Sunday, May 25, 2008

Economist Weighs In On Dion's Environmental "Plan", Slams Harper, Slowly Debones Layton

Probably best not to call it a "tax", though not really a plan yet, either, just the shadow of one. But whatever. Stephen Gordon is a professor of economics at l'Université Laval in Quebec City, Canada. Its all a good read, but he is especially cutting with respect to Jack Layton's reaction.

On Jack's support of "cap-and-trade" over a carbon tax:

As far as the consumer is concerned, cap-and-trade will have exactly the same effect as a carbon tax, namely, to increase prices. The only potential difference is who is on the receiving end of that extra spending: with a carbon tax, the government gets the money, and with cap-and-trade, that money is rent for those who own the permits. If the permits are auctioned off by the government, the two programs are essentially equivalent.

How true, how true.

On Jack's claim that "big corporations" should bear the lion's share of Canada's climate-change tab, and that there should be a federal ombudsman should ensure those costs aren't passed on to consumers.

Could someone please explain to Jack Layton that corporations don't pay taxes? Only people pay taxes, and corporations are not people. And the people who pay corporate taxes are not the owners of the corporation, either: the people who really pay those taxes are workers (in the form of reduced employment opportunities) and consumers (in the form of higher prices).

The Liberals and Conservatives understand this point. The CPC is targeting the people who don't want to pay those costs, and Stéphane Dion is going after those who do. The NDP's niche appears to be voters who want someone else to pay the costs of reducing greenhouse gas emissions.

Also true, but I think Jack Layton does understand this. He also understands that a federal ombudsman can only ensure that costs are not passed on to consumers is if he has secret magical powers. Jack is simply pandering to the common sentiment: Don't tax me, don't tax thee, tax the man behind the tree.

By the way, Mr. Gordon's blog title, "Worthwhile Canadian Initiative", is considered by some to be the "most boring headline that could possibly be imagined". Quite clever, in this context.


Robert McClelland said...

You're glossing over the major difference. A cap and trade system will set real limits on the amount of ghg emissions that can be released. A carbon tax will not.

J said...

And manufacturing that departs to US, China, India etc. wont emit ghg here. Voila, targets are met.

Robert McClelland said...

That's basically what happened in Denmark, j, when they introduced their carbon tax. They outsourced their power generation to Sweden and Germany in order to reduce their ghg emissions.

Fred said...

Dion's Magic act

" If the Liberals have invented a new tax that is a more efficient redistributor of wealth than income taxes, one that will not only reduce social in-equality but, as Findlay also promises "help the middle class," for the same amount in overall taxes we now pay, while simultaneously reducing "pollution ... smog and waste" then we are left with another logical question.

Why didn't they bring it in during the 12 years they were in power from 1993 to 2006, regardless of the issue of greenhouse gas emissions and global warming?

Martha Hall Findlay is a highly accomplished and intelligent individual, as indeed, are many Liberals, including Stephane Dion.

For that reason, one must ask: Why have they substituted magical for logical thinking? "

Ti-Guy said...

Lorrie Goldstein. 'Nuff said, Fred-tard.

Steve V said...

What ti-guy said. The guy writes three columns, Gore bad, anti-global warming, Dion bad, rinse, repeat. ZZZZZZZZ.

As an aside, he and I have had some great email exchanges. Much fun :)

jaybird said...

BCL: the argument that cap and trade will cost the workers in reduced employment is the standard argument used by the right wing to argue against any and all regulation, unionization, etc. I heard this argument this very morning coming from the mouth of John McCain's economics advisor.

There are ways to discourage corporations from leaving the country. For example govt can decide to only provide tax benefits to companies that commit to employment targets. Govt can also institute carbon related tariffs on imported goods.

These are some of the ideas that have either already been implemented in other jurisdictions or are being considered.

The NDP can also line up economists that favour cap and trade over carbon tax.

Ti-Guy said...

The NDP can also line up economists that favour cap and trade over carbon tax.

Well, of course it can. You can line up an economist to say anything you want.

At some point, you make a choice, win an election and move on.