Tuesday, April 06, 2010

Tax Season

After a decade of non-stop tax cuts, the pendulum may be starting to swing in the other direction. In today's Nova Scotia budget, Darrell Dexter has proposed a 2 point HST hike. This comes on the heels of Jean Charest's taxapalooza last week, and Michael Ignatieff's promise to cancel corporate tax cuts.

And even though they're not exactly tax hikes, Gordon Campbell survived his carbon tax and has, like McGuinty, gone the harmonization route.

So what gives? Have Canadian politicians, renowned for risk-aversion, grown bolder? Or have ballooning deficits forced their hand? Remember, in the 90s, most Canadian governments cut their way out of recession - so why tax their way out this time?

I don't have the answer, but seeing the reaction to these proposals will put to the test the old theory that raising taxes is electoral suicide.


  • Looking forward to Jack Layton and other federal NDP members rallying against Dexter's HST, which will overly hurt the poor.

    By Blogger Steve V, at 6:57 PM  

  • If you want to raise taxes, you want to do it a couple of years in advance of any election. I think that explains the timing for all of these guys.

    By Blogger bigcitylib, at 7:05 PM  

  • Steve, we've had the HST for around 15 years, and for most of that time it was already at 15%. Were you not aware of this? The budget also provides for refundable tax credits for low income people and some seniors. This does nothing more than reverse Harper's cuts of only a few years ago, except now all of that additional revenue will stay in NS. Are you suggesting that we cut the GST further?

    By Blogger Josh, at 7:45 PM  

  • I think in the 90's there was still room to cut taxes; now, not so much.

    Furthermore, I think that people are beginning to realize that commercial enterprises DO receive a significant benefit from government spending (infrastructure, security etc.)that, while not as large as the cumulative individual benefit, does need to be paid for.

    Keep in mind also that the shift of tax burden from commercial enterprises to individuals(from a roughly 50/50 split to a 90/10 split, initiated, I believe, during Mulroney's terms) is one of the things that provided impetous to general discontent with taxes, which the Cons especially have been able to exploit to electoral advantage.

    Finally, I suspect that people don't have as high a level of concern over business "happiness" in the wake of evidence that business is just another special interest group with perhaps more influence over government policy than is warranted. Bailouts of industry and banks, and corruption in some major financial institutions has a way of reducing the esteem in which business is held has a way of doing that.

    By Blogger Party of One, at 7:54 PM  

  • It's one thing to raise taxes when you're in power, quite another thing to try and get elected on doing that!

    By Anonymous Anonymous, at 8:17 PM  

  • People support smart & fair taxes (McGuinty's health tax and seems to have won debate on HST). They oppose unfair, stupid taxes. Why? Because they make the connection between taxes and services, and fair and unfair. Why: More connected, more informed public than ever. When Charest cut income taxes after receiving "fiscal imbalance" funds, a strong majority disagreed, would have preferred money kept in services. They now disagree with his proposed substitution of regressive flat health taxes for progressive income taxes. People get it, more than ever. BS less useful (unless in our particular 5 party federal environment, which promotes narrowcasting).

    See Josée Legault:

    By Blogger Eugene Forsey Liberal, at 9:23 PM  

  • PS. I voted for your post on Progblogs and hope others do too, to shame NDP bloggers into responding, esp. those who have most ranted about HST. NS budget is above average, as HST rise, compensated with increased credits for low-income, is good, as is increased tax on 150+K. Bad is decreased tax on 100K - incoherent. Also, if deficit is the thing, why cutting corporate taxes? By half a point? I strongly disagree with corp tax cuts - everyone should pay to stop deficit, corps & individuals on prog basis. But if going to cut corp taxes, to draw/keep business I guess, than got to go big: can't half prostitute oneself. Half a point just irritates taxpayers compared to their own situation, and does nothing to draw investment. Also, should have raised gas tax, and heating tax, and all environmental taxes, with credits-compensation on prog basis.

    NS Lib campaign was fairest, most honest and best. Stupid NDP. Old politics. Gives a bad name to all politics. Means a decent budget will be hated as exposes NDP campaign as complete lie, predictably. Sad. Prob minority Govt for someone next time.

    By Blogger Eugene Forsey Liberal, at 10:26 PM  

  • After all those tax cuts in the 2000s, there just isn't room left to cut taxes. Charest himself cut taxes earlier (as mentioned above after he got the ottawa cash) so this is really only returning them to previous levels.

    By Anonymous Anonymous, at 9:39 AM  

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