The tax-and-spend Grits are at it again with Liberal leader Michael Ignatieff suggesting the federal government could have to raise taxes to rein in the country's debt. Mr. Ignatieff tempered his suggestion somewhat by conceding that federal taxes will not be hiked at the expense of hurting the economic recovery.
In response to a question at a meeting of the Cambridge Chamber of Commerce, Ignatieff said “an honest politician” cannot exclude a tax hike as an option to dealing with a deficit. Then in typical gobble-gook fashion that is so popular with the Grits, Mr. Ignatieff's press secretary later said the Liberals have “no plan and no desire to raise taxes” during a recession.
They just do not get it: taxes are a drain on the economy and a killer of jobs and economic growth, not to mention a cruel abuse of power.
Long before the issue of raising taxes arises, there needs to be a serious cut back in government expenditures—raising taxes is absolutely the last resort for any government, but no one is ever going to convince the Grits of that.
When the economy does recover—and it will—government expenditures will also recover and much of the deficit will disappear. If the deficit remains stubbornly high, then the federal government will need to reduce its expenditures to match its revenues. Or better yet, cut taxes to further stimulate consumer spending and business investment, which in turn will lead to higher revenues.