring: 'Taxes are too high! Government has grown enormous and taxes get higher and higher!' or, on the other hand...you know...'Income tax used to be fairer, the rich paid a higher rate, taxes are the price of civilization,' et cetera, et cetera...
You can all write these clichés. They all have a kernel of truth...but re-hashing the same old political stories is boring, and by contrast, the actual lived history of real people paying tax, or trying to get others to pay their taxes, is not.
And, that's why I was really drawn to history in general, that feeling that, you know…'Oh, things must have happened this way,' and then when you get into the archives you find out...'No, they happened differently.'
And, in income tax, in particular, there was a very odd little story about...how...from a 19th century tax commission about how income tax was seen as, compared to other taxes, almost voluntary...imagine.
We're not seeing voluntary income tax paying here in the cartoon by Bob Chambers. We're seeing a 'little man' being turned into revenue by the Finance Minister from 1969, Edgar Benson.
But...there is a kernel of truth in what income tax scholars today say is the quasi-voluntary nature of income tax in particular...and that is, if...citizens are not, to some degree, some substantial degree, willing to pay their taxes voluntarily, the cost of collections rises and rises and cuts into the revenue. And, of course, as we know...bad taxes can cost votes if citizens don't think that the tax deal is fair.
So...with those thoughts in mind, I went about looking at how people have been persuaded, or compelled, in ways that change over time, to pay their taxes. And, for the history of democracy, that's an important story.
It gets at the kinds of power and responsibilities that citizens have in a democracy, and it's a really interesting story because it's about conflict, it's about negotiation, it has a real 'cops and robbers' quality to it sometimes.
So, I'm just going to give you two small examples today of small stories that I used to develop the big stories. Read the book...there are more. [LAUGHTER]
So, the first one is about something called 'conscience money.' Very early on in my research, as I was poring over the finding aid of the Department of Finance, I saw a series of files from the 1950s labeled 'conscience money'...interesting.
Well, imagine my joy as a researcher when I found that these were files of letters from people who had gotten away with cheating on their taxes, and then had been stricken with an attack of conscience, and wanted now to pay up. [LAUGHTER]
The money they sent in was called 'conscience money,' and it was regularly receipted in the newspapers...here you see a little clipping, and you'll see them scattered throughout newspapers in the interwar years period in particular, showing a collector of customs's duties, acknowledging that he had received two dollars in 'conscience money.'
Now, usually, and you can imagine why, the ‘conscience money' payers sent in their money anonymously...but sometimes there was a bit of a story along with the money.
Just [to] give you three quick ones...one woman sent in a hundred and ten dollars in back income tax that her husband owed. He didn't think he owed it...she thought he did. [LAUGHTER]
Someone else sent in four hundred and twenty dollars in cash. He wrote that the government had been, quote, 'very good to him,' and that's why he was paying up. [LAUGHTER] I hope it was in a general way and not particularly...
And, finally, another man...and this gets to my more serious point here...another man paid up because he was following step 9 in a 12-step program. He was making amends. [LAUGHTER] He wrote, 'You can credit this to a change of heart caused by the grace of God and the fellowship of Alcoholics Anonymous.'
And, this letter actually hints at something bigger: the role of religion in tax culture. Religion helps connect a civic duty, like tax, to the sense of personal morality, and that's a help to the tax collector.
A great example of how this worked in the '30s was the impact of something called the Oxford Group, a Christian revivalist movement that emphasized personal moral stock-taking...and actually Bill Wilson, the founder of Alcoholics Anonymous, was also influenced by the Oxford Group, so...connection.
Its representatives came to Canada on a speaking tour in 1932 and 1934, and in their wake, the 'conscience money' flowed in.
You can see here, the Department of National Revenue loved to report on payments of ‘conscience money.' Here's one that references the Oxford Group...thirty dollars...'For the enclosed thank Heaven and the Oxford Group.'
So, what does this say about democracy? Well, as I said, taxation is democratic to the extent that there's a substantial measure of real consent. That consent comes from a variety of places...again, read the book. The story of 'conscience money’ payers shows us that one of those places has, at times, genuinely been personal morality, whether inspired by religion or other sources.
So, my second story is about someone who didn't want to pay her taxes: Annie Garrow. And, her reason for not wanting to pay her taxes was, in my view, a good one, and it was certainly a principled one. It wasn't just, 'I don't feel like paying my taxes.'
It's about a court case that she fought in the 1930s that hinged on 18th century treaty rights and the work of keeping alive the meaning of those treaties...and that, too, is part of democracy.
Now, I know Annie Garrow's story only through archival documents...and court legal documents, and I hope, one day, to talk to someone from her community, Akwesasne, about what the memory is of this...of this episode.
But, in the documents, what I saw was really a brave woman who...who reasonably believed that she should not have to pay import duties to the U.S. government.
Now, as you can see on the map...maybe, vaguely...shows the Akwesasne reserve in Canada, and I've circled the American...reservation on the other side, and the 'x' marks a town called Hogansburg at the edge of the American reservation.
In Mrs. Garrow's day...[In] Mrs. Garrow's day in the 1930s, women from the Canadian side, from the Kanienkehake community, the Mohawk community...used to take baskets, as shown here, or beadwork that they'd made to Hogansburg to sell, to make money, and they would do personal household shopping there as well.
And, both coming and going, they faced a customs port. [The] Canadian customs collector was in the habit, always, of letting them bring in household personal goods without charging duties, but taking goods into the United States, for sale, was another matter.
Now...this is a story of bureaucratic madness. Since 1897...so probably around about when Mrs. Garrow was born...since about 1897, American customs agents had been requiring Mohawk people entering the U.S. with goods for sale, like Mrs. Garrow's baskets, to pay import duties.
But, that tax was new in 1897. Previously, for about a hundred years, since the treaty, United States customs law, black-letter law, had affirmed the Indigenous trading rights guaranteed by the Jay Treaty of 1794.
In 1897, the United States customs law was changed, and since then, representatives from Akwesasne and other First Nations had been asking Canada to ask the United States to go back to respecting their Jay Treaty rights.
It was to support that cause that Annie Garrow stepped up to the Akwesasne customs station, carrying two dozen baskets that she was planning to sell in Hogansburg in December 1934. She knew she'd be asked to pay customs duty on them, and she was ready to do so...it was a dollar.
She paid it, but she paid it 'under protest,' because it was her plan to take the American government to court to get back that dollar on the grounds of the Jay Treaty rights.
So, she did that...1936...and...she won. Surprising? I was a little surprised.
The Canadian tax authorities were...The American tax authorities were clearly quite surprised, and, I'm sorry to say that in the following year in 1937, the judgement of a higher court in the United States reversed the initial decision...but for a few happy months, Mrs. Garrow got to savour victory in a very long-fought battle over the Jay Treaty rights, one that continues around immigration...or...continued around immigration, rather.
[The] story of the customs border around Akwesasne doesn't end there, but I will end the story here, mindful of time, and just say by way of closing...
Several tax books...in my book, no one is always right, not the taxpayers, not the politicians, not public officials. They fight, often for good reasons, because fair taxation requires taking into account lots of differing viewpoints...something historians are good at.
Democracy requires fair processes for handling the kinds of conflict that tax arouses, and, I would say, in those processes, sometimes surprising things happen because...human beings are involved. Thank you.