Shirley Tillotson of the history department at Dalhousie University, has posted "Warfare State, Welfare State, and the Selling of the Personal Income Tax, 1942-1945" on SSRN. The article also appears in Canadian Tax Journal/Revue Fiscale Canadienne ( vol. 63, 1)
This article examines lower-income Canadians' protests around the personal income tax aspects of Canadian war finance during the Second World War. It describes criticisms of the 1942 amendments to the Income War Tax Act and the means by which lower-income Canadians registered their concerns, through absenteeism, labour organization, and participation in public debate, drawing on their resources as voters (through political parties) and as prospective contributors to war savings campaigns. The finance minister and others took these protests seriously as a threat to war finance and the stabilization program. Consequently, the Department of Finance and the Department of National Revenue, together with the Wartime Information Board, responded vigorously to the protests, through various public relations campaigns and through a series of amendments to the tax statute. These responses to tax protest contributed to the process, normally seen as driven by either macroeconomics or social security ideology, or both, that led to Canada's Family Allowance Act, a landmark in the evolution of the Canadian welfare state. By pointing to the influence of tax protest by smaller income tax payers on the decision to expand the welfare state, the story told here shows how the communitarian public opinion of the war years was also shaped in part by self-interested pocketbook politics.