The Green Shift Explained

[Argus]

The first thing you have to realize is that when Dion says "revenue neutral" and claims it won't raise taxes, he's talking on a national level. Now let's give him the benefit of a doubt and say he's right. I don't personally believe it, but let's say it. What does it mean to you, personally?

Well, if you're middle class, you're going to be paying more. Dion won't tell you that, of course. He'll say you'll get a tax cut. And in all likelihood, you will. But think a moment. The Liberals are going to be paying billions and billions of dollars to the poor and it's other favorite targeted groups. That money has to come from somewhere. Where? Clearly, if some people are going to get MORE under this scheme, then some people are going to have to get LESS. This is what the Liberals keep ignoring, and why they don't like to go into details. But they have been clear that his is a wealth redistribution plan. So someone has to pay. And you know it won't be the wealthy who have armies of accountants to protect their money. To listen to Dion, nobody pays. Everyone benefits. It's FREE money. Now back to reality. Exactly at what point you lose, at what point this ends up costing you more than you benefit depends on a lot of variables. But we can start at a point where the Liberals have clearly marked their preference. They have, as part of the Green Shift, decided to remove the Employment Tax Credit from anyone earning $50k per year or more. That's a $1000 tax credit you will no longer get if you earn $50k. So whatever tax cuts you get, some or all of it will wind up being offset by this. Then there is the affect which Dion refuses again to mention. Stuff is going to cost more. Ontario Hydro, for example, has estimated it will have to raise electricity prices by another 20% if it has to pay the huge penalties on its generating stations the Green Shift calls for. So add that into your extra payment's column. How much more you pay depends on a pile of variables. Let me explain.

Mining company mines iron ore - has to pay pollution taxes on its operation so it raises the price of ore to compensate.

It ships that ore to a steel mill. Diesel costs more because of the Dion Green Shift Tax, so the transportation costs more.

The steel mill then turns that iron into steel. That's a very energy intensive operation. It's paying 20% more for electricity now. It also pollutes, so it has to pay twice over. It has to raise the price of steel.

It ships that steel to an auto plant. Again, transportation costs more, so the cost gets jacked up again.

The auto manufacturer then makes cars - another energy intensive and polluting operation which results in higher taxes.

It ships those cars to market - again, higher transportation costs due to taxes on diesel.

Can you count how many times so far the carbon tax has added to the price of that car? Everything you buy comes by truck and train. That means you pay more. Anything made in Canada is made with electricity. So you pay more. Anything mined in Canada creates pollution - so do generating plants. The oil industry which has been the driving force of the economy for the last few years creates a lot of pollution, so it will be hit hard with taxes.

So you're paying more for goods, more for gas, more for heating oil, more for electricity - how much more? I couldn't tell you offhand, but it's got to be enough for you pay for the $80 billion in promises to various Liberal causes or else we go into deficit.

Oh, another thing. If the Green Shift actually causes people to cut back on their consumption of gas and oil there will be a rising deficit. So the only possible response is to reward them by - raising the carbon tax higher to compensate.

[Argus]

By the way, do I really need to explain what adding all these extra costs to business does to the economy at a time like this?

[August1991]

By the way, do I really need to explain what adding all these extra costs to business does to the economy at a time like this?

And what is the cost of income tax or the GST to doing business at a time like this?

Argus, you claim to have studied economics so do you remember the term "incidence"?

Your long rant/post involves the question of incidence - who truly pays a tax? To some degree, business owners can pass taxes on to consumers but sometimes they can't.

----

In general, most economists agree with Dion and feel that we all under value the environment because we can use it without charge. The environment is the modern world's slave - it provides a service and we don't pay for it.

In general, most economists agree with Dion and feel that the incidence of a carbon tax would fall on emitters of CO2. By and large, consumers (not business owners) emit CO2.

Albertans feel rich because their provincal government charges royalties for the use of Alberta's environment. Dion is suggesting the same policy for all Canadians and he is considered a left-wing radical.

[noahbody]

People will be voting for the greenshift without knowing what it will cost them. It's a lot like voting 'yes' in the Quebec Referendum. Dion continues to sell the plan on the premise that a dollar will be returned for every dollar collected in tax, giving the public the impression that they'll as much or more money in their pocket at the end of the day. Mr. Clarity, my ass.

[Argus]

In general, most economists agree with Dion and feel that we all under value the environment because we can use it without charge. The environment is the modern world's slave - it provides a service and we don't pay for it.

In general, most economists agree with Dion and feel that the incidence of a carbon tax would fall on emitters of CO2. By and large, consumers (not business owners) emit CO2.

Either way you slice it, either business pays a lot or they pass it on to the consumer, which was, after all, my whole point. All those added costs will be passed along to the consumer in the form of higher prices. And that added money is a form of taxation which Dion refuses to admit exists. He continues to imply that "revenue neutral" means individual taxpayers won't be hit with steep increases in taxes and that is simply not the case.

Albertans feel rich because their provincal government charges royalties for the use of Alberta's environment. Dion is suggesting the same policy for all Canadians and he is considered a left-wing radical.

How about this, August, Quebecers agree to pay the same added taxes Albertans do in recognition of the fact that while their energy comes principally from hydro electricity, they wiped out immense tracts of forestland which would otherwise be acting every year to help reduce carbon dioxide in the atmosphere. So we calculate how much carbon would have been removed by those forests and Quebecers pay that in a special hydro tax.

You and the other Quebecers are all veeeery enthusiastic about reducing carbon emissions so long as other people foot the bill.