Dion's "Tax Shift" - A hole big enough...

...to drive a Prius through.

Garth shared some thoughts this morning on Dion's soon to be announced "Tax Trick"... but if you stop and think about it for even a second, it contains a fatal flaw.

"But as the Lib leader will confirm soon, the Green Shift is exactly as we suggested. A total of $15.5 billion in personal, family and business taxation will be wiped out, replaced with an equal amount of tax on the emitters of pollution. The new price on carbon will make fossil fuels (but not gasoline) more expensive, and raise other consumer prices a modest amount over four years. This is for the goal of cleaning up our environment and finally addressing climate change."

Here's the question... [drumroll please...]

What happens when emitters start reducing their emissions? Amm, the amount of taxation that Ottawa takes in will begin to drop. Of course, then the carbon taxes will go up, which will make things more expensive for businesses, which will drive further reductions, which will further decrease revenues.

Eventually, they're going to reach a critical mass, where they can't increase the carbon tax any further, but will be faced with dropping revenues. So the question is, what do they do then? Well, the only means they'll have will be to re-increase personal income taxes.

Now that will be an interesting little tax trick...