By default, tax cuts are getting all the economic attention this election, in the absence of inspiration for a new federal initiative - like ending child poverty or reducing pollution.
The Liberals came out of the gate with a pre-election budget promising corporate and income tax cuts. The Conservatives favour a cut in federal sales taxes and a tax cut for childcare expenses and capital gains. The NDP is calling for tax relief for low-income earners and claims that "with billions of dollars in surplus, Ottawa doesn't need new tax revenues."
So Jim Harris of the Green party has the tax-raising field all to himself. It's a big field. Alan Durning, co-author of Tax Shift, calls taxes "the DNA of the economy: invisible, cryptic and awesomely powerful."
Carefully used, the green taxes Harris promotes would have the power to reward green consumers, drive energy efficiency in an era of global warming and peak oil, bring new economic sectors into being - and perhaps most surprisingly, do more to promote social equality than so-called "progressive" income and corporate taxes.
At the more traditional and superficial level, green taxes impose tax penalties on environmental sinners and reward environmental saviours with tax breaks. They take from people who buy "bads" in order to give rebates to people who buy "goods."
In this tradition, Harris favours turning the GST into a BST - a Bads and Services Tax. In an interview with NOW, he says he wants to abolish the federal sales tax on bicycles, public transit and VIA Rail passes, hybrid cars, restaurant sales of organic food and health club membership -- any personal expenditures that reduce the need for government spending on medical care or eco cleanups.
Every time you bought a takeout coffee in your own cup, you'd save the tax while saving the government the cost of managing the pollution and garbage from paper cups.
That's the kind of stuff Harris talked about during the last federal election. He's since realized that major companies cause about half the pollution in Canada, irrespective of decisions made by conscious consumers. He's also brought himself up to speed on the latest in European and U.S. thinking on taxes as incentives for companies to downsize their resource use and upsize their employment of people - which is what green economics is all about.
Harris would apply resource taxes on corporations long before any products reach customers. Oil and gas companies would be taxed heavily on all their primary energy, that is, all the energy they use to produce energy from a raw resource. All the fuel used, including that consumed in company cars, all the heating and cooling and paper used in company workplaces, all the machines to extract oil and gas, all the gas flared off into the air, etc, would be taxed at a punishing rate. With any luck, this would provoke a "tax revolt" forcing energy companies to switch to energy-efficient car fleets, offices and manufacturing practices. While waiting for the tax revolt to take effect, Harris would use the revenue from corporate resource taxes to eliminate the income taxes paid by low-wage workers. This would boost their well-being with the rough equivalent of a $20-a-week raise and reduce government expenditures for social assistance.
"We need market mechanisms to send the right signals," says Harris, who has a day job as a management consultant, "and to create economic incentives to do the right thing."
From this grander tax-shift perspective, the term "green taxes" is misleading in two ways. It implies that some taxes have an environmental impact while others do not. It also implies that green taxes only affect the environment, when they actually have huge implications for social equality.
In fact, the great majority of existing, seemingly neutral tax practices harm the environment. Having no provincial tax on electric utility bills, for instance, means that coal and uranium, the filthiest and most toxic of fuels, go untaxed; that's hardly enviro-neutral.
Nor are environmentally hostile tax practices helpful for social equality. Management of employment insurance, which is funded by a payroll tax, is profoundly biased in support of extractive and resource-exploiting industries.
EI rules are relatively generous in supporting laid-off workers who suffer chronic seasonal unemployment in regional industries, such as logging and fishing. But tourism workers, a more environmentally benign industry, have a much harder time collecting benefits.
The largely immigrant urban tourist industry workforce, though discriminated against relative to primarily European-heritage loggers and fishers, still does better than the exclusively immigrant seasonal workers in agriculture, potentially a non-extractive and eco-nurturing industry.
Though these seasonal workers pay into employment insurance, they're sent packing back to Mexico or wherever as soon as the season is done and they've finished paying payroll taxes to support laid-off loggers and fishers. But who would think to say that taxes supporting environmentally benign industries such as tourism and agriculture are anti-racist?
Inequitable use of employment insurance funds is hardly news, but complaints about abuse of funds for the vulnerable never rate attention. Funds supposedly earmarked for the unemployed are in fact used to cover other programs: paid maternity leave or job training, for example.
These add-ons that help the feds appear progressive have been financed by major new limits on access to employment insurance, all imposed while Paul Martin was finance minister. These manoeuvres download the costs of some social programs (job training and maternity leave, for instance) onto individual payroll taxpayers. If anyone thought the poverty and homelessness flowing from this abuse of taxpayer money was a scandal on a par with taxpayer money going to a few Montreal ad firms, it could have rated a Gomery inquiry and helped determine the outcome of an election.
Harris wants to see a law preventing governments from using payroll taxes to fund purposes other than those they're intended to cover - part of the shift to take taxes off goods like incomes and shove them over to bads like resource use.
Not a bad idea to raise in an election campaign, whatever the outcome.