Sunday, May 27, 2007

Why I'm defending the Charest tax cut...

...or at least, why I'm defending his right to cut taxes using equalization money. Hint: it's not because I want the bigger refund next year. Or because I think it's a great idea.

It's because, as I point out (see link above), it is "entirely legitimate and consistent with the mandate of the equalization program."

And because virtually every province receiving equalization this year (with the exception of New Brunswick, where the recently elected Liberal government there actually ran on a platform of raising taxes and raising spending) is enacting a tax cut of some stripe in their respective 2007-08, with precisely none of the reproach and hyperbole coming from national media or leaders of envious "have" provinces that has been directed at Quebec.

I'm an anglo Quebecer, quite transparently not soveriegntist nor "autonomiste", and what few readers I have are most likely anglophone, and/or residing in English Canada. But I live in Quebec and thus feel firsthand the consequences of allowing arcane debates over fiscal federalism to be blown up into highly politicized, often hysterical, pissing matches where all manner of interest in fact and truth is lost.

And if anything else, the events of the past year should demonstrate conclusively that there is precious little political hay to be made in manufacturing fiscal injustice dragons and putting on a show of slaying them.

The reaction to Charest's tax cut proposal, and the absence of any similar reaction to tax cuts in other provinces, demonstrates to me (a) the folly of mixing politics with transfer payment policy, and (b) the fact that, even at a time when the threat of separation is supposedly remote, the two solitudes remain as far apart as ever - and that no one seems particularly concerned about it.

3 comments:

Anonymous said...

The ROC is paying for Charests tax cut using all of that money the PM has dropped there in the past few months.
www.languagefairness.ca/

d. andy jette said...

If that is true than why talk only about Quebec? What about equalization facilitating tax cuts in Saskatchewan, Manitoba, Nova Socita, Prince Edward Island and Newfoundland & Labrador?

What's happening is that all Canadians are pitching into a program that by design doesn't pay out to Canada's three largest (and currently wealthiest) provinces.

This is exactly, by the way, how all tax-funded programs work. We all pay GST, not everyone gets a GST rebate check. We don't get a discount on our tax bills if we don't go to the hospital in a given year.

Is the beef, then, with all forms of redistribution or just those that happen to, in the current economic context, benefit Quebec?

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