Monday, June 30, 2008

Dion's Carbon Tax

The reviews are mixed. First, what is Dion's carbon tax plan?

The Liberal plan is relatively straight-forward - a $40/tonne on carbon dioxide emissions, phased in over a 4 year period. This tax would replace a number of existing excise taxes on carbon based fuels. Since the existing federal gasoline tax is equivalent to the rate 42 dollars/tonne of carbon, gasoline taxes are not unchanged with this new tax.
If Stephen Harper hates it so much, could there be any merit in the plan?
Prime Minister Stephen Harper pulled no punches on Friday in describing a carbon tax proposal by Liberal Leader St├ęphane Dion, saying it would "screw everybody" across Canada...

Harper, who has previously called Dion's plan "insane," said the policy is not only bad for Western Canada, but "will recklessly harm the economy and the economic position of every Canadian family."
The NDP are also opposed to Dion's plan (and to carbon taxes in general) since the tax "relief" components can disproportionately hurt those who pay the least income taxes - i.e. the poor will pay for increased costs of energy but get little or no tax breaks.
"Unlike the Liberals and their big business friends, Jack Layton and the NDP think big polluters should pay for the pollution they create, not ordinary people who are trying to make ends meet."
Here's a pro-carbon tax editorial from the Ottawa Citizen.
St├ęphane Dion's carbon tax plan is not "crazy"; it is actually brilliant.

First, he listened to good economists. Second, he used the National Round-Table on Environment and Economy figures to put a price on carbon, figures which were developed at the request of the Conservative government to find out what's required to cut greenhouse gases by 60-65 per cent in 2050, a widely agreed upon international target....
Here's an anti-carbon tax article from Terence Corcoran at the National Post.
That's Mr. Dion's plan, and he's sticking to it, whatever its dubious economic foundation.

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