Against it now, for it later (perhaps)

Some time ago, a report meant only for the consumption of the Cabinet -- the Harper government mind you -- leaked out. (The Green Party has actually had it up on their site for nearly three months; here's how the federal department of Natural Resources estimated a potential carbon tax cost). It shows clearly that the economy wouldn't be hit that hard if we moved to a fifty dollar per tonne carbon tax -- on average, five cents per litre or the BTU equivalent for other forms of energy consumption -- with a corresponding cut in income taxes.

Yet now the Harper government is slamming both the Green and Liberal parties for saying it will be the end of the world as we know it if we go that way. The main difference between his two mortal enemies is that Elizabeth May would implement the full whammy right now while Stéphane Dion would phase in the shift over four or five years.

Something tells me that the Conservatives are hoping to get a majority because when the floor falls out bigtime -- as it is today with a major drop in the markets -- they will shock Canadians with, surprise, a carbon tax of some kind. They are against it now but they'll be for it later on. It may be a couple months, it may be even be a couple of years. But it will happen.

Don't believe it? Remember Pierre Trudeau's flip-flop on wage and price controls in the 1970s? When he vowed he would never do it again, he did it again in the 1980s and even most provinces (of all political stripes) followed suit, including Ontario PC Premier Bill Davis. (The link refers to a classic article by Leo Panitch the first time Trudeau pulled a fast one on all of us.)

People in Ontario, even Liberals, are still furious at McGuinty for opposing tax cuts before putting in a health tax starting at $20,000 of taxable income and tops out at about $900 around $200,000.

A tax that shows no signs of being removed -- a health tax which in its basic form is actually quite similar to the one proposed by Mike Harris in 1994 a year before he was elected, except what Harris proposed had a $50,000 exemption and called for a 2% health tax on income top out for incomes at $150,000 with a cap of $3,000 after that. He was stonewalled by the feds who didn't allow tax-on-income regimes for the provinces (other than Québec) until 2000 so he instead had to come up with a provincial surtax that would have some kind of a health "premium" while preserving his promise to cut income taxes across the board by ⅓.

McGuinty comes in, renames the "fair share health care premium" a surtax and then puts in the health tax for everyone. He's not kidding anyone. He got the idea from Iron Mike! The only difference is that richer people actually get a much better deal under it than they would have if it was implemented the way it was supposed to have been under the Common Sense Revolution, whilst less well off get screwed.

And in the interests of equal time: Read My Lips: No New Taxes.

Bottom line folks: Never trust a politican who says that he or she will cut taxes. They are raised somewhere else, such as with user fees. Or they'll claim a fiscal crisis (often one they themselves created) and come up with a new way of taxing someone usually by stealing an idea from someone else.

Harper may be against it. But he'll be for it eventually. Remember that.

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