Academic economists, those not doing Faustian deals with the likes of the Fraser Institute or Colin Hansen, determine that consumer taxes such as HST can be a worthwhile element of fair taxation. However, each states that fairness requires a balance of different taxes, that one should not be dramatically changed without considering the overall impact of the entire tax system. That has been one of my problems with implementation of HST in British Columbia.
Today NDP leadership candidate John Horgan issued the best policy announcement we have seen from either government or opposition. The highlights:
John Horgan announced that under his leadership, government would establish a Fair Tax Commission responsible for examining and reporting on the total impact of the HST, provincial taxation, user fees, licences, natural resource royalties and the range of other government imposed costs on citizens and businesses.
For the past decade, the BC Liberals have made income tax and business tax cuts that benefit the wealthy few, while boosting the burden on ordinary British Columbians with the HST, MSP premium increases, hydro rate hikes and a whole host of licensing and user fees,” said Horgan. “This reliance on taxation-by-stealth is both bad public policy and breeds contempt for our public institutions.”
The Fair Tax Commission would produce a comprehensive report on how government raises the revenues it needs to pay for vital public services and ensure that citizens, small businesses and corporations have a full understanding of what they contribute to the province’s coffers.
“The negative impact of the HST and the uncertainty over the future of the tax undermine consumer confidence, small businesses and the investment climate,” said Horgan. “Should the tax be repealed this year, government will need to develop a smarter plan for how it is going to raise revenues without simply shifting costs onto ordinary citizens.”
Horgan’s statement stands on its own so I will not add comments except to repeat that this is the best policy proposal on the table by any BC politician.
Categories: Fraser Institute, Horgan, John, HST
in-sights.ca 
I don't see how this gets the NDP any votes in the election. I expect them to tell me what programs they will implement and how they'll pay for them before the election, not after. No blank checks!
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Actually Norm – the problem wasn't the Carter commission or its recommendations – it was the way Benson ignored them.
Unfortunately you can't get a readable version of the Carter Report on the web – you can buy one from the Government though.
The Royal Commission on, under Kenneth Carter, appointed (1962) by PM John Diefenbaker to examine and recommend improvements to the entire federal TAXATION system. The 1966 6-volume report said fairness should be the main objective of the system; the existing system, Carter found, was too complicated and inefficient, and under it the poor paid more than their fair share while the wealthy avoided taxes through various loopholes.
Carter and his colleagues proposed that the same tax be levied on increases in economic power of the same amount however earned – as Carter said, “a buck is a buck.” Had its recommendations been implemented, the commission estimated, nearly 50% of taxpayers would have their taxes reduced by more than 15%; 10% would face increased tax liabilities of more than 15%, and the remaining taxpayers would notice little change.
The wealthy, paying more taxes, would nevertheless share in the benefits of an efficient taxation system. A White Paper was released in 1969 which proposed implementation of some recommendations. The opposition, from several provincial governments oil and mining companies and small businesses, was so strong, as it had been to the report, that the Trudeau government retreated from any major reform.
The eventual new Income Tax Act contained many special exemptions and incentives which the commission had found objectionable and it removed the federal Estate Tax Act, which had been a significant obstacle to the increasing concentration of wealth.
We had a chance – and it was blown – the results are now available for all to see.
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“My recollection is the key recommendation was reduced property taxation coupled with increased personal income tax. Not sure how that goes over with the voters who rent“
Since property taxes fund services that directly benefit propety owners, like sewers, water systems and transportation/access infrastructure – it is not an unfair burden to property owners to contribute to such services. Of course if it didn't seem to Communistic, they could form their own co-operatives to provide these services, but on another level that is what government is supposed to be – a co-operative activity to serve the citizens.
As far as “how that goes over with the voters who rent” – if property taxes were reduced and the savings shared with the tenants, I would imagine the tenants would have no problem. On the other hand if they greedily hogged the savings for themselves as Big Business has done with their savings under the Harper Scam Tax, renters would be justifiably not too happy with the situation.
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Liberals and New Democrats will be running to look at the outcome of the 1993 Bob Rae Fair Tax Commission. My recollection is the key recommendation was reduced property taxation coupled with increased personal income tax. Not sure how that goes over with the voters who rent. Much material for debate.
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Zweisystem:
Send the idea on to the candidates. Your website makes good points repeatedly that transportation options chosen by BC politicians are questionable. Rather than formal commissions, we could use committees of the legislature, if they were allowed to function properly. However, as long as the Premier exercises all power with his clique, the MLA inputs are unwelcome.
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I remember the Carter Commission which was supposed to 'simplify' the tax system. Instead, the resulting 'reforms' created a new breed of wealthy tax consultants who became necessary for taxpayers to figure out how to deal with taxation matters. The system grows more complicated from year to year and, although I dispute the Liberal HST implementation, I had much experience with the old provincial tax act and waged great battles with them over issues in the film industry. It was a clumsy system. Taxation will always be difficult but at least it must start with government's commitment to fairness and openness.
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Whoops! Just one tiny point that mustn't be forgotten – there is every probability that there will be no HST by the time the next election rolls around – a fair tax commission shouldn't (and I hope wouldn't) simply look at the situation we have (or will have) in place. It should look at the issue of taxation from a more functional point of view as a means of devising the most equitable and fair way to provide the necessary revenues for government to do its job and provide necessary public services and social 'goods'.
The kind of thing I'm thinking about would have its closest parallel in the Carter Royal Commission on Taxation. I think that's what we need – provincially AND federally and I never tire of pointing out that this would today be a fundamentally different country had the recommendations of that commission (appointed by the Diefenbaker Government) been adopted.
If Horgan means he's willing to go all the way with a Carter-style commission then I'm all for it.
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A fair tax commission sounds good to me.
How about a Royal Commission on urban transportation and transit?
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Hey Ron, are you a John Horgan fan?
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Actually it was a three pointer (field goal).
Horgan will return the kick-off off for a touchdown, and follow that with a two point conversion.
The other team cries foul, the ref(us) gives them a 15 yard unsportsmanlike penalty and John does an off-tackle, flea flicker down the middle for another 7 points.
In desperation, the other team tries a hail christy into the end zone which John intercepts and sprints to the goal line and an easy win.
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This conversation has reminded me of a proposal from MLA Bruce Ralston which really address the concern for a lack of unadulterated information the public can rely on about taxes and economic programs. You'll find information here: http://bcndpcaucus.ca/en/ndp_proposes_budget_watchdog_to_restore_openness_legitimacy
Ralston is pretty smart fellow about this stuff.
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Thanks, I dare say we completed an exchange that was reasonable and unhysterical with points to consider on both sides of the issue. Should we advise Keith Baldrey of this unusual event?
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Gotcha, I'm perhaps too focussed on winning the election. From a public policy perspective you are absolutely correct. Anything that helps better inform public discourse on these issues is welcome!
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You may be correct from an NDP partisan`s POV but I think Braidwood demonstrated the potential power of an open commission when he investigated the RCMP, Taser use policies and use of force generally. It is the world`s single best review of its type. Braidwood published not only his reports but daily transcripts of testimony and allowed live video feeds.
By the thoroughness of Braidwood`s investigation and the public nature of the questioning of key witnesses, we were shown exactly what happened. There was no doubt at all, once we had seen testimony and examined body language as witnesses answered questions. That told us much more.
Wouldn`t it be wonderful to see so-called experts tested in a public forum about taxation. True democracy will be closer when citizens can participate in the formation of policy but to do that, citizens need good information. Other words on these pages demonstrate that providers of news and information are biased and corrupt.
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That's what happens in elections – the broad support of the people is sought. A commission isn't compelled to seek the broad support of anyone.
The NDP should clearly state its taxation proposals, and defend them with the data that you and I know exists. If we are right, that the Liberals have shifted the burden onto the shoulders of those least able to pay, then broad public debate and eventual support should follow.
If, however, you are suggesting that Horgan be specific about the moves he favours, the commission seems a bit of unnecessary filigree.
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With respect, I disagree. It is time to allow every citizen to debate taxation, which is closely tied to the ability of government to deliver services. The Liberals have followed devious policies to benefit their financial supporters by shifting burden away from the citizens most able to pay.
It is not good enough for the NDP to undo the worst Liberal policies without engaging everyone in a fair and fundamental review. Let us select the taxation system that achieves goals of most citizens, not simply those with the ear of the ruling party.
Horgan or other candidates can still be specific about moves they favor but they need broad support of people. Liberals never sought that, they just imposed that which Gordon Campbell and his puppeteers decided.
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I appreciate what John is trying to do, which is to punt. The problem with the punt is that sometimes the opposing team runs it back for a touchdown. That's why most teams will leave the punt to the last down – as possession of the ball is a more assured means of advancing toward the goal.
This cuts both ways: 1) It leaves an ambiguity for the Liberals to exploit come the general election, it doesn't in anyway limit the imaginable pocketbook cost of voting NDP, and; 2) It doesn't give supporters any assurance there will be anything other than a commission report collecting dust at the end of the exercise.
I'd also be concerned vested interests with money would succeed in capturing the public discourse during the hearings and deliberations of the commission – at least in an election there are limits to what can be spent supporting a particular platform.
The best approach for the NDP, whoever is leader, is to plainly state their intended tax changes and campaign on them.
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