Explaining the Green Shift from another vantage point

This is based on a piece I wrote recently for a local newsletter:

The Liberal Party of Canada just put out a major policy initiative called the Green Shift. I’d like to explain how the Green Shift will help make taxes fairer and position Canada to succeed in the 21^st century.

Have you ever thought about why the government chooses to collect revenue in certain places but not others? Let's ask the question, “What taxes should be collected to pay for government programs?” I think you’d agree that taxes are a drag. Whenever you tax something you discourage that activity. But you’ve got to raise money somewhere. One place where governments raise money is excise taxes on tobacco and alcohol. Taxes on consumption of those products are not as harmful to society as taxes on other activities. So it’s “safer” to tax those things.

Well then what about income taxes? If you think about it, income taxes discourage people from hiring workers and from earning incomes. Workers are more expensive to hire, and they take home less pay.

Are there things we don’t mind discouraging, that we could tax instead of income? Why not pollution? If we taxed pollution we would only be discouraging something which we don’t want anyways. So let’s lighten, a bit, the taxes on our income and shift the burden over to one kind of pollution: greenhouse gases! Greenhouse gases are emitted when we burn fossil fuels. There’s already a federal excise tax on gasoline, so we can leave that alone. But there is no such tax on, for example, coal, the dirtiest fossil fuel of all. Let’s phase in the shift over four years to let people adjust. That’s the idea behind the Green Shift. The tax on greenhouse gases is called a carbon tax because when you burn a fossil fuel, like coal, you emit carbon dioxide and contribute to climate change. Climate change is threatening the welfare of our children, grandchildren, and many generations to come.

We are shifting taxes in the Green Shift, not raising them. So income taxes will be lowered using the money raised from the carbon tax. There are also a number of protections built into the Green Shift plan for those who are especially vulnerable to energy price increases. Seniors, children, middle and lower income earners, rural and northern residents all get extra money back. A $1 billion contingency fund will be set aside to help out municipalities, schools, hospitals and other non-profit institutions. Everybody, including individuals and businesses, will get a tax break. A 50 year old with an income of $30,000 would get $350 a year. Make it a rural resident and they would get $500 a year. Add a child and that goes up to $1078.

More importantly, everybody will be working together. Everybody will pay for the greenhouse gas pollution for which he or she is responsible. Everybody will earn a reward if they consume less. The Green Shift is just one step. We have to develop technology, build infrastructure, and change our habits. But with the Green Shift, everybody will have a financial incentive to do his or her part to change how we use energy, to energy-proof our economy by reducing our dependence on fossil fuels, and to position Canada for success in the 21^st century.