The LiveSmart BC television ads have started running here in British Columbia, Canada to explain how the Carbon Tax is your buddy, your pal your lifelong friend. The ads clearly state you can save taxes by buying things you would not normally buy and by buying less of what you have to buy. I think that the Government had to pay a marketing and advertising firm a pretty nice chunk of change to come up with that one, just one more example of your carbon tax dollars hard at work for you.
Lets take a look at the two main points; no tax on things you did not have any intention or budget to purchase in the first place and that by buying less gasoline and natural gas you will save money on taxes.
Energy costs are up almost 40% overall and taking money out of your pocket each month, for hot water, heating, driving to work and out to get annoying stuff like medical services and food. So in your strapped and straining budget you can save on the carbon tax by buying new windows, a new furnace, additional insulation or a new car. You save the sales tax or get a rebate, well by not buying any of these items you can save the sales tax as well, plus the cost of the item. I guess we could all just get a loan and add a payment onto your already tight budget, or just refinance your home and we can get in the same mess as the USA with the housing crisis. Why not take out all the equity in your home before the market retracts, what is the worst thing that can happen? Lets ask the board over at IndyMac Bank who were just shutdown by federal regulators and the FDIC (IndyMac was a high risk mortgage and refinance lender that waived the annoying paperwork requirements like proving you have an income) or we can ask the 2.5 Million families who have been foreclosed on. Perhaps a better source would be the remaining homeowners who watch the values of their homes drop and their 20 years of equity slip away because of out of control consumer borrowing.
Next we are told to consume less, because we get a Income Tax cut and buy less fuels and this will result in less overall taxes. I do not know what the Government thinks "Revenue Neutral" means but where I come from if everyone consumes less fuel then there is less tax revenue and by extension less tax rate decreases. I am just saying. Lets just see how the budget looks in 2009 and what the government will do when the Carbon Tax revenue does not equal the realized loss of income from the income tax rate cuts and economic pressures. They have two options at that point and it is clearly stated in the budget. They will raise the Carbon Tax higher to meet the shortfall or they will raise the Income Tax rate higher to meet the shortfall. This will probably not happen in 2009 because income from oil and gas land leases will be used to make up the shortfall by budgetary supplements. In 2009/10 we will have a shortfall that, if they follow the budget plan to the letter, will be as a direct result of overall economic conditions and inflation doing the consumption reduction coupled with higher unemployment with increased social services costs. I my opinion both the Carbon Tax and Income taxes will rise under these conditions.
Other Costs Besides Taxes
Only the BC Government would add a levy on Hydro Power to fund an Innovative Clean Energy program, this is just one of the additional surcharges and levies proposed over the next 3 years. There is an infrastructure rebuilding fee also planned for the fall for BC hydro to update generators and power transmission lines but even more ridiculous to pay for new lines to "Private Partnership" electrical generation projects all over the province. BC Hydro, a crown corporation, will be required to purchase this power even if it is not needed and the infrastructure expenditures will not be reimbursed by the operators. The BC Government has been taking the profits from BC Hydro for 50 years and now the consumers have to pay a fee so they can "update" the infrastructure? If they had done it every year over the last 20 they would be done and still been profitable, now we pay for the poor management and profit grabbing governments of all stripes.
Cap and Trade - A Big Primate
The 800 pound gorilla in the room that nobody is talking about is the Cap and Trade system set to be implemented this fall behind closed doors. The Government passed an act in the spring session to give themselves the power to enact any form of Cap and Trade that they wish without further need for debate or consultation. This is part of the WCI (Western Climate Initiative) and thankfully will be doomed from the outset because in the USA the precedent has been set to place Climate Action in the form of carbon markets under federal jurisdiction not under the states themselves. This will kill the US participation in this plan before the end of 2009 and collapse the whole issue, but not before it costs BC businesses several 100 million dollars that they will never see back.
Oil and Gas Revenue Should Pay for Climate Change
The oil and gas lease rights are important because according to the budget there is about 500 Million dollars allocated to direct Climate Change and Energy Research over 3 years, the Government has made over 660 Million this year in lease auction revenue. The Climate Change funding is more that paid for out to 3 years ahead as is almost 1/2 of the expected revenue from the Carbon Tax (Income Tax Cuts) this year. Does it not make more sense to divert that money into these programs because these are the same fossil fuels that are the bane to the planet?
In the end what will the BC "Average Joe" do? Like most people they will pay the tax, look at their dwindling savings, stretched paycheques and re-elect the same set of politicians. They will grumble online and at parties and pubs but they will not stand up and say clearly that more taxes are not necessary. This is because most people just want to be left alone by their Government, they seem to forget that the Government is supposed to be the will of the people ( a majority oppose the Carbon Tax) , not the will of the Premier who awoke all "Green" one morning.(Pun Intended)