Thursday, September 11, 2008

My projections show Harper's diesel tax cut won't make a difference...

...mind you, my projections are based on the assumption that he won't actually cut the tax:

But it turns out that the Conservative research underpinning Mr. Harper's forecast of a carbon tax-induced recession isn't all that recent.

While the Liberals' proposed income tax cuts might spur economic growth, the Conservative leader also said he is not taking these into account because he doesn't believe Mr. Dion will enact them.

5 Comments:

  • half-truths, again.

    By Blogger Deb Prothero, at 12:26 AM  

  • from the Cons, I meant, of course.

    By Blogger Deb Prothero, at 12:27 AM  

  • I don't understand why people find the revenue neutrality aspects of the carbon tax so hard to swallow. Sure, it might be a bit of a negative due to admin costs, but the worst case scenario is that it means a bit more government revenue.

    Some will gain, some will lose but, on the whole, it's hard to see how it will screw everyone or destroy the economy.

    By Anonymous Deb, at 2:20 AM  

  • "Some will gain, some will lose but, on the whole, it's hard to see how it will screw everyone or destroy the economy."

    Well a few things...

    1. You are ignoring the producer side of things. High gas prices and a high dollar already pose a threat to carbon-intensive industries, like the auto industry. Coupled with a global recession, you may start to see whole industries collapse. Yes it is part of a long-term transition, but when a lot of things go down in a short period of time, you suddenly magnify a whole host of other problems, as regional economic problems snowball.

    2. You are ignoring that transportation isn't just another economic sector. Transport will be hit hard by the carbon tax - spreading costs to all industries, and effectively acting like a barrier to trade would.

    3. You are also assuming that the income taxes will perfectly compensate for higher prices. It isn't clear to me that this is the case. Oil is not a price-elastic good, so anything that hits producers can easily by passed on to consumers. Moreover, the short-term stimulus provided by the tax cuts will be minimal because the largest beneficiaries (apart from the 8 million exceptions to the green shift) are the upper middle class.

    4. Dion's Green Shift includes tariffs on other countries that are probably illegal under WTO rules.

    Now, Harper is using an outdated model, but can anybody point me to a more recent model? Don't you think it is a problem that you can't, given a proposal of this magnitude?

    By Blogger hosertohoosier, at 4:54 AM  

  • Incom tax cuts under the shifty green plan spurring economic growth would be hillarious if it weren't so sad. All the tax cuts will do is (eventually) give people enough extra to cover their higher energy bills.

    Canadian: Energy costs have gone up $100 per month!

    Dion: I will cut your taxes $90 per month! ($10 goes for admin)

    Canadian: I'm in the hole $10 per month, and I get the money later than I used to!

    Dion: Exactly! Ottawa, I mean, um, Canada will be richer, fairer and greener!

    Canadian: I live in Saskatchewan!

    Dion: Move to Ottawa!

    By Anonymous Anonymous, at 4:32 PM  

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