Do not think about, write about or deal with human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.
Wherein we see that the Elite are still arrogant and still wrong, believing that our wealth is theirs because they’re so much more capable of spending it wisely than we.
Tax, spend, regulate, repeat
Have you heard the news? Major governments across Canada are planning to revive an ancient fiscal strategy they claim will achieve economic and policy miracles unseen in the country’s history. It’s called “Tax and Spend.”
That’s not the official name f or t he strategy. Instead, based on the advice of some of Canada’s leading economic thinkers and eco- fiscal specialists, this old dead idea — the source of past fiscal crises — is getting new life under new governments and often under new labels. These labels include carbon taxes, cap-and-trade taxes, tax credits, tax benefits, revenue neutral taxes, taxes on the rich, taxes on corporations.
Some of it sounds new and innovative, promising revolutionary solutions to the country’s most pressing growth and environmental challenges. Behind the facade of newness, however, politicians in Ottawa and the provinces are merely using new ideological toys to play the same old tax- and spend games.
Accompanying t he fiscal policies are rafts of heavy regulation on all sectors of the economy, based on climate and energy- consumption objectives, that can only add to the growth-slowing trends already burdening the Canadian economy.
The fundamentals of the tax- and- spend strategy are embedded in Justin Trudeau’s Liberal budget plan. Following along are the premiers of the largest provinces who joined the prime minister on Monday to review a variety of options to meet carbon-emissions targets to be set in Paris in the coming weeks.
Whatever one makes of the climate crisis, it is patently obvious that the carbon- tax schemes in place and planned — from Ontario’s cap- and trade to Alberta’s new carbon tax — are fiscal shams portrayed as brilliant applications of the principles of market economics to change consumer behaviour. High prices equals less consumption. In practice, however, the schemes are essentially reproductions of the same old tax policies that will yield the same results we’ve always had from taxation.
The essence of the sham can be found in Alberta Premier Rachel Notley’s new “Climate Leadership Plan.” Released Sunday, it claims that a proposed carbon tax is “a price” that “provides an incentive for everyone to reduce greenhouse gas emissions.” The carbon price will eventually add 6.7 cents to the final price of a litre of gasoline in the province.
At proposed rates, the carbon tax would raise $3 billion a year for the NDP government by 2018, estimated by Jack Mintz of Calgary’s School of Public Policy as equivalent to imposing a 3-per-cent provincial sales tax, harmonized with the GST.
Despite the government’s claim, there is no evidence in the official report — from a committee headed by the University of Alberta’s Andrew Leach — that the tax will have a meaningful impact on carbon emissions. The Leach report fudges and squirms around the reality: that the tax will do next to nothing to reduce Alberta’s carbon footprint.
The report begins its conclusions with a squirm. “The potential for emissions reductions from carbon pricing is significant, although varying across sectors.” Then it slides over to say that a “significant share of these reductions are due to complementary policies in greening electricity, energy efficiency and methane reductions financed by revenues from the carbon- pricing program.”
In other words, the government will achieve carbon emission reductions through the elimination of coal- powered electricity generation and methane emissions. To help meet methane objectives, the Leach report says the government should provide “market based incentives for equipment upgrades” in facilities. In effect, the government will collect a tax on consumers and then spend it on subsidies to industrial companies that produce methane.
In the new tax- and- spend carbon tax theory, this is known as “revenue neutrality.” Once considered an essential part of carbon-tax ideology (the government will collect the tax and then return it to taxpayers in other ways), revenue neutrality has now been neutered into meaninglessness.
The Notley government in a statement absurdly defines revenue neutrality to mean that “100 per cent of proceeds from carbon pricing will be reinvested in Alberta.” By that definition, every tax in existence is revenue neutral. If the government spends money — via tax credits, subsidies, investments, giveaways, outright government outlays, buying windmills — it’s all now defined as revenue neutral.
In Alberta’s case, some of the $ 3 billion will also be returned to lower income groups who suffer most from the new carbon tax — although low income taxpayers would then have more money to spend on carbon-emitting gasoline.
Net effect on carbon emissions from a similarly revenue-neutral carbon tax sham imposed in British Columbia years ago: Zilch.
And so on with massive regulations. But even then Alberta will have failed to achieve the necessary level of carbon reductions that are part of Canada’s target — as the Leach report admits. At the end of 2030, Alberta’s plan to have lowered annual emissions to 270 megatonnes will still fall short of making a real contribution to the alleged objective of holding the increase in global temperatures. “Many will look at these emissions reductions and claim that our proposed policies will not place Alberta on a trajectory consistent with global two- degree- Celsius goals, and in some senses this is true.” The Alberta policies “would not lead to global goals being accomplished,” says the report.
Governments, therefore, will tax and spend and regulate. But it still won’t be enough, in which case Canada will need even more of the same. Tax and spend is the new tax and spend.
No Global Warming no greenhouse gases. Thence, the wrestling with carbon emissions is like pinning fog to the map. Pointless and won’t happen.
Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Power Teaching: How to Find Someone to Teach Your Child when the Education System has Failed.”
Cui Bono–Cherchez les Contingencies