Should Gas Taxes Be Lowered?

[HisSelf]

If you lower gas taxes, you will encourage consumption. Where will that get you?

[jdobbin]

How do you draw in an additional $17 billion without raising taxes on gas?

The Mintz proposal was to broaden the energy tax without increasing fuel taxes.

Are taxes on home heating oil and natural gas going to rise enormously to bear the full burden? Will we have people freezing to death in their houses because they can't pay for heat? The price of natural gas has already doubled in the last year, and heating oil has gone up almost as much. Add a huge new federal tax onto it and you're asking for trouble.

Why? You'll just be paying it all out in gas taxes. The Liberals don't pretend this is going to make you any better off.

Coupled with income tax cuts, this will be revenue neutral.

Maybe it's simply that you like the SOUND of it. IE, another Liberal policy which is designed for its optics, not to actually do anything of value - much like the long gun registry, for example.

Actually, the proposal came from a right wing institution which if the Tories had embraced it, I would have supported.

I never supported the long gun registry as it had been proposed. It was too controversial and encompassing and I didn't see how a registry could be run so cheap when it sounded like a lot of work. I had supported gun owners listing their weapons on their Firearms Certificate which they would have kept on their person. No registry would have been required.

Broader taxes are easier to administer and with a corresponding income tax cut, I think it makes better sense revenue-wise.

Edited May 8, 2008 by jdobbin

[Michael Bluth]

The Mintz proposal was to broaden the energy tax without increasing fuel taxes.

Coupled with income tax cuts, this will be revenue neutral.

Broader taxes are easier to administer and with a corresponding income tax cut, I think it makes better sense revenue-wise.

How could a revenue neutral tax change make better sense revenue-wise?

[Wilber]

You have to remember that a tax being revenue neutral only refers to the governments income, not the citizens. When it comes to those being taxed there are alway winners and losers no matter how it is done. If a person doesn't live in an area, or makes their living in a field that has options which allow them to compensate for the tax structure being imposed, they lose. It is an attempt a social engineering, not tax fairness.

[Argus]

You have to remember that a tax being revenue neutral only refers to the governments income, not the citizens. When it comes to those being taxed there are alway winners and losers no matter how it is done. If a person doesn't live in an area, or makes their living in a field that has options which allow them to compensate for the tax structure being imposed, they lose. It is an attempt a social engineering, not tax fairness.

Yes, as I said. Grannies in their old homes in the suburbs will get screwed while well-off people in condos in downtown toronto will see their taxes go down.

[JB Globe]

1 - End subsidies to the oil and gas industry - no one can argue they need the money anymore. Or else to be fair we should start subsidizing the gold and diamond industry as well.

2 - Get rid of the gas tax and replace it with a carbon tax, with the money dedicated for carbon-reduction schemes like transit (which should get most of that money) improvements to the freight-rail system, and other initiatives.

3 - Use the carbon tax to pay down the cost of things like transit passes.

4 - After years of investment in transit through the carbon tax (say, 5-10) when most Canadians have an alternative to taking their car to work, and most businesses have another option than trucking their products long-distance to market, than start raising the carbon tax so that it acts as a real inhibitor.

5 - Offer rebates on the carbon tax or do away with it altogether in areas where driving is a necessity (remote/rural areas).

[HisSelf]

If you lower gas taxes, you will encourage consumption. Where will that get you?

Ah-hah. No come-back. The 900 pound gorilla. Get a windmill...

[Topaz]

If you type in Carbon tax and go to www.wikipedia.org they have the tax rates all worked out for nat.gas, coal, electricity, gasoline, diesel and jet fuel.

[eyeball]

1 - End subsidies to the oil and gas industry - no one can argue they need the money anymore. Or else to be fair we should start subsidizing the gold and diamond industry as well.

2 - Get rid of the gas tax and replace it with a carbon tax, with the money dedicated for carbon-reduction schemes like transit (which should get most of that money) improvements to the freight-rail system, and other initiatives.

3 - Use the carbon tax to pay down the cost of things like transit passes.

4 - After years of investment in transit through the carbon tax (say, 5-10) when most Canadians have an alternative to taking their car to work, and most businesses have another option than trucking their products long-distance to market, than start raising the carbon tax so that it acts as a real inhibitor.

5 - Offer rebates on the carbon tax or do away with it altogether in areas where driving is a necessity (remote/rural areas).

These all make a lot of good sense and I'd support them, especially the last item.

Edited May 8, 2008 by eyeball

[Riverwind]

These all make a lot of good sense and I'd support them, especially the last item.

Very few urban centers have transit service that is adequate for people who need to get between suburbs. Almost all transit is focused on getting people in and out of the downtown areas. In greater Vancouver a 20 min trip by car can take up to 2 hours because of all of the bus transfers. The issue exists within the surburbs too because many workplaces tend to be in poorly served industrial parks that are on the edges of the city.

Energy prices are going up no matter what the government does. I see no need to make the adjustments more painful than they need to be by punishing those who can least afford them.

[kp186]

The trick here is to make the guv'mint more accountable as to how tax revenue is spent. An even harder job is to get Canadians off their complacent asses and actually start caring about what the government does. The one thing that disturbs me is how NO ONE is talking conservation. I'm still seeing commericals for pickup trucks with big V8's and I still hear people talking about how they NEED all that power. I think passenger cars should have strict limits as to how much torgue their engine can provide with no exceptions. I also think that rather than removing the tax from gasoline they should remove the sales tax from fuel-efficient cars and tax the hell out of the big ones. If you HAVE to have a Hummer or a pickup with the power of a jet airliner then you should pay maybe a 50% sales tax on it. One sure way to lower the price of a barrel of oil is decreased demand.

[WIP]

Very few urban centers have transit service that is adequate for people who need to get between suburbs. Almost all transit is focused on getting people in and out of the downtown areas. In greater Vancouver a 20 min trip by car can take up to 2 hours because of all of the bus transfers. The issue exists within the surburbs too because many workplaces tend to be in poorly served industrial parks that are on the edges of the city.

Energy prices are going up no matter what the government does. I see no need to make the adjustments more painful than they need to be by punishing those who can least afford them.

I'm amazed how many believers in the "invisible hand" that manages the free enterprise economy, miss the lesson that you get more of what you subsidize and less of what you tax! Using these principles, if we cut taxes on gasoline, all we are doing is helping to further subsidize a wasteful system that made urban sprawl economically viable!

Stop subsidizing the building of new highways and shift the money to urban transit and you may have something workable like the transit systems in Europe! At the same time, eliminate the dodges that allowed SUV's to be classified as trucks so they didn't have to meet tougher emission and mileage regulations on passenger cars. The truck category should be for real trucks used by farmers and tradesmen who actually use work vehicles; not for driving the kids to soccer practise! Any idiot living in a city who buys a Hummer or some similar vehicle that gets about 10 mpg., isn't paying enough for gasoline, and if oil climbs to $200. a barrel, as predicted by analysts at Goldman-Sachs, that ought to provide enough incentive to get these stupid, oversized vehicles off of city streets!

[Keepitsimple]

The Mintz proposal was to broaden the energy tax without increasing fuel taxes.

Coupled with income tax cuts, this will be revenue neutral.

Actually, the proposal came from a right wing institution which if the Tories had embraced it, I would have supported.

I never supported the long gun registry as it had been proposed. It was too controversial and encompassing and I didn't see how a registry could be run so cheap when it sounded like a lot of work. I had supported gun owners listing their weapons on their Firearms Certificate which they would have kept on their person. No registry would have been required.

Broader taxes are easier to administer and with a corresponding income tax cut, I think it makes better sense revenue-wise.

Don't drink the Dion Cool-Aid. Being revenue-neutral wrongly assumes that it will have no effect on the economy and therefore the Government will collect just as much tax....but in fact this is where it gets complicated. If the cost of fuel and energy goes up, Canada's product costs go up and we lose out to foreign countries (i.e. China, India) who will not have carbon taxes. In order to make it all work in the Global economy, there would have to be a confusing array of tarrifs and penalties to offset this problem. Do you really think that countries can work together in a matter of months to resolve these issues? In the meantime, our competitiveness takes a hit and government revenues go down......so where do you think the carbon tax revenues will go? Straight into the government coffers with some sort of mealy mouth explanation as to why they can't give it back to individuals and companies. The National Post put it better than I could: "There are issues of trade, tax fairness and effectiveness, not to mention the black hole of unintended and unexpected consequences."

I agree with a previous poster - Liberals might promise it - but they'd never implement it - if they could actually figure out how to implement it. At $126 for a barrel of oil, it seems that the free market is doing a pretty good job of cutting back on at least that one area of fossil fuels.

Edited May 10, 2008 by Keepitsimple

[JB Globe]

Very few urban centers have transit service that is adequate for people who need to get between suburbs. Almost all transit is focused on getting people in and out of the downtown areas. In greater Vancouver a 20 min trip by car can take up to 2 hours because of all of the bus transfers.

It's the same thing in Toronto, transit development has been lagging in general, but almost nothing has been done to link all the suburbs together and as a result it can take you 2 hours to travel from a western suburb to a northern one.

In the city it's getting better, there are 5 new east-west and 2 north-south high-speed light rail lines that will be built outside the downtown core that will service the "inner suburbs" inside the actual Toronto city limits. Right now you have to ride buses that have no bus lanes and it usually takes an hour or more to go anywhere within the inner suburbs.

They have the room to develop inter-suburb transit - there's plenty of hydro corridors with room to build a bus-only road, light rail or another Go track on. I've always though that Go should build a big transit hub at Pearson airport that connects to all the suburbs and downtown, something like they have in Amsterdam.

[Oleg Bach]

It's the same thing in Toronto, transit development has been lagging in general, but almost nothing has been done to link all the suburbs together and as a result it can take you 2 hours to travel from a western suburb to a northern one.

In the city it's getting better, there are 5 new east-west and 2 north-south high-speed light rail lines that will be built outside the downtown core that will service the "inner suburbs" inside the actual Toronto city limits. Right now you have to ride buses that have no bus lanes and it usually takes an hour or more to go anywhere within the inner suburbs.

They have the room to develop inter-suburb transit - there's plenty of hydro corridors with room to build a bus-only road, light rail or another Go track on. I've always though that Go should build a big transit hub at Pearson airport that connects to all the suburbs and downtown, something like they have in Amsterdam.

They think if you raise gas taxes that it will diswade drivers who are addicted to the car..this makes about as much sense as getting the poor off of nicotine by charging them 10 bucks for a pack of 1 dollar smokes..addictions are addictions and all that happens is that the public is gouged and the addict will pay..tax on tobacco for instance just creates protein starved poor people..who will continue to smoke and eat lower quality food which makes them more stupid and will continue to generate even more poor people unable to think clearly..the "greening" guys who say that taxing gas is helpful are just as delluded..the car addict will do without what is truely neccesary and continue to drive and eventually feed the family craft dinner..rather than give up the huge status bound SUV..tax all you want and gouge all you want..all wealth comes from selling things that are addictive - welcome to the brave new world folks -

[M.Dancer]

In the city it's getting better, there are 5 new east-west and 2 north-south high-speed light rail lines that will be built outside the downtown core that will service the "inner suburbs" inside the actual Toronto city limits. Right now you have to ride buses that have no bus lanes and it usually takes an hour or more to go anywhere within the inner suburbs.

I live on one of the new lines and I can say it is a total bust. I had high hopes for the St clair line but the reality is it has congested the street and has cut down the commute ttime by maybe...maybe 2 minutes. On top of that the ultra modern platform from design flaws....the glass roooves shattered during the winter cold....

A collosul waste of our money courtsey of David Miller....

[Oleg Bach]

I live on one of the new lines and I can say it is a total bust. I had high hopes for the St clair line but the reality is it has congested the street and has cut down the commute ttime by maybe...maybe 2 minutes. On top of that the ultra modern platform from design flaws....the glass roooves shattered during the winter cold....

A collosul waste of our money courtsey of David Miller....

I see the Go-trains come in and out of Toronto - big machines....big train empty most of the time and subsidized by the tax payer - totally stupid..the train coming south is semi-full in the morning - then it goes back and forth all day long empty for the most part...someone is making a money somewhere....what I would like to see is a rapid rail that shoots straight down the Don Valley Parkway - that road was useless five years after being built - enough fuel gets burned in stand still grid lock - to power a city -really not a very smart system - sometimes I think that the real job of the computer clicking commuters is to burn fuel - that's the real job..we all know that nothing of any weight or wealth is generated in information exchange...maybe they should just stay home and do the "work" "on-line" - if you really consider it work and the generation of real wealth or product? AND as lefty boy Miller who believes in leftest freedoms committs high hypocracy visiting that slave camp called China to cut a deal for conservative buisness men --- I don't get it....left right - tax this tax that - and pretend it is for the common good - I don't see any good happening - with more taxing..do you?

[Michael Bluth]

Warren Kinsella wrote the best response to Dion's carbon tax plan.

It's bad politics. It is already confusing voters. It therefore gives the Tories a Hell of an opening to swift boat the Liberals on the environment - again (a six-year-old could write the attack spots). It reinforces the impression that federal Libs are utterly disconnected from the day-to-day lives of real Canadians, sipping lattés at Starbucks and listening to CBC Two, while the Tories are down at Tim's with 30 million other regular folks, talking hockey.

Now that Liberals are on record about how bad an idea this is, will Steph finally listen? Probably not...

[JB Globe]

They think if you raise gas taxes that it will diswade drivers who are addicted to the car..this makes about as much sense as getting the poor off of nicotine by charging them 10 bucks for a pack of 1 dollar smokes..addictions are addictions and all that happens is that the public is gouged and the addict will pay..tax on tobacco for instance just creates protein starved poor people..who will continue to smoke and eat lower quality food which makes them more stupid and will continue to generate even more poor people unable to think clearly..the "greening" guys who say that taxing gas is helpful are just as delluded..the car addict will do without what is truely neccesary and continue to drive and eventually feed the family craft dinner..rather than give up the huge status bound SUV..tax all you want and gouge all you want..all wealth comes from selling things that are addictive - welcome to the brave new world folks -

You're comparing a chemical addiction to a habitual one - they're not the same thing. One's a hell of a lot easier to break than the other.

And I think you're over-estimating the amount of people who are "addicted" to driving. Most folks would rather not spend on 10-15 hours a week driving - they'd rather have what amounts to an extra day to spend with their families. If we give transit priority on roads and in funding, than it will cut travel times dramatically, meaning people will spend less time stuck in traffic. - That's the carrot (along with subsidizing transit passes with carbon taxes and other things I mentioned earlier).

The stick comes in the form of the taxes on carbon, and on gas-guzzling car models.

I'd also suggest that this "status" of SUVs and cars in general will dwindle as more and more people start to become personally active in reducing carbon emissions. I don't think they'll be many people driving SUVs at all in 25 years.

[JB Globe]

I live on one of the new lines and I can say it is a total bust. I had high hopes for the St clair line but the reality is it has congested the street and has cut down the commute ttime by maybe...maybe 2 minutes.

That's entirely because the streetcars don't have priority on the roads. They're given the same rights on the road as a car, even though one is carrying a single driver and the other might have 100 people (or 250 if it's a double car).

In Holland you just fly through the city because the streetcars (or, trams) are given priority - the streetcar approaches an intersection, flips a switch on the track, the light changes and the driver doesn't even have to slow down - the only thing the streetcar stops for is to pick up and drop off people. In my experience, waiting for lights is what takes the most time, because you have to make a stop before the light to wait for a change, then after to pick up people at the stop.

If Toronto never caved in to driving lobby groups (yes, they exist) than it would take 5 minutes to get from Spadina/Bloor to Union Station, instead of the 15 it takes now. But that's a short distance - imagine how quick all of these lines that stretch for 50 KM will be if they get transit priority?

[HisSelf]

This is a perfect time to do something about our gas dependency. The Auto industry is on the ropes. Invest in mass transit now before they can afford better lobbyists!!!

[Bryan]

If you lower gas taxes, you will encourage consumption. Where will that get you?

It'll make the production of food and clothing less expensive. It'll make heating your home less expensive. It'll make just getting to work less expensive. It'll make many employers overheads lower so they can afford to pay their employees more. It'll get you more of your own money still in your own pocket.

[HisSelf]

It'll make the production of food and clothing less expensive. It'll make heating your home less expensive. It'll make just getting to work less expensive. It'll make many employers overheads lower so they can afford to pay their employees more. It'll get you more of your own money still in your own pocket.

For how long? It is just delaying the inevitable. The Chinese and the Indians are subsidizing oil. Let them. Finally an Achilles heel. Once again, we are running ahead of the pack. Score for the home team.

[Bryan]

For how long? It is just delaying the inevitable. The Chinese and the Indians are subsidizing oil. Let them. Finally an Achilles heel. Once again, we are running ahead of the pack. Score for the home team.

So it'll be win-win then?

[August1991]

Linked from another thread...

Exactly, August, supply and demand. If the government shaves a few cents off of the tax, the market will adjust it to the same price that it was before the tax was removed. You know, I think they call it the " equilibrium price " .

In any case, let the thread hijack end here. If anyone wants to continue this discussion, they can move it to a new thread.

I'd argue that Canadian consumers now pay any taxes in Canada because the world price of oil is (from Canada's standpoint) largely elastic. With the exception of oil royalties, Canadian taxes fall on Canadian consumers. If the federal government were to cut the 10 cent excise tax, or exempt gasoline from the GST, the price to consumers would fall equivalently.

But should the federal government cut the excise tax? Why should gasoline be GST exempt?

Let me consider the GST first. IMV, GST should cover everything - even food and new houses. The idea of exempting gasoline from GST is anathema to my reasoning. What about the federal excise tax on gasoline? At 10 cents per litre, the federal excise tax on gasoline amounts to a carbon tax. I would give this tax a sounder calculation and extend it for example to coal, natural gas, kerosene (jet fuel) and diesel fuel on a similar basis. This federal excise/carbon tax should apply to fuel for farm vehicles too. To the extent the federal government contributes to road infrastructure, gasoline used for vehicles shoudl cover these subsidies too.

After this, each province or municipality can decide how to tax gasoline to pay for its roads, transit or just as a way to raise revenue. Successful provinces will get this calculation right.

----

A major (green) argument against Dion's carbon tax proposal is that the federal government has a carbon tax now: it's the federal excise tax on gasoline.

Edited May 25, 2008 by August1991