[Newsbot]

Filibuster Cartoon
Title: Green Machine (click to view)
Date: June 25, 2008
Liberal leader Stephane Dion has staked a great deal of his political future on a proposed Carbon Tax, which, should he be elected Prime Minister, will tax all gasoline purchases made in Canada.

Dion wants the tax to be "revenue neutral," which is to say it won't actually bring any more money into the government, because he'll accompany it with tax cuts in other areas. So it's really more of a punishment tax than anything else.

The Liberals say it will do wonderful things in the long run, namely get people to drive less and invest more in green energy. But to many people, a tax is a tax, and promising more of them is never a great way to get elected.

[Pseudonym]

I hate taxes. Can we all agree on that?

[N_Fiddledog]

I heard on a radio talk show the other day the GST was supposed to be "Revenue Neutral" when it was first proposed. Is that true?

[thealmightynarf]

Wait, wait wait... he's proposing to make gas prices higher?!

Is he trying to keep the Conservatives in power?

[dino_bobba_renno]

N_Fiddledog wrote:

I heard on a radio talk show the other day the GST was supposed to be "Revenue Neutral" when it was first proposed. Is that true?

Yes, but what revenue neutral means to you and what it means to the government are two different things. The GST was originally brought in as a replacement for the MST (Manufacturing Sales Tax) and a couple of other taxes that where around back then. The thing was that the weight of the MST was carried mostly by businesses which hurt their competitiveness in terms of exporting. So the idea was that if the tax was shifted instead to the end user (the consumer) this would help Canadian businesses be more competitive in the global market.

The tax was intended to be revenue neutral but here’s the catch. Revenue neutral for the government not the consumer. The government didn't intend to raise more money by shifting the tax it simply intended to change who was paying the tax. It eliminated a tax that manufactures were paying and created a new one for consumers. So that's the idea of revenue neutral.

The GST ended up generating far more income for the government than expected so in the end it wasn't so neutral after all but that’s a story for another time.

*I'm no history buff by a long shot but that's the general understanding I have. If anyone notices any inaccuracies by all means feel free to correct me.

So when you hear party leaders throw around the term "Revenue Neutral" be very wary. If for example the Conservatives introduced ... lets say a new carbon tax that you the consumer would have to pay and they claimed would be revenue neutral. If the tax generated 15 million in revenue for the government but through administration of the program (hiring people to do the work to collect it, renting office space, buying paper etc etc) they spent 15 million implementing it that would by very definition be revenue neutral.

[faile]

dino_bobba_renno wrote:

So when you hear party leaders throw around the term "Revenue Neutral" be very wary. If for example the Conservatives introduced ... lets say a new carbon tax that you the consumer would have to pay and they claimed would be revenue neutral. If the tax generated 15 million in revenue for the government but through administration of the program (hiring people to do the work to collect it, renting office space, buying paper etc etc) they spent 15 million implementing it that would by very definition be revenue neutral.

That isn't true. Revenue neutral means revenue neutral, it has nothing whatsoever to do with expenses.

If they said "We are going to reduce taxes for the richest 20 people in the country by $1000000 each by taxing the poorest 20 million people one additional dollar this year, that would be revenue neutral regardless of how much CRA overhead the additional rule caused.

[Psudo]

How accurately can they predict the future cost of taxes not yet implemented?

Secondly, how do higher gas prices help the average Joe Canada? The theory is that green energy will get extra funding and oil companies will reduce their sales figures, both of which are good for the environment in the long term. But between now and then, gas and everything shipped in vehicles requiring gas gets more expensive, making everyone's budget's a little tighter. You might be able to argue that it's close to a net zero change, but you can't seriously claim bad + good = good.

[Zipperfish]

I kind of like the idea of reducing income taxes, but then I don't drive much, so I would probably end up ahead as far as the gas tax went. Also, I'm all for taxing goods over taxing income if there has to be tax.

But the problem here, I think, is economic elasticity. You have to have viable options for people, otherwise the tax is regressive, as I understand it.

I say privatize the damn roads already--hand over maintenance to private companies, who will toll them. Charge insurance on the number of clicks driven per year--why should drivers totalling 1,000 km/year on their vehicles be paying the same insurance as drivers racking up 20K?

[dino_bobba_renno]

Zipperfish wrote:

I say privatize the damn roads already--hand over maintenance to private companies, who will toll them. Charge insurance on the number of clicks driven per year--why should drivers totalling 1,000 km/year on their vehicles be paying the same insurance as drivers racking up 20K?

I'm not big fan of privatizing roads but you do have a good point about the km's a person puts on in a year.

As for your comment faile, we will see won't we.

Not to mention there isn't anything stopping the government from using proceeds from this tax to give big business a tax break is there. That would still be revenue neutral. Or taking from the middle and upper income earners and giving it to those in the lowest tax bracket. One thing I'm driving at here is that revenue neutral for the government doesn't mean revenue neutral for the average tax payer.

Zip mentioned he doesn't drive that much so he won't be to hard hit but the guy who delivers the groceries to the store he buys them from will be. That in turn will make the cost of groceries go up.

The biggest myth that is being perpetuated by the Dion with this carbon tax is that it won't cost you a dime so long as you do your part and try to conserve a bit. Nothing could be further from the truth as everything and anything you touch is going to go up in price and the 1% tax break the average Canadian will recieve won't come any where close to covering those costs.

[CanadianJeff]

I think JJ put it very very simply in his comments.

"A tax is a tax is a tax" I don't care if it's on food or gas or land.

It's just not an electable policy. Instead how about "tax breaks" for those who use public transport and carpools.

Seems like a far more electable and positive policy to me....oh wait.

The conservatives did that didn't they. I was allowed to write off all my bus passes on tax this year.

[commonsense]

1. It will NOT, I repeat NOT, one more time... NOT, tax Gas. Read the policy document BEFORE going through the trouble of drawing a comic about it.

As for its revenue neutrality, unlike the current "transparent and accountable" government, the Liberals are proposing to enact laws to really make government transparent. For example, one of the first laws they want to enact when they get into government (before they enact the green shift law I hear) is to make the Auditor General review government revenues in order to make sure that it is revenue neutral.

This, in contrast to Harper who promised NOT to appoint senators, but within 1 month of taking office, not only appointed Michael Fortier to the senate, but appointed him to cabinet because he has next to no representation in Quebec.

I could also go through a litany of other broken promises and examples of taking Canada backwards, but alas, I don't think there are enough hours in the day to type them out before you draw another comic.

[commonsense]

CanadianJeff wrote:

The conservatives did that didn't they. I was allowed to write off all my bus passes on tax this year.

Yes, they did, and it's one of the few conservative policies that I applaud. However, what about helping the creation of NEW public transit?

So far, only a few select, large cities have public transit. And progressive provinces like Ontario which are trying to expand public transit are getting the cold shoulder from the Harper conservative government. No funding assistance for operation of transit from the federal government (a policy that only Canada among the G8 has), no funding assistance for construction of new transit (I believe their policy is, "build it, and we might consider giving you back some of the cost, if we feel like it").

Yeah, you get a small tax break for using it, but overall, because there is no direct service increase, or direct money back, it isn't affecting the behaviour of most consumers.

There are quite a few studies that show that the impact of higher oil (and by deductions gas) prices is having a far greater impact than tax-refunds on transit passes.

[dino_bobba_renno]

commonsense wrote:

1. It will NOT, I repeat NOT, one more time... NOT, tax Gas. Read the policy document BEFORE going through the trouble of drawing a comic about it.

Look, what do think is going to happen when you hit big oil with a carbon tax on their emissions when extracting, and then refining and then to top it off delivering that very fuel the Liberals have said they won't tax?

Please if you honestly believe that gas prices won't go up with this tax then I would suggest you should have picked the forum name Naive instead of Commonsense. Dion himself has admitted that consumers will see an increase in fuel prices.

[HaRdLy]

WTF is with all the noobies all of a sudden? The liberals figured they would plant some of there greenshit supporters here to try and pull the wool over everyones eyes?


If Mr Dion's "TAX" helped me become more environmentally friendly, I'd be all for it.

[commonsense]

Oh yeah, it'll affect fuel prices, no doubt. But it's dependent on the individual companies how much it'll affect the prices. There will be no DIRECT tax on fuel prices (as Harper and his lackey's like to purport), but using the market (which the conservatives LOVE to say they are in support of despite their actions), companies that are able to produce said fuel more efficiently will be able to charge less for their final product and undercut the competition.

As for conservatives and their supposed support of the market, I love that Harper has (in theory anyways) a masters in economics. There are few real economist that actually support his economic programs. For instance, cutting the GST... I don't think there is an economist on earth that seriously thought that was a good move.

Cutting income taxes, good idea. Cutting GST, bad idea.

WHY?

GST, VAT's, Manufacturing Taxes, etc., they are by very definition progressive, equitable taxes. If you buy more, you're taxed more. Those that have more, can buy more. Those that have less, buy less, and are therefore taxed less. Obviously staples (unprocessed foods, some hygiene and sanitary supplies, etc.) aren't taxed at all, but overall, if you can afford a BMW, you can afford to pay more in taxes.

What does Harper do? He raises the tax rate for the lowest income bracket, then proceeds to lower the GST, a move which obviously favoured the richest at the expense of the poorest.

That is 1. bad economic policy (bankruptcies and the poor in general are expensive to society, whereas people who can stand on their own two feet benefit society), and 2. unfair (why should the poor, those with the most to say and the least means to say it, be disadvantaged against those that already have power and means?)

To answer HaRdLy, hey, their shit makes sense these days, and if they can pull it off, I'll vote for them! Unlike you, who clearly tows your party line even in the face of the glaringly obvious counter-productive and overly partisan nature of it, I read the parties policies, and voice my opinion based on what they say, and how it will impact society.

As I said above, I support the conservatives tax-rebate on transit passes. Good policy. I also support the Liberals Green Shift because (Shock, Awe!) it is good policy!