 DIAMONDS ARE A GIRL'S BEST FRIEND, STEPHANE DION TAXES CARBON
I've been studying politics like the sexless geek that I am for well over twenty years now. And if I've learned anything, it is that if you're a candidate whose leadership ability has been questioned for 18 solid months, you should come out of nowhere and announce that you're going to tax one of the very building blocks of life. That almost always works. But be sure that you don't say anything specific about your new tax on all things animal, vegetable and mineral other than you'll implement it. Much better that your opposition can define you for months on end when you could be defining yourself. Better still if the only person willing to support you in public is Jason Cherniak.That's all you really need to know about politics and, fortunately, that's all Stephane Dion knows. He's performing about as well as you would expect a guy who became leader of the Liberal Party of Canada by accident would. Since his ascension he has resisted repeated opportunities to bring down a government he himself has said is destroying Canada and waited for the perfect issue on which to campaign. And it turns out to be one that he explicitly rejected during the leadership campaign. New taxes, as you might imagine, are not usually something that politicians promise during a campaign. They tend to be something that are lied about, usually prefacing the term with the word "no." This is either the craziest fucking thing that I've ever heard or Dion has learned a magical new secret about how the electorate thinks. The plan started leaking on Wednesday and Dion is set to outline it in public today. To be fair, Dion's policy is actually being touted as a "tax shift." This will involve taxes being levied on carbon-based pollutants while income taxes are reduced. In theory, this makes the plan "revenue neutral," something that Canadians are supposed to cherish.
The problem is that taxes are never revenue neutral. It just doesn't happen that way. One can suppose that would be double true when the tax supposedly has a moral purpose such as saving the universe. Politicians are impatient and the public is stupid, so if the tax is implemented and Saskatchewan doesn't become Eden in the first six months, you can rest assured that the tax will become increasingly aggressive.
Furthermore, Canada is such a small country and our percentage of the world's carbon emissions is so insignificant that all 33 million of us could live the life of the Amish and it would do virtually nothing to stop global warming. Even the Bush administration, which created an energy task force comprised entirely of oil executives, is doing better at meeting Kyoto targets (which they didn't even ratify) than is Canada.
Then there's the issue of climate. You might not know this, but Canada gets awfully cold in the winter. And the winter lasts well into July. Home heating oil and natural gas are primary targets of the tax "shift." Not everyone makes enough to pay federal income taxes, but everyone does share the biological imperative to avoid freezing to death. Not only does the carbon shift expand the tax base, it does so in the most regressive way imaginable.
Yes, the Dion plan does call for credits for lower income Canadians, but those can be fleeting. Back in the 90s, when the Liberals learned that running an economy through massive deficits and carrying horrific debt loads, subsidies and tax credits are usually the first thing to go. Under Chretien even health care transfers to the provinces took a significant hit. If the economy goes into recession, which is happening even as we speak, the government is not going to start throwing money around.
Then there is the inflationary effect of the tax shift. Did you know that a chicken, for example, doesn't walk onto your plate and commit suicide? There are several, carbon intensive steps, involved in getting it there. Each one of those steps is about to become markedly more expensive if the Liberals get their way, and those costs will be passed on to you, the consumer.
Anyone who doesn't know what inflation in a recession looks like should study the 1970s. Not only does it cause extreme economic pain, wipe out your savings, and cost you your job, it makes you dress funny. Implementing this tax at the best of times would be inflationary in the extreme, doing it during a recession will be economic suicide. Furthermore, the costs of restructuring the entire tax code to accommodate Dion's pledge might be enough to put the government back into deficit.
Then there's the matter of doing this when gas prices are so high. As much as Americans like to bitch about that, they're paying the lowest price to the gallon of any country outside of OPEC. While US prices are averaging about four dollars a gallon, Canadians are paying over five.
While Liberal spinsters like Mr. Cherniak are saying that gasoline will be exempt, the leaks of the plan don't say that at all. What it calls for is "moratorium on new federal taxes on aviation and diesel fuel for the first year." The problem is that gasoline prices are dictated by the price of oil, from which both aviation, diesel and gasoline all come. I'm not at all sure that you can raise the price of some and not others.
This of course, calls into question the purpose of government. If you're of liberal leanings, this is the ideal tax for you. Not only will you still have your income taxes, the GST and provincial sales taxes, you'll get the Liberals behaviour modification tax as well. You'll be ever so happy if you believe in the power of the government to make life better.
I don't happen share that belief in government. I'm of the mind that the federal government should be limited to paving roads and killing foreigners, two things that it isn't particularly good at. Most Canadians are shocked when the government can shovel snow in less than a week, but now we're expected to believe that it can actually save the world?
Then there's the electoral politics of this, and I've never seen anything handled so disastrously. Dion started musing about carbon taxes months ago but refused to give ant details. This has allowed the Conservatives to define the plan for him and not in the ways that he'd prefer. And most Liberals are just dishonest, not stupid. They have been the government for most of the last century and are the most successful political party in the history of western democracy. They understand how elections work and they understand that no one is going to vote for a giant new tax, shifted or otherwise. This has understandably caused all manner of discontent within the Liberal caucus.
This is not a revenue neutral tax in the way that literate adults understand the term. Not only is it extraordinarily inflationary, it moves Canada away from the principle of progressive taxation and toward a system that rewards or punishes behaviour. The problem is that the poorer you are the fewer options you have regarding your behaviour. Worse still, if you subsidize the bad behaviour of poorer Canadians, you defeat the stated purpose of the plan.
Even if this plan were the greatest thing ever, it is almost impossible to properly explain the context of a thirty second commercial or a ninety second debate answer. And unfortunately for Stephane Dion, those are the only things that voters pay attention to. All Stephen Harper is going to need to say is "Yes, climate change is important, but so is the cost of feeding your family. If you think that you aren't paying enough, I encourage you to vote for my opponent. However, if you think that you're paying too much, you should trust the Conservative Party to manage our fuel crisis and stop inflation before it starts."
And then Stephane Dion will be destroyed.
I don't know what it is about Dion, but he seems determined to make every day Christmas for Stephen Harper.
Easy Listening Recommendation of the Day: Fall on Me By: R.E.M From: Life's Rich Pageant
PermalinkLabels: Fun With Politics, O Canada, Retard Cage Match of the Doomed Redux
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