More third-party validation around the emerging Liberal proposal around carbon shifting. In addition to such folks as David Suzuki, Elizabeth May and Sierra Club Canada’s Stephen Hazell, among many others, you can now add Christopher Ragan to the list. Ragan is an economics professor at McGill, and offers a very reasoned explanation of how it’s not quite fair to say a carbon shift would disproportionally impact low income Canadians. It's an interesting read.
More is probably needed, but the carbon tax would be an excellent start. It creates the right incentives to reduce fossil-fuel use while not increasing the government's tax take. Few economists doubt that such an idea has real merit; indeed, a carbon tax recently appeared at the top of a long list of policies in a fascinating priority-setting project published recently by the Institute for Research on Public Policy.Recommend this Post on Progressive Bloggers
First, they (the NDP –ed.) dislike the carbon tax because it would raise prices for gasoline, heating oil, and many other things bought by ordinary Canadians. They favour instead a cap-and-trade system imposed on large industrial polluters. They appear not to understand that a cap-and-trade system, even if it applied only to large industrial firms, would nonetheless increase the prices of most products because firms would be required to purchase costly "emissions permits," thus increasing their costs. Some of these higher costs would clearly be passed on to consumers.
The NDP also argue that the Liberal carbon tax would be especially bad for low-income households because they spend a relatively large fraction of their monthly income on gasoline and heating oil. But they miss the crucial point that higher-income households spend more - in absolute terms - on carbon-based energy than do lower-income households.
Here is the neat part, at least for the low-income households. The easiest way to reduce personal income taxes across the board would be to increase the basic personal exemption by the same amount for all taxpayers. If this approach were taken, the tax reduction for low-income households would be larger than the amount they paid in higher carbon taxes.