There has not been a big issue separating the federal parties since the election of 1998 was fought on free trade. Now, as a result of Stephane Dion’s announcement there will surely be a big issue in the next federal election. It is called a carbon (pollution) tax and its purpose is to slow global warming.
There is no longer much scientific disagreement of the close connection between the emission of greenhouse gases and the inexorable rise in the earth’s temperature. Nor is there much disagreement that the burning of fossil fuels is the primary culprit. An essential part of a market-based solution must involve imposing a cost on those responsible for those emissions. The result would be a greater incentive to find ways either to reduce the burning of fossil fuels altogether or to continue burning them while preventing the toxic emissions from polluting the atmosphere. It’s simple. Tax fossil fuels and reduce global warming.
But that’s only the first half of the policy which will raise more than 15 billion in new taxes. The other half is that every dime of these carbon taxes will be returned to Canadians in the form of tax cuts and tax credits. So “the green shift” at one stroke creates the right incentives to reduce fossil-fuel use while not increasing the government’s tax take.
The richer we are, the more cars we own, the more air travel we do, and the more oil or electricity we use to heat our larger homes. So a carbon tax which raises the price of these products will collect more tax revenue from high-income households than from low-income ones.
Look at it this way. Imagine three income groups – low, middle and high – and suppose that the amount of carbon tax collected annually from the three groups is $3,000, $6,000, and $9,000 respectively. If there were equal numbers of taxpayers in each group, the government would then need to reduce income taxes by $6,000 for each taxpayer. The low-income households would clearly be better off while the middle-income group would see no change in their total after-tax income. Only the higher income households would be worse off because their income-tax reduction would be insufficient to cover their higher carbon taxes.
So a new Liberal government under Dion’s carbon tax would ensure that lower-income Canadians would end up the real winners. In addition, of course, to the environment.
Do you agree that climate change is happening?
Do you support Dion’s carbon tax?
Can any reasonable person be against such a task?