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Defining the issue before the other folks define it for you.

I’m going to write about today’s Chantal Hebert column without taking potshots at her, because she’s actually talking about Dion without taking potshots at him – a rarity since Dion has become leader of the Liberals.

What I’m going to focus on from her column is whether Dion should make a carbon tax a key policy plank in the Liberals campaign or not, and that he needs to decide soon. I do agree with that; if we’re not going to have an election this June (and many of us, even those who are election hawks, are increasingly resigned to that), and Dion is going to go on a summer tour with key Liberals, then this policy needs to be pushed up front and centre and he and his spokespersons and surrogates are going to need to be out there on the circuit explaining what a carbon tax entails, and more specifically what it does NOT entail.

If Dion and the Liberals let this policy sit without proper explanation, that is what you’re going to see from the Conservatives – trying to equate it to a “gasoline tax”, when it is nothing of the sort.  There will not be a direct raise of gasoline prices because of any carbon tax implemented, and it will also involve lowering taxes in other areas; what is known as a tax shift.  But Ms. Hebert is correct when she says policy nuances like this get lost in the middle of an election campaign.

Start promoting it and explaining it now, or risk losing the spin war.  Choose BC and Quebec as the first 2 places to do the explaining too; both have implemented versions of it, both (if Ms. Hebert is accurate) have been well received there, and both are provinces where the Liberals have to win additional seats to win government.  I can’t think of 2 better provinces to start talking about this carbon tax proposal.

14 comments to Defining the issue before the other folks define it for you.

  • Johnny Baird was on Big Mike Duffy today. He called the carbon tax a “gas tax” and claimed it would add $0.50 to a liter of gasoline. Later in the program, Duffy used the term “gas tax.” They kept yammerin’ on John Crosbie’s 18 cent a gallon tax that sunk the Joe Clark gummint.

    JB

  • Ted

    A carbon tax must include automobile fuel if it is to have any teeth. They do it in Europe and should do it here.
    Having said that, I remember vividly Jean Chretien speaking to a rowdy York U. audience during the 1980 Federal election campaign. “That John Crosbie, he think he very funny guy, but that 18 cent gas tax was one joke too many” The crowd was in stitches. The 18 cents was added to every gallon on gas. A large sum in those days.
    The Conservatives have not forgotten how the Liberals made mince meat of their gas tax. and are waiting to pounce on a Dion gas tax. Many Canadians travel long distances and feel they are entitled to cheap gas.

  • I’d say that a carbon tax would only be politically salient if there were big tax incentives for greener transportation, and a spending commitment on public transportation and (due to the density requirements of public transportation) proper urban planning.

    If people have no way of reducing their carbon footprint, a carbon tax will just piss them off. They need to have options.

  • mushroom

    “Why not just increase the enviro fee on bags/bottles/cans/computers/etcetcetc that is already in place?
    Are these fees not working to encourage recycling?
    Are there not already fees on gas guzzlers vehicles?”

    Wilson, why not junk recycling efforts all together and take on the rational economic argument? Support garbage incineration, full stop. I look forward to you presenting some evidence below to demonstrate us and John Baird that there are environmentally friendly technologies available that makes garbage incineration clean, effective, and a clear benefit to Canadian tax payers.

  • Way to fall for Fraser Institute – sorry Can West propaganda Wilson. The Star’s Linda McQuaig put it best.

    “‘family incomes have mostly risen because, with far more women working than in 1980, families now typically have two incomes.’

    So let’s get this straight: Even as neo-conservative policies have helped the ultra-rich increase their incomes by an average of $3 million, the Post thinks Canadian families should be content with earning a little more than they did 25 years ago – by working twice as much.

    Luckily Canadians have the Post to help them see how really well they’re doing in this neo-conservative age.

    http://www.thestar.com/comment/columnists/article/421681

  • wilson

    re JimBobby:
    ”The revenues generated will be offset by reduced taxes on personal income, payrolls and on green products and technologies. The new taxes will also be non-regressive (e.g., the carbon tax will include a rebate program for low-income Canadians living in rural areas).”

    That would create an administration NIGHTMARE, and would cost a fortune in time and money, which taxpayers would have to pick up!!
    Why not just increase the enviro fee on bags/bottles/cans/computers/etcetcetc that is already in place?
    Are these fees not working to encourage recycling?
    Are there not already fees on gas guzzlers vehicles?

    ”* Modify personal income tax rates so that the wealthy contribute their fair share and the gap between rich and poor stops growing and starts narrowing. ”

    Did you not read the StatsCan report YESTERDAY that stated the rich have not gotten richer, but the poor have!

    http://www.canada.com/vancouversun/news/business/story.html?id=4f71cfc6-26d5-4ea3-bc99-e2dd1e4af911

  • mushroom

    “They will be facing the double whamming of higher fuel costs, those that have cars anyway, and higher grocery costs.”

    Not sure about this, Koby. University students will get to offset the carbon tax by receiving grant cheques from the government. This is why a Guaranteed Annual Income would be needed in case grocery costs skyrocket (and that is a big if). I didn’t own a car when I was in grad school, so not all students do drive. The only disappointment are the excise taxes on smokes and drink and we can debate about whether socializing in bars and restaurants is a fundamental right.

    Note also that there is a possibility a Dion-May coalition government will demand changes in the global trade system. This means that we will be eating healthier locally produced organic food rather than depending on imports. I guess I will have to grow more organic mushrooms in my garden patch (even though I live in a condo) so poor students will be well fed.

  • There is no such thing as “revenue neutral” carbon tax and that is why Gordon Campbell, who despite what people in Toronto might think is only slightly more progressive than Mike Harris, and Charest like it so much. It is a way of shifting more of the tax burden onto lower income earners — that is people who do not vote for them and who they do not care about it in the least. Students, for example, do not pay much if anything in the way of income taxes. They will be facing the double whamming of higher fuel costs, those that have cars anyway, and higher grocery costs.

    A carbon tax is also redundant. Fuel prices are only going to go up and that provides people with all the incentive they need to change their behavior. Adding a carbon tax on top only makes such shock therapy all the more painful.

  • mushroom

    “Eliminate personal taxes on incomes below the low-income cut-off ($17,219 for single person living in a city).”

    JB,

    Since the Greens support income splitting, this means that the chance of a family of four earning less than $35,000 will probably pay no income taxes!!!

    “Introduce a high tax bracket on incomes over $150,000. Work with the provinces to increase taxes on tobacco and alcohol.”

    This means that the Greens are supportive of a Solidarity Tax on Wealth. The Cons will love to counter this by calling Dion a tax and spender. So revenue neutral does not mean moving from income to consumption taxes, but moving into a European progressive tax system. Sadly tobacco and alcohol taxes hurt lower income Canadians, because only unhappy people engage in these vices ;(

    Not really interested in NETFIL and rebates etc. If you suggest that the Grits and the Greens should move towards a more progressive economic and tax policy, that’s fine with me. There is nothing revenue neutral about this. So calling this a carbon tax has the notion of Dion and May driving a Trojan horse at the Cons.

    Increased tax breaks for Canadians donating to charities. I presume there is a commitment for Lizzie May to increase the foreign aid budget to 0.7 per cent of GDP in two years and 1.0 per cent in five.

    Ti-guy, hope you are happy with this exercise. We have highlighted the pitfalls which a simple carbon tax may cause.

  • “fund the anti-poverty policies outlined later in Vision Green”

    I think you may not be clear on what was meant by “later.” That means later in the same document I was quoting from. It doesn’t mean that we’ll deal with the issue later on. There’s only so much I feel comfortable copying and pasting from the GPC 150+ page policy statement, Vision Green.

    A carbon tax works not on fear, as you contend, but as an incentive to conserve in order to avoid paying tax. That means doping things like insulating and replacing drafty windows in order to make the house more environmentally friendly and less fossil fuel reliant. The shift allows us to proportionately tax consumers based on how much carbon they output. As an example of ostentatious consumption, soccer star David Beckham has a carbon footprint that is 17x the size of the average American. And, the average American’s carbon footprint is about double most G8 nations, except Canada.

    The extremely wealthy are big CO2 emitters. Jet-set travel, expensive fleets of luxury vehicles, super-sized mansions and yachts are the reasons why.

    Here’s a little more from the GPC on economy, tax shifting and poverty reduction:

    ***********************

    Green Party MPs will:

    * Institute a full range of “polluter pays” taxes, including a carbon tax designed to reduce the use of fossil fuels by making them more expensive to produce and burn. All these taxes will be largely revenue neutral. The revenues generated will be offset by reduced taxes on personal income, payrolls and on green products and technologies. The new taxes will also be non-regressive (e.g., the carbon tax will include a rebate program for low-income Canadians living in rural areas).
    * Eliminate personal taxes on incomes below the low-income cut-off ($17,219 for single person living in a city).
    * Modify personal income tax rates so that the wealthy contribute their fair share and the gap between rich and poor stops growing and starts narrowing. Introduce a high tax bracket on incomes over $150,000. (Canada’s rate flattens out at 29 percent for incomes above $121,000. The US rate flattens out for incomes above US$336,000 at 35 percent).
    * Work with the provinces to increase taxes on tobacco and alcohol.
    * Encourage people to use Revenue Canada’s online NETFIL tax filing system, which saves Revenue Canada money, by giving users an automatic $10 tax credit.
    * Develop a specific tax-shifting schedule to provide tax incentives and direct rebates to businesses and individuals investing in the low carbon economy (e.g. installing solar hot water systems, refitting homes and businesses to conserve energy).
    * Provide increased tax breaks for Canadians who donate to charitable societies.
    ********************

    Most of the Greens’ policy wrt poverty are addressed in the section on People:
    http://www.greenparty.ca/en/policy/visiongreen/partfour

    JB

  • Ti-Guy

    I’m not waiting for the Party Leadership to explain anything. I’m waiting for committed Liberal partisans to start hashing out the issue themselves.

    These is the grassroots dynamic that Liberals, long used to power, have to confront and animate. A good few months in the absence of hand-wringing over polls and competitive fundraising and rapid-cycling manic-depression over the Party’s fortunes (not to mention the standing invitation to Conserva-trolls to constantly force Liberals to explain themselves…!!!) might be good time for that.

  • mushroom

    JB,

    Are you suggesting that Stephane Dion should eliminate corporate subsidies and grant programmes by implementing a Herb Grubel-Stockwell Day style flat income tax???? How can you guarantee that lower income Canadians will benefit when they probably will take an initial hit? This is neoliberal economic orthodoxy at its purest form. No wonder The Economist likes it.

    This is something that also needs to be taken into consideration:

    “fund the anti-poverty policies outlined later in Vision Green”

    These anti-poverty policies need to be up front and be implemented first to counter the offset your senior citizen scenario will present. You can argue that the senior will vote for Harper’s Con anyway. At the same time, you also seek to do away with incentives to make the house more environmentally friendly. A carbon tax works because it is based on fear, we will need to puruse alternative sources of energy because traditional ones will no longer be subsidized and consumers must pay their market share.

  • mushroom

    JB,

    Are you suggesting that Stephane Dion should eliminate corporate subsidies and grant programmes by implementing a Herb Grubel-Stockwell Day style flat income tax???? How can you guarantee that lower income Canadians will benefit when they probably will take an initial hit? This is neoliberal economic orthodoxy at its purest form. No wonder The Economist likes it.

    This is something that also needs to be taken into consideration:

    “fund the anti-poverty policies outlined later in Vision Green”

    These anti-poverty policies need to be up front and be implemented first to counter the offset your senior citizen scenario will present. You can argue that the senior will vote for Harper’s Con anyway. At the same time, you also seek to do away with incentives to make the house more environmentally friendly. A carbon tax works because it is based on fear, we will need to puruse alternative sources of energy because traditional ones will no longer be subsidized and consumers must pay their market shares.

  • Whooee! Well Scotty, since the Grits are talking about adopting the Green Party’s long held tax shifting policy, your guys may as well use our explanations, too.

    From Vision Green:

    The single most significant government policy tool to advance or retard economic sustainability resides in the fiscal framework.

    The Green Party commitment to Green tax-shifting will:

    * Reduce income taxes;
    * Reduce payroll taxes; and,
    * Introduce a carbon tax, sending a clear economic signal that wasting energy and resources implies real costs.

    According to an editorial in The Economist, September 9, 2006:
    “Ideally, politicians would choose the more efficient carbon tax, which implies a relatively stable price that producers can build into their investment plans.”

    The Green Party will also eliminate large corporate subsidies and grants programmes.
    It makes no sense to subsidize the wealthiest companies on earth to make the world’s most profitable product — a barrel of oil. These perverse subsidies must be removed. It makes sense to reduce taxes on things we want – income and employment – while increasing taxes on things we do not want, like greenhouse gases and pollution that causes smog.

    Canadian businesses want two things from their government: predictability and policy coherence. The Green Party government will ensure that the rules are clear, the playing field is level and decision-making is transparent.

    Our fiscal plan is straightforward: Use the tax system to help meet societal and ecological goals. Get the prices right. Allow business to pursue profit, with clear signals of environmental and societal objectives.

    Key societal goals:

    * Ensure Canadians have more time for friends, family and community engagement.
    * Send the right price signals to the economy. The days of cheap, abundant energy are over. A carbon tax will send that signal and generate the revenue to cut income taxes, allow “income splitting” and fund the anti-poverty policies outlined later in Vision Green.
    * Eliminate perverse corporate subsidies. No more “corporate welfare bums.” No more unpaid “loans” to government granting agencies.
    **************************

    Here’s the anti-carbon tax argument that you’ll need to counter:

    Reducing income tax while imposing a carbon tax means that an urban apartment dweller making $600,000 a year will get his taxes reduced while a poor, rural, senior citizen who has no access to public transit gets walloped with unbearably high gasoline and home heating costs.

    Be ready to counter that one.

    JB

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