2009-07-05

Must You Promise To Lower Taxes To Get Elected?

I find it troubling that politicians pledge to lower taxes when times are good or bad, when the government runs surpluses or deficits. The only election in recent memory electing a party that pledged to increase taxes was the 2009 BC election. But the Liberal Party platform included lower income taxes and corporate taxes. In fact, the text had this grim warning:

http://media.canada.com/f0a33a90-eb4b-4f3b-9fa9-91cf4d82d6fa/1022campbell.jpg"During these turbulent economic times, our economy can ill afford higher taxes, higher costs and more uncertainty under an inexperienced NDP government. The Opposition’s reckless and irresponsible policies and promises will kill confidence and will put our province in an even weaker position than it was in the 1990’s."

The Government intended to raise its carbon tax as part of a multi-year plan to do so at its inception in 2008. Interestingly, you know the only time the carbon tax was mentioned in the Liberal Party Platform? In a quote attributed to Vancouver Mayor, and former NDP MLA, Gregor Robertson. Certainly no accident there. Minimally lower income and corporate tax, and tout the fact in inch-high letters, then attribute praise for a modest tax increase to the enemy camp.

http://newsaura.files.wordpress.com/2009/04/paul-krugman.jpgMaybe the answer to the question posed in this post's title can be found in the response of Paul Krugman to Fareed Zakaria in a recent episode of Global Public Square (at 6:28):

FZ: What's wrong with the argument that, if what you're trying to do is produce a rapid increase in purchasing power, that a tax cut--a permanent tax cut--would actually deliver it faster?
PK: Uh, gee, so we do a permanent tax cut every time the economy is weakening, and now what do we do when the economy is strengthening? Have a permanent tax increase? But, then, in that case, it's not...--There's a logical problem here. You can't have a ratchet where you always cut taxes and never raise them. Eventually we end up with no government at all, which is, I guess, some people's goal, but you can't do that.


It certainly appears to be the objective of the Stephen Harper's neoConservative Party to slash the government along with taxes and revenues. Now Harper wants to have his cake and eat it too. He will cut taxes, cut revenues, cut the government's levers for inluencing the economy, for the sake of his ideology. He will spend on a stimulus package, spend on an auto bailout, spend to expand his Cabinet, spend Canada into the largest deficit of its history, all the while blaming the Liberals for making him spend, and collecting accolades from those he spent the money on.

Diabolical.

A footnote: Which party was in power when Canada's last record deficit was posted? The Progressive Conservative Party in 1992/93, with a deficit of $39b. Flaherty, Harper, and his neoCons shatter the previous record with a deficit now projected for $50b.

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