Thread: Carbon Tax Proposal (Canada)

From what I've seen, one of the key credits will be the "improved working income tax benefit". The latter, in its current form, alone is only useful to very low income households that make their money through self-employment.

It has nothing to do with self-employment.

From the Canadian Revenue Agency:

Q.3 What income do I need to qualify?

A.3 Low-income individuals or families must have over $3,000 of earned income (for the purpose of the WITB).

Q.4 How do we calculate the earned income for the WITB?

A.4 Earned income is income from the year from employment and business, computed without reference to losses from those sources. For a couple, for purposes of determining the WITB (not including the Disability Supplement), earned income will be their combined earned income.

Q.5 What are the maximum amounts for the 2007 WITB?

A.5 The maximum amount for a single individual with no dependants is $500.

The maximum amount for families (couples and single parents) is $1,000.

Q.6 At what point could my WITB be reduced?

A.6 In the case of a single individual with no dependants, the 2007 WITB will be reduced by an amount equal to 15% of the net family income (for the purpose of WITB) in excess of $9,500.

In the case of a family (including single parent families), the 2007 WITB will be reduced by an amount equal to 15% of the net family income (for the purpose of WITB) in excess of $14,500.

It is essentially the same as the American Earned Income Tax Credit, although ours is significantly less generous than the American version. I believe Shek (certainly no tax and spend liberal) has said that the EITC is one of the most effective tools at fighting poverty. I have no problem with ours being expanded.

I'd like it if (1) it was actually revenue neutral and (2) if carbon dioxide being the "be all and end all" cause of man made global warming was actually conceivable through proper consideration of scientific fact (which it isn't, but political factors have transformed it into the most popular cause in the mainstream media and society).

I certainly agree that carbon is not the only the factor, but I'll take what I can get. Plus it would make our economy more efficient in two ways: 1) income taxes are less efficient than consumption taxes, and a carbon tax is certainly a consumption tax, while this plan calls for reductions in income tax. 2) The tax cuts (corporate and individual) and the carbon tax will provide the means and motive, respectively, for investing in more advanced equipment and appliances and more efficient buildings, which will lead to a reduction in power consumption, allowing the purchasing power that would have gone towards greater energy use from inefficiency to be used more productively...assuming we eventually phase out the carbon tax or become so efficient that the amount paid is negligible.

Very much harmed. The carbon tax, which isn't revenue neutral, is going to tax everything but gasoline. Most importantly, this tax will be applied to home-heating fuel, which is the main method through which to heat homes in rural Newfoundland; indeed, in urban Newfoundland as well. Most houses in rural Newfoundland are old construction and the owners can't afford to upgrade them, even with federal assistance programmes. A family I know was spending $800 a month this winter ($300 a month normally this year) to heat their home and hot water. On the year, this translates into roughly $5000 in home heating oil costs. This family's net income is about $9000.00 (recall that rural Newfoundland is terribly economically depressed). That's a huge expense, and it's only going to get more and more under Dion's plan! The carbon tax isn't "revenue neutral", and as you need to meet a long list of requirements to take advantage of most tax credits (if they apply at all in a rural sense ... for example, the public transportation tax credit obviously doesn't), this family is unlikely to get much of the carbon tax offset. Even if "special help" (to quote CBC) is provided, it's not much of a real benefit.

This is certainly a good point. Only thing I will say is that this family is eligible for the WITB. Depending on how much Dion plans on increasing the WITB, it may offset the carbon cost...but I won't pretend to know that for sure. I agree that Central Canada stands to lose less/gain more from this than Atlantic Canada, but other than scrap the whole thing (which is a thought...but I do believe that global warming is partly - not entirely - related to CO2), I'm not sure what can be done about it.

The carbon tax won't do any good in Newfoundland and Labrador; indeed, in Atlantic Canada. If the tax isn't revenue neutral, most Newfoundlanders and Labradorians can't afford it (and I'm sure it's the case for the rest of Atlantic Canada which has similar economic pressures). Forgive me for saying, but this is a Central Canada tax, made in Central Canada, and without any consideration of the Atlantic Provinces as per usual Central Canada policy!

Except for right now where we have made in Alberta policies that, surprise, benefit Alberta most...with a bit of pandering to Quebec.

Well...that's democracy for you, Quebec and Ontario combined make up two thirds of the population..

If you could have your way, what would an Atlantic Provinces oriented policy frame work (not necessarily about global warming) look like?

What I do not understand, is that the proposed cuts to be made to the GST are not deep enough to cover the costs to Canadians that the Carbon Tax will bring. So in fact, Canadians will be taxed more than they currently are. Even though Dion is saying that taxes will be reduced.

A carbon tax will only heighten gas prices, which will only fuel inflation. Unless Dion proposes a VERY deep cut to the GST, than this carbon tax is only going to make the cost of living even more expensive for Canadians.

Not to mention, that this plan looks more like a mini budget than a plain old carbon tax...

What I do not understand, is that the proposed cuts to be made to the GST are not deep enough to cover the costs to Canadians that the Carbon Tax will bring.

Who is proposing more cuts to the GST? Did you mean income tax?

A carbon tax will only heighten gas prices, which will only fuel inflation.

If you are referring to natural gas, yes, gasoline, no. Dion has said that the gasoline tax already in place constitutes a carbon tax on gasoline.

Unless Dion proposes a VERY deep cut to the GST, than this carbon tax is only going to make the cost of living even more expensive for Canadians.

Because you said GST twice, I guess you did not mean income tax, so I'm confused. Although, economists argue that GST cuts are themselves inflationary, so I would prefer the income tax cut/refundable credit.

Not to mention, that this plan looks more like a mini budget than a plain old carbon tax...

I agree. Dion has put all his eggs in one basket. If it turns out the public doesn't want the carbon tax, all his other proposals become impossible, or would require him to not cut income taxes at all, or maybe even raise them.

Originally Posted by ZFBoxcar

Who is proposing more cuts to the GST? Did you mean income tax?

Sorry I meant income tax, yes.

Originally Posted by ZFBoxcar

If you are referring to natural gas, yes, gasoline, no. Dion has said that the gasoline tax already in place constitutes a carbon tax on gasoline.

However, the oil companies would pass on the added cost of this carbon tax onto the consumers at the pump. Something that Dion has acknowledged.

Originally Posted by ZFBoxcar

Because you said GST twice, I guess you did not mean income tax, so I'm confused. Although, economists argue that GST cuts are themselves inflationary, so I would prefer the income tax cut/refundable credit.

I did mean income tax. However, the tax cuts are not deep enough to cover the rise in cost of living that this carbon tax will have.

Originally Posted by ZFBoxcar

I agree. Dion has put all his eggs in one basket. If it turns out the public doesn't want the carbon tax, all his other proposals become impossible, or would require him to not cut income taxes at all, or maybe even raise them.

Another question..

B.C. will begin its own provincial carbon tax July 1st.. So will B.C. have two carbon taxes dumped on them, while the rest of the country only has one? If not, than do people from B.C. still benefit from the cuts to income tax like the rest of the country?

Not to mention, that when the Carbon Tax in that province was first passed, Gasoline only cost about 75 cents a liter. As compared to todays 1.40!! The carbon tax in B.C. is now incredibly unpopular, and Premier Gordon Campbell is now faced with a very difficult situation.

Does Dion really want to get into that mess as well???

Not to mention that Quebec is also slated to begin its own provincial carbon tax soon... so the same questions will be applied to that province as well.

Originally Posted by Canmoore

However, the oil companies would pass on the added cost of this carbon tax onto the consumers at the pump. Something that Dion has acknowledged.

Not to mention drive up the home fuel costs and industrial fuel costs as well. As if it isn't bad enough truckers are paying more for gas and transfering their costs to their shipping fees. Transfer those increases in fees to the merchandise they are hauling and things compound.

Originally Posted by Canmoore

...the tax cuts are not deep enough to cover the rise in cost of living that this carbon tax will have.

I just got a check in the mail today from our provincial government, for $100, supposedly because "this years provincial budget makes it easier for British Columbians to choose a lower carbon lifestyle".

Now when the carbon tax comes in, there goes my $100. Nice bait and switch eh?!

Originally Posted by Canmoore

Another question..

B.C. will begin its own provincial carbon tax July 1st.. So will B.C. have two carbon taxes dumped on them, while the rest of the country only has one? If not, than do people from B.C. still benefit from the cuts to income tax like the rest of the country?

Not to mention, that when the Carbon Tax in that province was first passed, Gasoline only cost about 75 cents a liter. As compared to todays 1.40!! The carbon tax in B.C. is now incredibly unpopular, and Premier Gordon Campbell is now faced with a very difficult situation.

Does Dion really want to get into that mess as well???

Not to mention that Quebec is also slated to begin its own provincial carbon tax soon... so the same questions will be applied to that province as well.

Gas prices have always gone up, however we've seen incredible price increases, so why is it now that the Liberals want to add further tax to energy resource usage, particularily ones to feuls that effect everyone not just those who drive cars?