I usually whine about the Vancouver Sun’s lack of balance when reporting on political and economic affairs. So they deserve credit for publishing this piece, a Chad Skelton item that does not praise their favorite Premier or his graphic presentations in last week’s TV address. In the article, experts tell us to not trust graphs that hide labels on the Y (vertical) axis:
One of B.C.’s leading experts on tax policy says the charts Premier Gordon Campbell used in his TV address gave such a misleading picture of tax rates in this province that, had they been turned in by his students, he would make them do the assignment over again.
“If a student did this, I would say this is deceptive, maybe intentionally deceptive,” said Jon Kesselman, an economist with Simon Fraser University’s School of Public Policy. “I would say: ‘Fix this and resubmit.’”
James Brander, an economist with the University of B.C.’s Sauder School of Business, agreed.
“These graphs are misleading as presented,” said Brander, who, like Kesselman, has generally been supportive of the Liberals’ tax policies. “There’s this little book called How to Lie with Statistics and Chapter 1 says [to avoid lying] you shouldn’t do it this way.”
SFU economist Jon Kesselman is a proponent of HST but he has written about how changes in consumption tax should be accompanied with other changes. He might agree that HST is being oversold by some proponents. I blogged about Dr. Kesselman almost six months ago and had a subsequent email exchange with him. He was mentioned in the report Depends on what the meaning of ‘is’ is. To his credit, the economist admitted to accuracy of a challenge about business passing tax savings to consumers:
You are right that the taxes lost from rebates of HST to exporting industries will not be reflected in any compensating price reductions to BC consumers.”
I particularly like Dr. Kesselman’s willingness to address progressivity in taxation, an issue that cannot be separated from review of consumption taxes. In this Financial Post counterpoint, he wrote:
[Tax experts] cited concerns about how to implement this reform of personal taxes without reducing revenues or undermining effective progressivity.
One solution to this problem and Canada’s fiscal deficit is to shift the personal tax base further toward consumption while also raising tax rates at upper-middle and high incomes. The result would be a tax system that is more efficient and equitable while also generating additional revenues.
BC Liberals failed to initiate a reasonable public debate on tax policy before imposing HST. Had they conducted an effective discussion, taxpayers would tolerate a consumption tax, provided that other taxation changes were made to improve fairness and efficiency of tax collection. Consumption taxes are part of our future but we must fight for fair implementation.
Since the provincial government won’t begin the debate on fair taxation, academics or the political opposition must do so.