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More insight from Jeffrey Simpson

Jeffrey Simpson has once again focused his keen mind on the Canadian political scene and revealed another completely obvious fact:

The GST cut is the triumph of base politics over sensible economics.

When the Harperites sat down to craft their last campaign document, they observed that the Liberals had in fact cut personal income taxes, but the public had not seen or appreciated those cuts. In fact, polls demonstrated that Canadians didn't even know their taxes had been reduced.

So the Harperites decided to give Canadians a tax cut they could see, feel and therefore appreciate at voting time; namely a reduction in the GST, whose creation by the Mulroney government had been attended with much political controversy.

Gosh. Politically motivated policy. Those Conservatives -- sorry, Harperites -- sure are devious.

In his zeal to roast those Harperites, Simpson makes a nice little logical error:

Lower consumption taxes stimulate more - wait for it - consumption, some of which leaks out of the economy in the form of purchasing imports and taking trips abroad.
A lower GST encourages leaving the country to shop?

Simpson argues that if there's a choice, it's better to focus on income and corporate taxes rather than the sales tax -- which may be true, but so what? Any tax cut is better than more taxes. Let's look at what he would have us do:

A sensible government - or sensible opposition parties - would not only scrap the forthcoming reduction but reinstitute the previously cut point, and then add another. The result would be about $15-billion additional dollars for the federal government.

Then, the government should follow the lead of Canada's best finance minister, Carole Taylor of British Columbia, who intends to levy a carbon tax to slow down the increase of greenhouse gas emissions and then reverse them.

I've heard there is a group known in some circles as the Dionistas who are woefully lacking in policy ideas. Perhaps they will be interested in Mr Simpson's wisdom.


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