Liberals could fight Tories on taxes

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In federal politics, appearances are usually quite different from reality.

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Opinion

Hey there, time traveller!
This article was published 14/10/2009 (4793 days ago), so information in it may no longer be current.

In federal politics, appearances are usually quite different from reality.

Last July, Prime Minister Stephen Harper said there were two schools of economic thought on taxes. “One is that there are some good taxes and the other is that no taxes are good taxes. I’m in the latter category. I don’t believe any taxes are good taxes.”

His constantly-burnished appearance of being death on taxes may explain much of the prime minister’s political success. Not only does it keep him onside with his anti-tax base, but it gives him his biggest club to batter his opponents into fearful silence as “tax and spend liberals.”

So terrorized are the Liberals that only once have they dared articulate the traditional liberal vision of government as an agent of social and economic progress. That once was Liberal Leader Michael Ignatieff’s speech to the Toronto Board of Trade Sept. 22. After quoting Harper’s view that no taxes are good taxes, Ignatieff continued:

“Think about that for a moment. It’s an astonishing statement for a prime minister to make. We pay taxes, Mr. Harper, so that premature infants get nursing care when they’re born; so that policemen will be there to keep our streets safe; so that we have teachers who give our kids a good education. We pay taxes, Mr. Harper, because we’re all in this together. It costs us something, but it makes Canada the place it is; a place where we look out for each other.

“But Stephen Harper doesn’t think that way…His is an ideology of the past. An ideology that’s contemptuous of anyone who sees government as a means to do good.”

These themes are the ones Ignatieff should use to, as he said last week in London, Ont., “lift that big frame (of the Conservative attack ads) off,” and finally “frame” himself with the electorate. They are the themes that will help him recapture his party’s traditional base among women, Quebeckers, urbanites, visible minorities and young people.

They are also the themes that will help the Liberals highlight the hypocrisy of the Conservatives’ death on taxes mantra. The Conservatives are only death on taxes for big business and the wealthy.

It’s true the Conservatives slashed taxes when they first came to office. They cut personal income taxes, reduced business tax rates and offered “boutique” tax credits for children (stay-at-home moms) and athletic equipment (hockey dads) and other targetted small-c conservative constituencies. Last but hardly least, they made that flashy two-point cut to the GST at the outset of the 2006 election campaign, thereby creating a $12 billion annual structural deficit.

The Conservatives have so dazzled the public — and intimidated their political opponents — with their supposed death on taxes routine that only now are Canadians learning about two big new regressive tax hikes about to hit them: an estimated $15.5 billion jump in Employment Insurance premiums for workers and businesses alike by 2014-15 and, in the case of Ontario and B.C. residents, a federal-provincial harmonized sales tax regime that will combine rates to 13 per cent and 12 per cent respectively and apply them to an expanded number of goods and services now exempt from the provincial portions of the combined rates.

The EI tax increase emerged in Finance Minister Jim Flaherty’s latest economic update which boasted Ottawa could return to balanced budgets by 2014-15 without raising taxes, only EI premiums. In his analysis of the update, economist Dale Orr said employment insurance premiums could rise by $632 for workers and for employers, by $884 per worker, over the next four years.

“The government may not call it a tax, but if it quacks like a duck, it’s a duck,” Orr told The Canadian Press.

The Conservatives have successfully taken to the hills so far on the looming HST imbroglio in two politically crucial provinces, but their ability to elude voter wrath in what could be an election year is not likely to last. The Ontario Chamber of Commerce estimates Ontario’s HST will cost consumers $905 million more annually while saving business $1.6 billion. The Liberals are currently agonizing over whether to offend their provincial cousins in both provinces, but political self-interest, if not survival, will probably prevail. The NDP is determined to make the HST an election issue.

Mr. Harper may be about to learn that reality trumps appearances in the end.

Frances Russell is a Winnipeg author and political writer.

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