Wednesday, January 26, 2011

Jim Flaherty muses about increasing taxes

As part of the Conservative government's plan to try to convince Canadians that we should spend money we don't have to give big corporations tax breaks, instead of investing in ordinary Canadians, finance minister Jim Flaherty had a press conference this morning.

Postmedia journalist Andrew Mayeda was there, and he shares this excerpt from Flaherty's response to a question if the Conservative government would ever consider a tax increase down the road. I've boldedthe relevant portion.

"Our plan actually is to continue to reduce taxes over time in Canada. We've reduced business taxes significantly, and our plan continues in that regard. We've reduced the federal consumption tax, the GST, as we promised we would ... We've done some tax reductions on personal income taxes. Quite frankly, we'd like to do more over time, so that's the direction we want to go. What we're seeing in the economy is moderate growth. It's not dramatic, but it is steady. And we expect that to continue over the medium term. You know, given what we've all been through around the world in the last few years, I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have one. And there are risks in the world, with respect to Europe, with respect to relative weakness in the U.S. economy, with respect to some global imbalances that I'm sure we'll be talking about at the world economic forum (in Davos, Switzerland) the next few days. That's not the expectation. The expectation is that we'll have continued moderate economic growth and continued tax reductions over time."
Now, let me say first that, as a realistic and reasonable person, I think this is a perfectly acceptable and realistic answer. We don't know what the future may hold. Making definitive statements on hypotheticals is a fool's game. You can tell someone what you know they want to hear, but it wouldn't be honest. It's entirely possible that a scenario could arise where, to maintain programs, a tax increase may need to be considered.

So I think Flaherty's answer, which I'd sum up as "we're not planning to and we don't want to, but I won't say never ever," is the correct one.

But here's the thing. A few years ago Liberal leader Michael Ignatieff was asked a similar sort of hypothetical. In short, the question was if the sky is falling and you had a massive deficit, would you maybe consider a tax increase? His answer, like Flaherty's, was that that wouldn't be his first choice, it's not his plan, but he wouldn't rule anything out.

And the Conservatives have been dining out on that answer ever since. In their most recent round of attack ads, once focused entirely on taxes, centred around a quote form Ignatieff that he won't take a tax increase "off the table."

So would it now be fair to see ads on how Jim Flaherty is going to raise your taxes, or is the sauce not as good for the goose as it is for the gander?

I look forward to the creative and entertaining rationalizations on how the Ignatieff and Flaherty situations are completely different. Don't disappoint me, friends.

UPDATE: In the interest of fairness, I should say that Mayeda reports Flaherty's office is crying, surprise surprise, that he was "misinterpeted." Reports Mayeda:
In an email, a spokesman for Flaherty said the minister meant that he would never rule out another big economic shock. I suppose it depends on how you interpret the word "one," which I took to stand for "tax hike." But fair enough.
Mark me down as unconvinced. The question was about ruling out a tax increase. Flaherty posited the hypothetical of another economic shock, and said he wouldn't rule it out. Look at the main line here again:

You know, given what we've all been through around the world in the last few years, I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have one.

Now, it seems pretty clear to me that by "have one" Flaherty means a tax increase. But he now wants us to believe one means economic shock.

Tell me, which sentence makes more sense?

A) I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have an economic shock.

B) I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have a tax increase.

Yeah, I'm not buying Jim. You had a moment of honesty. Own it. Don't piss on my trouser and tell me it's raising.

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Kirbycairo said...

Many of the major legislative moves on the part of the CP are things that they would have gone Bat Crap Crazy about if the Liberals had done the very same things, let alone various moments of idle speculation on the part of average MPs or Ministers. It is the core of the hypocrisy that is the MO of many in Ottawa. Are we not all fed up with an MP or party leader criticizing the other party for something they would do, or staying silent when their party does something which, if another party did, they would criticize vociferously?

It never ends and explains the gradually lowering turnout at the polls. Will the system still have legitimacy when the voter turn out is 20%?

WhigWag said...

Nice catch: one more element for the Grit Girl's guerilla anti-attackcraft-ads:

Would the Harper Government consider raising taxes?

"I would never presume to say 'never'" - Finance Minister Jim Flaherty, January 26, 2011

Kev said...

What a strange world we live in. A world where politicians stand by their lies and retract their truths.

CanadianSense said...

I am impressed with the Liberal demonizing large companies.

The tacking left by Donolo to lift the NDP policies is unlikely to work but it means the centre and right voters are lost.

I do believe the CPC will eventually allow the EI Panel to revisit their increase once the recovery is underway.

I don't see a carbon tax, GST increase or an increase for SMALL, MEDIUM, large businesses on the radar for the next 12 months.

The CPC are not promising to fund a national daycare, smart grid, big party, Green Jobs, free education, Quebec arena, HST-QC payola.

I don't know what the Liberals have offered the Bloc or the NDP for their cooperation in defeating the budget.

Rotterdam said...

Memo to any political party.
Never give the greedy government any more then it needs. Better to starve the government, then the taxpayer.

Tof KW said...

Rotterdam, you'd fit in with the teabaggers quite well. The US is about to get way less government in the not so distant future, a lot less than they counted on.

CS, you should check the latest Abacus poll on what Canadians think of giving corporations tax breaks. Also, stop trolling and get a real job!

rockfish said...

Doesn't matter what he's pitching now. If we played like the CONs, we'd just airbrush out the 'unhelpful' words and make it say "I, Jimbo Flaherty, of sound mind and shakey economic abilities, am willing to jack up your personal income tax so that the CEO's of the world who do business in Canada can have another feather duvet on their beds!"