Wednesday, October 24, 2007

Economists Pan Conservatives Tax Policy

I'm not sure you can make an anti-GST cut argument politically attractive, but clearly the Liberal position on the government's flashy tax policy finds foundation here, in a big way:
The Conservative government's plan to trim the GST for a second time has been soundly rejected as a top tax-cutting priority by a large group of economists surveyed by The Globe and Mail.

All 20 economists said other tax cuts would be better for the country than trimming another percentage point from the goods and services tax, which represents more than $5-billion in revenue.

It's a remarkable show of unanimity on public policy, given that the responses were from organizations as diverse as the Fraser Institute, the Canadian Auto Workers, Canadian Manufacturers & Exporters, Bank of Montreal and the Halifax-based Atlantic Institute for Market Studies.

Mr. Drummond and others have plenty of ideas about where that $5-billion could go.

Personal and corporate income tax reductions, “if properly structured,” would be one, he said. Another would be reversing the earlier GST tax cut and shaving every Canadian's marginal personal income tax rate by two percentage points.

All told, 16 of 20 respondents to The Globe's survey called the government's announcement to cut the GST a bad move, while two said it was irrelevant and two said it would be good for the economy.

The Conservatives have the easy soundbites to deflect any criticism of their tax policy. The only way the Liberals make an impact is if they hammer the point at all turns, and the media does something extraordinary- give Canadians a meaningful discussion, beyond the obvious spin. That said, when you have such universal opinion amongst economists, it provides powerful backing for a somewhat counter-intuitive political position.

5 comments:

burlivespipe said...

This is the kind of meat we've got to put on the table -- with so many varied, including supposedly conservative-minded, opinions -- to present this type of framing while promoting and also reminding that Liberals were the last big tax cutters.
We've got to get that word out, while also putting some silverware on the table. Although your tax cut plan is likely to be one of your better election-timed proposals, it can be teased with some other economically enticing ideas, like the corporate tax plan, plus something on R&D, and maybe a scaling of the EI deductions. Maybe there is a plan (and a hope) afterall...

Anonymous said...

In other words - they actually approve the Liberal plan don't they.

The NDP get all bent out of shape over tax cuts, especially corporate. Can you just imagine what our taxes would be if the NDP were government and implemented their policies - ugh.

Mushroom said...

However, running an election on a tax plan can have drawbacks.

Remember, Stockwell Day's flat tax?

Anonymous said...

The gst should be cut, and corporate taxes, and income taxes.

Steve V said...

"However, running an election on a tax plan can have drawbacks."

The trick is arguing against a GST cut, a tax which people HATE. Harper has put appearances above a sound tax policy, because they have concluded that it's a winning argument. As burl said, the Liberals need to hammer the point, in unision, over and over, and then it might stick.

"In other words - they actually approve the Liberal plan don't they."

Exactly :)