The Liberals' invisible carbon tax

Financial Post via National Post ^ | 2008-05-27 | Terence Corcoran

[Clive]

The Great Liberal Carbon Tax is apparently still in gestation, delivery date unknown. Energy prices are already through the roof, up to $1.33 for a litre of gasoline, but the Liberals believe Canadians could use a little more bad news on the cost of heating their homes, running air conditioners and driving to work. Oops. Sorry, not driving to work. The Dion Liberals are deeply, deeply committed to the use of green carbon taxes to bring the power of market forces to bear on transforming the way we live and thereby thwart the ravaging monster of man-made climate change, but they are not so crazy as to actually impose their new tax on Canadians' biggest energy expenditure, gasoline. At least not yet.

In this the Liberals may be taking some lessons from Britain's Labour government, which is currently in some kind of political free fall, in large part because it earlier created carbon taxes and other green schemes that are now backfiring. As Benny Peiser describes elsewhere on this page, Prime Minister Gordon Brown's government may be aiming to save the planet, but it is killing the Labour Party.

This is not to say that the Liberals will go the way of Labour. The Liberals are already backtracking on the carbon tax. They don't even want to call it a tax anymore. According to media reports, it's going to be called a "Green Tax Shift" or a "tax shifting" mechanism that would take money from people for using carbon-based energy and then give it back to them through rebates on income and other taxes. So there's no tax increase, just a "revenue neutral" movement of billions of dollars in, out and around the federal revenue machine.

So, you see, there's no tax increase, really. You pay the tax here, and get it back there. Frankly, if it's that simple, they could just roll the transaction into one smooth operation. Let's say they were to impose a new 20-cent tax on a litre of gasoline. At the pump, you would get a 20-cent-a-litre tax receipt that you could deduct against your federal tax payable. Instant tax shifting, totally revenue neutral, right on the spot.

That's silly, of course. Although not much sillier than the revenue neutral claim or the tax shifting label the Liberals are attempting to spin as selling points for their carbon tax. No new carbon tax is going to be revenue neutral to individual taxpayers, even if the auditor-general were to certify that not one penny of new money would be raised by the new tax and that all of it would be returned to taxpayers.

Then there's the question of whether the public will see a carbon tax as so powerful in its logic that it will jump aboard the Liberal bandwagon. Andrew Coyne, writing in Maclean's, believes the public "may well come to agree" with the carbon tax scheme, although it's a belief that appears to be driven more by Mr. Coyne's zealous enthusiasm for the idea of a consumption tax and less by any hard reckoning on the attitudes of Canadians.

According to Mr. Coyne, a recent poll shows 61% of Canadians support a carbon tax. If I were a Liberal, I wouldn't take that number to the bank. A new poll released yesterday by Pembina Research reported a higher number, 72%, although the support wasn't exactly overwhelming. The question was whether people support British Columbia's new carbon tax, and only 27% were "very positive." Another 45% were "somewhat positive," although one wonders how many people across Canada have any knowledge of the details of the B. C. carbon tax plan.

The Pembina poll also threw cold water on Mr. Coyne's --and the Liberals' --faith in the appeal of tax-shifting and revenue neutrality. The majority of people -- 63% -- felt that if Ottawa were to introduce a carbon tax, the money should be used to subsidize renewable energy (wind and solar) and energy efficient technologies. Only 11% thought cutting income taxes with the carbon revenues was a good idea. Pembina, of course, isn't exactly objective in this, and the poll seems tilted toward getting the result it wanted-- support for subsidies for its favourite forms of energy.

The big hope for advocates of a carbon tax appears to rest with the ability of policy wonks to sell the idea. As Mr. Coyne put it in a recent CBC panel discussion, the carbon tax "is a policy that is widely praised by ? policy validators, the people who know something about the subject."

Policy validators? Let me look that up in my guide to government. Ah yes, here it is. Policy Validators of Canada: "We'll validate your policy in 24 hours, or you get your money back."

[steelyourfaith]

 

Beam me to Planet Gore !

[Clive]

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[fanfan]

[goldstategop]

I love it when liberal politicians try to sell people on the need for new taxes.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[beaubazzoo]

That Maurice Strong is a real piece of work.

Years ago, when he was chairman of Ontario Hydro he borrowed large sums of money to buy up rain forests in South America to ensure that they stayed as rain forests. Nothing to do with supplying hydro to the province of Ontario.

To this day there this is a line item on my hydro bill charging me a few dollars for ‘debt repayment charges’ Grrrrrrr.