Dion Defends Carbon Tax

So yesterday the Liberals finally released some of the details of their carbon tax plan. The key to it is offsetting income and corporate tax cuts of $15 billion. Stephane Dion claims that the Liberal plan will be "good for the environment and good for the economy — good for the planet, good for the wallet." He also pledges that under his plan the Auditor General will examine the numbers every year to ensure that the tax remains revenue neutral.

This is ridiculous. A carbon tax must, in order to be effective, have an impact on the bottom line. By making the tax revenue neutral, that impact on the bottom line is eliminated for all but the poorest of the poor. The middle class will see something approaching neutrality, and the upper classes will actually get extra money from the tax cuts. The addition of corporate tax cuts to the package simply reinforces the fact that Dion's plan will accomplish nothing but a wealth transfer from the poorest of the poor to the richest of the rich. Dion's plan is much more along the lines of from each according to his inability and to each according to his excess wealth. Dion is camouflaging a massive give away to the capitalist class as a measure to protect the environment.

Dion claims that his plan will price carbon in the first year at $10 per tonne, and rise to $40 per tonne by the fourth year. This is not nearly fast enough. The NDP's cap-and-trade plan will auction carbon quotas, with a floor price of $35/tonne in the first year. Dion further claims that the cost to the "average" home (without specifying what makes an average home) will be about $225-250 per year. That is a lot of money for some families, particularly those in the lowest tax brackets, even if that number accurately reflects the cost. There will also be many poor families living in rural areas who have to pay much higher added costs, for example struggling farm families who need to fuel their tractors.

The specific breakdown in the income tax cuts is as follows:

• Tax Bracket 1 (first $37 885 of taxable income) - 1.5% cut
• Tax Bracket 2 ($37 885 - 75 769) - 1% cut
• Tax Bracket 3 ($75 769 - $123 184) - 1% cut

It is totally counter to the spirit of a progressive taxation system to see tax bracket 3 get the same percentage cut as tax bracket 2. This is yet another step towards flattening the tax system.

The Liberal plan also does nothing to help Canadians make the switch to zero-carbon or low-carbon lifestyles. Because of "revenue neutrality" there are no additional funds to pay for beefed-up public transit, subsidies for the purchase of ultra-low emission vehicles, the development of green renewable energy generation or the retraining of workers in fields that will be adversely affected by any shift in consumer behaviour. Though I suppose that isn't really an issue, since this plan won't produce a shift in behaviour, since it won't negatively impact the bottom line for anyone but the poorest of the poor. And I'm pretty sure the Liberals don't want it to have much of an effect either. After all, they were in power for years after signing the Kyoto Protocol, and sat on their hands while emissions went up and up. Liberal green-washing is just as pathetically transparent as the green-washing the the oil companies are trying to do. I hope that Canadians have the sense to see through it. No, the Conservatives aren't any better, but they really aren't much worse at this point.

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