Christian Conservative Christian "Independent"

I'm an evangelical Christian, member of the CPC, but presently & unjustly exiled to wander the political wilderness.
All opinions expressed here are solely my own.

Monday, July 14, 2008

More shifty "Green Shaft" taxes

Been thinking more about Dion's proposed Carbon Tax, and his claims that it will be "revenue neutral". While they may try to technically make it revenue neutral, in returning every Carbon Tax dollar back to Canadians (though it will be returned to different Canadians than it will be collected from), the Liberals have been able to pull yet another fast one with their shift idea, that no one else seems to have picked up on yet.

The new Carbon Tax will apply to everything, and the costs of everything we buy will go up... that fact is indisputable. The Liberals keep saying, however, that their income tax reductions will offset the increases in prices due to the Carbon Tax.

BUT, the one thing they HAVEN'T, and likely WON'T point out, is that even if they return every dollar of the Carbon Tax to other Canadians, overall tax revenues will still rise as a direct result of the Carbon Tax... and they haven't, and likely won't, promise to return those new revenues to Canadians.

What do I mean? Quite simply, we know the cost of everything is going to go up. Thus, if prices on the products you buy have gone up, SO WILL THE CURRENTLY EXISTING TAXES, like the GST.

Think about it... say you buy a new DVD player. Due to the increased transportation costs, assume what used to cost $99.99 now costs $103.99. Before the Carbon Tax, the 5% GST on that DVD player was $4.99. After Dion's Carbon Tax price increase? $5.20... that's a $0.21 increase per $100 unit in tax revenue for all of Dion's new spending programs.

What about the taxes on fuel, both diesel and gasoline? Since we know the price at the pump will rise due to increased production and transportation costs, so will the Federal taxes, still further increasing the price at the pump.

Your home heating costs? Same deal... the GST will increase as the cost of the fuel increases, be it Natural Gas, home heating oil, or electricity.

Food? Well, in this area you're okay, because the GST isn't applied to most groceries... though their prices will have again increased due to the increase transportation costs alone, not to mention the increased markups required by grocers due to higher hydro prices.

And for one final example, what about that new Prius you're thinking about buying? You know, to "do your part" in reducing GHG. Well, including taxes, you're currently looking at $32602.20, of which $1,447.00 of that is GST. Since even the Prius requires the use of fossil fuels during it's production, and ALL of the materials involved are going to increase in price, those costs will be passed on to you, the consumer, in the sticker price. So what does that mean? Well, assume a modest price increase, all factors included, of just $1,000 in the sticker price. What does that mean in terms of the GST? Right off the bat, that's gonna be a $50 increase in GST revenues for Mr. Dion's Liberals.

Now stop and think about that a little further... in 2006, 1,666,327 new cars were sold in Canada. Even with a projected decrease in sales to 1.5 million units due to a slowing economy, at a mere $1,000 increased cost per unit (some will be more, some will be less), and the resulting $50 GST increase per $1,000 unit increase, that works out to an additional $75,000,000, that's SEVENTY FIVE MILLION DOLLARS, of increased GST revenues. And that's talking ONLY about new cars, forget about the increased costs on everything else.

What does this all mean? It means that Mr. Dion is still being a little shifty in his numbers when he says his Carbon Tax will be revenue neutral... in reality, the Liberals look to collect overall HIGHER tax revenues though the GST alone, due to the increased costs on everyday goods... amongst all the other taxes out there.

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  • At Tue. Jul. 15, 02:52:00 p.m. EDT, Anonymous Anonymous said…

    That is a very good point and one I haven't seen anywhere else.

  • At Tue. Jul. 22, 03:26:00 p.m. EDT, Anonymous Reefer Sutherland said…'s not a good point at all. Dion's plan will put money back in the pockets of people who need it, (yes those pockets will likely be different from the pockets of those who pay it, but isn't helping fellow Canadians what being Canadian is all about?), and the GST only is collected when and if you spend it. People have the choice to keep the tax relief Dion's plan would deliver.

    Besides that, virtually all economists favour a GST type tax over income taxes. Too bad Harper hasn't figured that one out yet.

  • At Tue. Jul. 22, 04:25:00 p.m. EDT, Blogger Christian Conservative said…

    So reefer, are you saying that you agree that Dion should re-raise the GST?

  • At Tue. Jul. 22, 08:42:00 p.m. EDT, Anonymous Reefer Sutherland said…

    I'm saying Harper shouldn't have cut it in the first place, and should have cut personal income tax instead, just like the majority of Canadian economists recommended.

    Then again, I'm not an economist, so what do I know.


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