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Green Shift doesn’t go far enough

Canadians by now have thrown in the towel on Stephane Dion. For months the nebbish Liberal leader has endured a barrage of attacks on his persona, his speech, and his alleged intent to “screw everybody” with a carbon tax. Anyone who holds a shred of hope for him must feel in pretty light company.

There’s a simple reason for this: Canadians are lazy. They don’t want to investigate the intricacies of Dion’s ideas because they’re so used to the force-fed simplicities of Stephen Harper’s campaigning. For Harper, an oil splotch and a pooping puffin is the best way to get a message out. And Canadians are lapping it up, if any recent poll is an indication.

If our leaders are going to debate each other, Canadians deserve to see them do it in an intelligent manner that goes beyond offensive Flash animations and one-liners that sound good in news stories. And since our Prime Minister is incapable of doing that, I’ll gladly step up to the plate and take on Dion’s “Green Shift.”

The philosophy behind the Green Shift is fairly simple: new taxes on fossil fuels such as diesel and propane are offset by cuts to revenue sources such as income and corporate taxes. As the Liberals put it themselves, “the federal government does not increase its revenues through a new tax.” Theres’s nothing punitive about it, if Mr. Dion is to be believed.

There is, however, a serious problem at the heart of this plan: does it really go far enough?

Carbon taxes, by their very nature, should be punitive. They work in a manner similar to the Goods and Services Tax (GST): with GST you’re taxed on anything you take out of the economy, with carbon taxes you’re taxed on anything you put into the atmosphere.

The whole point behind a carbon tax is that you be punished for pumping dangerous fossil fuels into the air. Under Mr. Dion’s plan, however, you’re almost rewarded for it.

The carbon tax will fund an ambitious set of tax cuts as part of the plan. They include cutting the lowest income tax rate from 15 per cent to 13.5 per cent; middle class tax rates from 22 per cent to 21 per cent; annual credits of $150 to rural Canadians; and a $350 universal child tax benefit on top of all other existing child benefits.

The Liberals call this a “shift,” meaning the taxes will simply be redistributed from income to carbon. But in order to make it revenue-neutral and carry out all the tax cuts they plan for, people would actually have to keep on polluting in order to ensure the government makes the money it needs to make the necessary cuts. That’s very risky if they intend to maintain a fiscal balance.

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