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PermanentTaxOnEverything: A little perspective


 

It’s actually a lot of fun watching everyone get excited, both admirers and detractors, about a policy idea in Ottawa. But this might be a good time for everyone to remind themselves that Dion’s PermanentTaxOnEverything™ is a suggestion for allocating $15 billion, four years out.

The government of Canada plans to spend $200 billion this year.

So (a) If this is the apocalypse, it doesn’t take much to have an apocalypse these days; (b) The same message goes out to everyone saying this plan is the equivalent of a federal budget, or a replacement for the old Red Books. Um, no, it just isn’t; (c) This means that if he wanted to, Stéphane Dion could have three or four more days like yesterday  before an election. He just needs to find some other issues on which his ideas are markedly different from the government’s, and on which the virtues of early exposition would outweigh the advantages of pre-writ secrecy.

Because the amazing thing is not that the Leader of the Opposition managed to set the agenda this week. The amazing thing is that we ever got to the point where it would be considered a novelty when the Leader of the Opposition managed to set the agenda. Folks: that’s what leaders of large political parties with a long history of governing the country are supposed to do, and more than once.


 

PermanentTaxOnEverything: A little perspective

  1. Fair enough: $15 B on a $200 B budget.

    $15 B is triple the $5 B (or thereabouts) GST cut that the Liberals say “blew apart the fiscal framework” or words to that effect. So if a $5 B cut blows the budget, then I think that by their own standards, $15 B is a massive tax hike.

  2. Joan – it coincided with the largest budget ever enacted by a Canadian federal government supported by the GST cuts.

    It increased the fat while reducing the feed

  3. Does Dion’s plan say what happens if his plan is successful at modifying behaviour? If we vastly reduce the amount of carbon we use, where does he get the money to fund his tax-cuts/rebates/whatever Coyne thinks they are or are not know. The question is important, because the whole point of this thing is to reduce carbon usage. If it is not, then what is the point?

    Also, did I miss why this is essentially not reverting to the Conservatives proposed intensity based emissions system (under a different name, and with different rules, no doubt, but still it is aimed at reducing intensity, not capping emissions), as opposed to a complete cap that the Liberals insisted we needed?

  4. “We need to profoundly revise all of our taxes… to tax pollution more, including fossil fuels, and to tax labour less.”

    – French President Nicolas Sarkozy

  5. Fat? Then I guess Dion could have funded his non-environment-related tax credits by cutting “fat” instead of his carbon tax. I wonder why he didn’t?

  6. It is refreshing to have several days where the news cycle is not dominated by Julie C or Chuck Cadman. Ah… substance…just don’t expect this to last long.

  7. I agree completely Brian : rather than all the usual pseudo-scandals and liberal fear and shmear tactics, it is very refreshing for Dion to actually try something anything to change the channel and propose an idea and I give him major cudos for this. Even if the plan has a carbon molecule in a furnace’s chance of ever getting through to becoming a canadian policy thank god, none the less it is actually fun to rant about something interesting for awhile.

  8. And the more new ideas he put out, the less his reputation is tied to any particular idea.

    It’s interesting the Canadians are actually anxious for new ideas, whether they approve of them or disapprove; whereas our dear leaders seem to presume that any new idea will ipso facto be unpopular.

    I’m 31. There hasn’t been a new idea in Canadian politics since I was old enough to vote. It’s been a complete blank. Hopefully that will now start to change, and frankly at this point I don’t care if the ideas are good or bad. Bring ’em on!

  9. there hasn’t been, because new ideas and new-thinking, has run a bit amok and we spent the last 13 years getting some old ideas implemented properly. that period, by the way, isn’t over.

    new and good are as close in meaning as new and crappy.

  10. With the revenue-neutral checks that are built into the plan (i.e. a legislated requirement that carbon-based tax revenues be equally offset by income and corportate taxes), how is $15B an increase, or a decrease? If behaviour changes and carbon consumption is reduced, presumably fewer revenues would be ‘returned’ through income and corportate tax cuts. And how come everyone isn’t going snaky over the Government’s ‘plan’ to pump half a trillion dollars in the defence budget over the next 20 years? How is that going to be paid for I wonder? We may just need a real ‘tax on everything’ sooner rather than later!

  11. Mr. Wells, you’re a fan of historical comparisons.

    Here’s one:

    Harper – Trudeau.
    Dion – Stanfield.
    2009 – 1974.

  12. Harper- Trudeau?? No, Ben, I’m sorry. No. Indeed, Trudeau had the one thing that everyone thinks HArper lacks– Charisma. That’s probably what truly won the election for him, also. His politics weren’t revolutionary, but he presented them in such a way to make you think they were.

  13. I haven’t had the time to read through the entire proposal, but I was wondering if it takes any consideration of Jeff Rubin’s notion of implementing a carbon tariff as a means of dealing with the growth in carbon emissions from rapidly developing nations, notably China, whose energy sources emit carbon at much higher intensity – because it’s primarily coal. To borrow his phrase “In effect, a carbon tariff is a countervail against unfair energy subsidies that Chinese (and other developing
    world) exporters reap from either their direct carbon emissions or indirect emissions such as those generated from the coal plants that supply them with power.” and this might have some mild supporting effect on our own manufacturing base. See: http://research.cibcwm.com/economic_public/download/smar08.pdf for more details. Anyway – just curious about its ramifications beyond the Dion vs Harper dynamic.

  14. “Fair enough: $15 B on a $200 B budget.

    $15 B is triple the $5 B (or thereabouts) GST cut that the Liberals say “blew apart the fiscal framework” or words to that effect. So if a $5 B cut blows the budget, then I think that by their own standards, $15 B is a massive tax hike.”

    I see Joan, like her mealy-mouthed PM and MPs, has begun to spread her mis-information b.s. campaign, while ignoring things like facts.

    It is revnue neutral Joan. 15 billion in, 15 billion out. You see Joan, that equals zero. Zero is far less than $5B.

    While were at it Joanie, can you explain (under the cover of night if you like) how Peter MacKay and Stephen Harper are finding the money for Gordon O’Connor’s non-lobbyist, $490 Billion dollar military budget? Tell us. We’d all like to know.

  15. “The government of Canada plans to spend $200 billion this year.”

    A problem here is that one cannot measure government influence on the economy by just its direct expenditure.

    Even leaving aside governent’s significant regulatory impact, consider a tax cut targeted to parents of kids in physical fitness programs (not that anyone would actually propose something so narrow). Technically, that’s less money on the government’s books. But economically it functions the same as if the government cut a cheque to those people and called it a handout instead of a tax cut. Either way, you’ve got one group of society being subsidized by the rest.

    The “revenue neutrality” of the GreenShift/PermanentTaxOnEverything is debatable because the tax cuts are targeted. Even if the government’s budget doesn’t change, government’s role in the economy has nonetheless increased.

    On the one hand, economists would like the fact carbon consumption is being taxed instead of capital. But on the other hand, even if truly “revenue neutral” such that 100 cents of a dollar of carbon tax revenue goes to tax cuts, if the cuts are targeted to families with children and low income earners that would be a policy decision motivated by social objectives not productivity considerations.

  16. Hey Sophie:

    “Trudeau had the one thing that everyone thinks HArper lacks- Charisma”

    I wonder if Gloria Steinem agrees with you.

  17. Perhaps I’m regionally blinded, being from Sask, but I’m not sure Sophie understands the relationship the people have with PM Harper. Now obviously I can’t speak for anyone else, but I know in Sask that PM Harper has attained near hero worship.

    It isn’t a mistake that our host (book) and Kinsella (online) have both pointed out the targeted personalities and stereotypes of the CPC, or the resounding success PM Harper had in connecting to those types of people.

    Perhaps that targeted voter doesn’t live in downtown Toronto, Mtl, or Vancouver . . . but they sure as hell seem to be living everywhere else.

    Even something that jolts the Libblogs, screw that, is more real then anything I’ve ever heard from the prof.

    No, I don’t think a Trudeau/Harper comparison is all that far out of touch.

    Course, C-61, oddly enough, goes entirely against the grain.

    Cheers,
    lance

  18. Well, I’m from Northern Québec. Our most recent MP was Bloc, but our previous one for almost twenty years was Liberal, and the current MP won by a very, very small margin. Harper=devil, pretty much.I can’t speak for people in the prairies, in downtown Montréal, or in the maritimes. I can say, however, that given the general disgust with Harper (and Duceppe) that exists in my riding, a Trudeau comparison is not apt (my riding was liberal throughout his entire mandate). The Liberals- whenever they decide to call an election- look set to win my riding, given the general disgust over Harper and Duceppe. I don’t think Stanfield won my riding in 79, and I’m pretty sure Dion is set to win it in 2009. From my perspective, at least, Wayne’s comparison is absurd.

  19. *Ben’s* Sorry.

  20. Sophie, forgive me, but Trudeupeia wasn’t about _every_ riding, it was about popularity. That your riding doesn’t buy PM Harper’s snake-oil is not significant.

    That _most_ ridings do, is. (or rather that most ridings get out the most votes)

    And as I stated originally, I can’t speak for anyone else . . . but NEP is a word not far from the lips of those who frame opinions in the West. I may even be guilty of such with my latest post on SDA.

    Now the Libs have little to lose in the West. One seat in SK, a few in MB, etc. Who else to target for the “losers” Mr. Drummond talked about?

    Regardless of the microscopic influence of the blogs, Dion’s Green Shift can not be allowed to fly. Bad things will result.

    Cheers,
    lance

  21. The Trudeau/Harper – Stanfield/Dion comparison isn’t about personalities, it’s about strategy.

    In 74 Stanfield, instead of making the election about Trudeau’s record, decided to float a controversial policy and turned the election into a referendum on his own leadership.

    Sound familiar?

    Perhaps a more recent and familiar comparison could be Harper/McGuinty – Dion/John Tory.

    In the McGuinty VS Tory election the Libs and PCs were very close in the polls going into the election (as Harper and Dion are) and the leader in power was distrusted by a large number of voters (like Harper) however, Tory proposed a controversial policy and made the election about his plans rather than McGuinty’s record which resulted in him losing big-time.

    What Dion has forgotten is that it is very rare for oppositions to defeat governments in Canada. Usually it is the governments which defeat themselves which is why the focus of the election must be on the government record, not on the opposition proposals.

  22. Fair enough, but there’s approximately 62 squijillion counter-examples of opposition leaders who used policy credibility to get elected. McGuinty himself, who had an empty cupboard in 1999 and came back with more stuff in 2003; Newt Gingrich with the Contract On America in 1994; and, um, more.

  23. Forget global warming, the real problem is our addiction to oil. Canadians, even Albertans, are at the mercy of world oil prices, most of our eggs are in the fossil fuel basket. We are held hostage by market forces, affecting the basic necessities of life. The Dion plan is designed to encourage us to move toward greener alternatives, where market forces have a lesser effect on us. That can’t be bad, the way I see it.

  24. “Now obviously I can’t speak for anyone else, but I know in Sask that PM Harper has attained near hero worship.”

    See, now this is funny.

  25. Touché, Wells.

    I have a feeling, however, that the PM is road-testing various catch-phrases right now to see what has the impact of “Zap, you’re frozen!” on the electorate.

  26. Dion has been snookered into releasing the Liberal platform more than 1.5 years before election (October 2009). PM Harper has plenty of time to react with a more compelling (and sellable) plan.

    Judging from NDP reaction to Green Shift, I see potential for a Harper/Layton entente on cap and trade (this is also why the election won’t be in 2008 – why would Layton help Liberals bring down Harper Government in order to run on Green Shift?).

    A key element of Green Shift is “no carbon tax on gasoline at the pump.” This is designed to pander to taxpayers suffering from large gasoline price hikes. But what Green Shift actually says is that a carbon tax on gasoline is unnecessary because there is already a federal excise tax of 10 cents per litre. But what if Harper announces that, due to high gasoline prices, the Government will reduce or eliminate the excise tax? This will drop the price of gasoline, and force Dion to say that Green Shift now means Liberals have to put a carbon tax on gasoline (otherwise Green Shift makes no environmental sense). This makes Liberals in favour of higher gasoline prices, and Conservatives (and NDP) in favour of lower gasoline prices. Pure Political Gold.

    My guess is Harper will wait until BC carbon tax takes effect July 1, come back from G8 Summit in Tokyo, see the reaction, and then move to reduce excise tax, or announce CPC-NDP entente on cap-and-trade (PS both McCain and Obama favour cap and trade), or both, during the summer. The CPC policy convention takes place in mid-November (i.e. after the US election so we’ll know who the next President is and how Democratic (protectionist) the next Congress will be) so there will be every opportunity to roll-out a new Federal Energy Strategy (which includes a GHG emissions element as well as supporting new technologies, but no federal carbon tax) which could be a key component of the budget in February 2009 and act as the lead-up to Election Campaign Fall ’09.

    I’m certain that PM Harper can’t believe his good luck. Dion has just handed him a priceless gift.

  27. Stephan Dion says that his green shift is revenue neutral and all carbon taxes will be given back to the taxpayer in the form of tax relief.

    My question is this. The Liberals do not plan to put a carbon tax on gasoline for the first four years since there is already an excise tax on gasoline. After that they say the excise tax will be merged into the carbon tax. Does his tax rebate plan now mean that he plans to give back the gasoline tax to consumers as a tax rebate? Even if this only happens after year 4 when it stops being called an excise tax and starts being merged in with the carbon tax my point is the same.

    Both the Martin government and Harper government promised that money form the gasoline excise tax would go to pay for needed improvements to transportation infrastructure. Under Dion’s plan this money would no longer be available. What does Dion say about this? What do the big city mayors who are depending on that money say about this?

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