by Michal Rozworski | Political Eh-conomy |*Click HERE to read article*
Indeed, as a tax rather than simply an environmental measure, BC’s carbon tax demonstrates the poverty of tax policy today. It is an expression of the dogma of give-and-take. The economist’s term for this is “revenue neutrality”: any revenue flowing into government coffers from a new tax should be accounted for by corresponding tax cuts elsewhere.
However, as many, including myself, have argued, we currently face a growing crisis in government revenue. As a percentage of GDP, government revenues, both federally and provincially, have been mostly steadily declining for the past three decades and are near record lows. Revenue neutrality at best serves to perpetuate this status quo, both in fact and in giving it further ideological support.