Tuesday, April 14, 2009

Ignatieff Says the "T" Word

I just did a post on political candor, and I'm going to applaud Ignatieff for stating the obvious here:
Tax hike likely unavoidable, Liberal leader says


Ignatieff’s comments were in response to a question from Cambridge business leader John Bell, who wanted to known when the federal debt will be paid back.

“We will have to raise taxes,” but not at the expense of hurting the recovery from this recession. He added that “an honest politician” cannot exclude a tax hike as an option.

“I am not going to load a deficit onto your children or mine,” Ignatieff said.

His speech centred on the need for the federal government to unite people rather than divide them during these trying economic times.

Oh, can't you just hear the "buzz" at the Conservative war room?

Truth be told, there is an inherent risk in being so forthright. Given the economic uncertainty, I'm sure you could manufacture some argument to suggest future prosperity that would avoid tax hike necessity. In terms of short term political calculus, I suspect it would be easy to avoid any talk of a potential tax hike (look at how all three parties denied a deficit in the last election, even though the math was abysmal), especially when the very mention is considered political quicksand.

"We will have to raise taxes", there's you attack ad soundbite, there's your risk. Funny thing, and I may be completely naive here, but I think Canadians will appreciate some "straight talk". This country has been down the deficit road before, we know how it works, and there's a pretty simple equation to counter. Unless we are all fine in burdening our children with massive debt, undoing all the hard work to get us into relative fiscal health, Canadians might be prepared for some frank discussion.

There is a way to pivot, turn this tax issue as a testament to a new kind of leadership, a new honesty, which is something we surely crave. Does the old paradigm still exist, wherein talk of taxes is to be avoided at all cost, wherein any mention is seized upon to bludgeon the fool who raises them or says he will? The Conservatives surely think so, because the first hit piece on their site revolved around Ignatieff's musing on a possible GST hike. I'm not so sure anymore, I think we're in a very sober period, wherein people might look past the most obvious, base argument.

Of course, we'll have to see what Ignatieff means, and if he can weave the possibility into our argument, without being seen as a drag on the economy, at the worst possible time. Apart from that, even critics must have a tinge of respect, when someone volunteers the "T" word, especially when it might not be good politics, but correct conclusion.

12 comments:

Gayle said...

Frankly, I am relieved. It is pretty obvious that a tax hike will be necessary to get us out of the hole Harper put us in. I am sure we would have had to run a deficit anyway, but the mindless tax cuts he has implemented have hurt us.

I hope Iggy raises the GST. He should put it up to 10% and call it the "Harper tax".

Jim said...

What you are saying is roughly similar to what you said about the carbon tax when it was FIRST introduced no, people would understand, have a certain kind of respect for "straight talk" right?

Yet now you say THAT (carbon tax) is political suicide, while this is ok? In reality the kind of a tax hike needed to combat the deficit (most likely a 1% raise in the GST at a minimum) is actually going to be much more costly to people's wallets than a $10 a ton carbon tax would have been. But I guess it doesn't sound as bad as "tax on everything".

Meanwhile Gordon Campbell is on his way to re-election with a carbon tax that was more painful that Dion's (at the pump AND everywhere else). Just unfortunate the way things turned out federally since we both know that was the right approach, perhaps just didn't have the right messenger.

I HOPE you are right on THIS front with the tax hike at least because it's pretty obvious it's needed, but it's also pretty obvious cap and trade is going to be a failure that won't be launched for at least 5 years (at a minimum!), so unless one has their head in the sand if we want to do anything more than lip service to the environment we need to do that too (Which is why the environmental movement is absolutely massacring the NDP in BC for trying to tear down the carbon tax there). I just hope it's not more than 5 years before we realize that cap-and-trade isn't going to fly and a carbon tax makes more sense and is MUCH easier to implement at the SAME cost to people's wallets. Oh well, I can dream I guess...

Oh well, while I'd rather see both a hike in the GST AND a green shift (cut income taxes, implement carbon tax), I'll settle for one in the short-term.

Joseph said...

I agree there is a danger, but it is a good way of focusing on "Harper's deficit." If these words become an attack, it can get turned right back into a direct question of "How do we solve the 'Harper's deficit'?"

Sort of like bringing up Mulroney smart.

Not only is that smart politically, it bears the enviable mark of being absolutely true. I don't want the next election, whenever it comes, to be about nothing. I want it to be about direction and vision. And part of that vision has to be answering how do we climb out of the deficit situation we are in?

Harper would rather just pretend it doesn't exist. The moment he attacks Ignatieff on this, the discussion he'd rather not have will begin (if the Liberals are smart).

I have growing confidence the Liberals have the smarts this time to lead the discussion, rather than simply stumble through in a sporadic defensive posture.

Steve V said...

"Yet now you say THAT (carbon tax) is political suicide, while this is ok? "

Jim, you're making a false, superficial comparison. The carbon tax is political suicide, given what just happened, how it was framed, who it's associated with. The timing for re-introduction is dreadful, and I say that with some resignation, because I think it's the best plan. The Campbell comparison isn't a good one, because he brought it when he was already elected, didn't have to face immediate, gutteral reactions. At least now, people have seen that this tax wasn't the end of the world, although it sure seems to be the centerpiece NDP argument, so it's still quite controversial.

You're quite right, I said pretty much the same about the carbon tax, when we first introduced it. However, this whole concept is far less complicated than that discussion, it's a simple balance sheet issue, not a massive restructure. I suspect the Cons will see it in the same way, and initially it looks like an opening. My read of the mood is that intellectually bankrupt attacks might not work in this environment. We'll see...

Steve V said...

"I agree there is a danger, but it is a good way of focusing on "Harper's deficit." "

Agreed. While there's a risk, it does re-introduce the whole discussion of how we got here, the government's poor decisions.

A BCer in Toronto said...

The simple fact is we won't grow our way out of this deficit. Private sector forecasters and the parliamentary budget officer agree Jim Flaherty's go-forward revenue projections are grossly optimistic. Harper isn't being honest with us about the challenges ahead.

If we're going to get back into the black after this economic storm passes, then there will either need to be tax increases, program cuts, or some combination of the two. I give Ignatieff credit for saying the politically unpopular: we'll need more revenue, ie. taxes.

Harper owes Canadians some honesty here too. Where's his real, realistic plan for dealing with this deficit. If he says tax cuts are a no-go, what specific programs does he plan to cut to balance the books?

Harper denied the need for a deficit until the end. He denied there would be a recession until we were already hemorrhaging jobs. Instead he talked about buying opportunities. Instead of bringing in stimulus in the fall, he played political chicken -- and nearly lost. So it's no surprise he's not being honest with us now either.

ottlib said...

The Conservatives do not do nuance. They do not do truth.

As well, the Green Shift debate should clearly demonstrate that Canadians cannot or will not look past the most simple explanation offered them.

As for the electorate appeciating candor and honesty, ask Paul Martin how that worked out for him.

The next election is going to be fought during a recession so any talk of tax hikes is a non-starter.

The Green Shift debate also demonstrated that there is no way to suger coat a tax hike. You can blame Mr. Dion for the failure of that plan but I would suggest that Mr. Ignatieff would not be any more successful overcoming the resistance to a tax hike.

Put all that together we can only conclude that Mr. Ignatieff did not do himself or the Liberals any favours with his candor.

Steve V said...

Both on air Conservatives today jumped all over this statement. If this "honest" assessment is our policy, we had better get our messaging straight immediately. Part of the problem with the carbon tax, we were late to the frame game.

ottlib

The only difference here, this is actually a very simple equation. I can tell you, from going door to door, that people had a very hard time understanding the carbon tax. That policy was simple in one sense, but when people tried to comprehend what would be taxed, what wouldn't, were the money would come back, it was a tough sell. Deficits and burdens on our children are known quantities, not sure the comparison is completely apt here.

Steve V said...

Already on the Conservative website:

http://www.conservative.ca/

Kris said...

Man, they really don't waste any time, do they?

Also, I think I figured out that goofy "CPC Energy" face they use. I think he's supposed to be the "freaked out" roommate. Even then, it's hard to imagine who thought that photo was a good idea.

Steve V said...

That photo has been on the site for years. Strange.

They are fast, and we have to be just as nimble.

burlivespipe said...

I see the double-edged sword in this. It has instantly become the tag for which our opponents will carry, distort, retort and recycle ad nauseum to drown out any true discussion, as they did about the green shift.
If you look at the presidential election, you had two fairly bright people who were running campaigns based on 'accountability' and 'responsibility'... yet neither saw that obvious honesty could get them into the White House. Either they were dishonest or ideologically naive. So now this is something to be tested on. I hope he doesn't flinch, doesn't do the politically expedient thing and back away; if he continues to build on the context from what I understood, that raising taxes must be on the table once the recession is over, to help erase a deficit which could very well become a systemic issue and drain on our potential.
But we first have to be able to handle the onslaught of CON fabrication. Here it comes...