Tuesday, September 15, 2009

Is Bill Tieleman RIght about the "Elephant in the Room'?

Bill Tieleman's criticism of my previous column makes me wonder if I don't try too hard to read the broader "public interest" in my academic tea leaves, perhaps because I wish to avoid the uncomfortable truth that much of what Campbell's Liberals do is done to advance the material interests of Vancouver's commercial elite. (The HST and carbon tax are both more easily handled by affluent Vancouverites than by us regular folks, and much preferred by them over higher progressive income taxes and corporate taxes.)

Here, in case you missed it, is what Bill said:

"Mark - I fundamentally and totally disagree with your basic premise. And as a left-wing commentator I approved of Stephen Harper's cuts to the GST.

You state almost off-handedly the central problem: "(Even though expenditure taxes are regressive compared to income taxes, that feature can be rectified by devices like the GST tax rebate for people earning lower incomes, and more targetted spending in certain areas.)"

In other words, even though there's a bloody elephant in the room, maybe we can find him some peanuts!

I can't figure out why you and other smart folks are not recognizing the obvious - consumption taxes like the GST and the proposed unfair BC HST are inherently regressive, harmful to lower and middle-income earners despite any "rebates" and are a drag on consumer spending."

All I wish to say in my defence at this moment is that (1) I don't like Harper taking his ill-timed
pro-cyclical tax cut and then, when the recession hits, dressing it up as an Economic Recovery Program; and (2) I think that $12 billion in lost revenue could be better spent elsewhere, at least for the purposes of fiscal stimulus during this recession.

But Bill's comments do make me wonder sometimes whether I try too hard to find a common public interest, simply because I am emotionally and intellectually reluctant to see an unpleasant truth about BC politics: that issues like the carbon tax and expenditure vs. income taxes and the HST are actually reducible to pure, zero sum, distributive struggles and class interests. That people who latch on to the idea that pollution and expenditure taxes are more efficient or socially optimal and harder to evade than income taxes are merely providing cover for elite interests at the expense of working people, whether they realize it or not.

In other words, they refuse to see the elephant in the room; and the positive sum game they are reaching for is, if not exactly illusory, then, as Bill puts it, just peanuts.

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