Monday, February 1, 2010

Hidden agenda: Liberals will raise your taxes?

Apparently, MP Gerard Kennedy, the Liberal infrastructure critic supports tax hikes. Yes, there’s been some back-peddling on the part of Michael Ignatieff and other senior Grits, but from his comments it seems pretty clear that Kennedy would back an increase in federal tax. No one should be surprised, of course, as there is a significant number of members in the Liberal Party who, like Gerard Kennedy, would be very much at home in the NDP.

Socialists always believe in raising taxes, because they have no confidence in the ability of a free-market economy to create growth in our tax base. And they have no stomach whatsoever for cuts in government spending. As it happens, those are the very things that will help us get back to balanced budgets in about five years, without raising taxes.

The Liberals make a big deal over the fact that Employment Insurance (EI) premium rates will rise in the next five years in order to eliminate the deficit in EI created by burgeoning unemployment rates. It is a tax on jobs they claim. Apparently, the government should allow the EI program to run up massive deficits without any adjustment in rates.

However, when the program was running large surpluses under the Jean Chrétien government, the Liberals did not use the surplus to reduce EI premiums, but moved the surplus into general revenues. No talk from them then about tax on jobs—of course not.

The Liberals have already demonized the very notion of a budgetary deficit to such an extent we can be very sure they’ll use the current deficit as an excuse to raise taxes the very first chance they get.


  1. Yawn! Yawn!

    So true Mr. Campbell, but everyone should be aware by this time of the 2nd. law of politics 101:
    Tax Increases + Massive Increases in Social Program Spending = Liberal.

    Law No. 1 applies to all politicians:
    Politician + Tax Money = Corruption

  2. I take it then that you've dropped your "value added" defense for raising the sales tax?

    Value added to the treasury is more like it...

  3. I'm missing your point, Icemen.

    I've never defended raising taxes. I have supported a value added tax regime (GST/HST) over conventional consumption taxes such as the current PST.

    In my posts on the subject i think I consistently advocated a reduction in the rate of the Ontario portion of the HST to make it, at least, revenue neutral.

    Anyway, what's this got to do with the fed-Libs increasing taxes? Certainly you don't think the feds are raising our Ontario sales taxes.

  4. While most people are adverse to tax increases, it is important that a proper debate be raised about the deficit and the budget in general.

    Mr Kennedy has provided one possible solution, and for the economically illiterate, it makes a compelling narrative.

    However, other politicians and activists should raise other points (such as the numbers of jobs that tax increases will destroy, or jobs tax cuts will create). Alternative options like spending cuts to transfers can also be raised, for example, transfers to governments consume $48 billion (and many of these governments have resource revenues etc. so really don't need transfers). Subsidies cost the taxpayer @ $30 billion, and crown corporations cost about $8 billion per year, so there is lots of fat without starting on transfers to people ($61 billion/year), which is political suicide.

    The virtuous circel effect is cutting transfers and attacking the debt would reduce the $30 billion/year carrying costs of the debt, which can be translated into a job creating general tax cut.

    Even the mechanism of taxation can be debated, our tax system is so complex it is estimated that $3 bilion/year is spent on filling out tax forms. A "Single tax" would eliminate a big drag on the economy and create about 60,000 jobs.

    So let the debates begin, and say "thanks" to Mr Kennedy for opening the floodgates.