Mini-budget blogging

Ok, Ok, it's been a while since I've blogged, but it's been busy here at Castle Evil. Between work, military and party commitments, there just hasn't been much time to do any blogging. So now that I have a few minutes here we go.

I've watched with some interest the banter back and forth over the financial update of the Harper government. It seems that with the throne speech not gaining the Tories any traction in the polls, a mass of tax cuts is in order. So we have the Tories re-instating the low income tax cuts the Liberals put in place that the Tories subsequently canceled as well as further tax cuts for non-poor Candians. It's a shame that the Tories couldn't have cut the taxes for the people who need it the most, the poor, from the start. I suspect they've discovered that a "screw the poor" platform wasn't getting them votes in truckloads.

As to the tax cuts themselves, yet another ill advised cutting of the GST is in the offing. Now before the Conservative apologists come out of the woodwork, I was in favour of the GST from the start, as value added consumption taxes are the only way to ensure the rich actually pay tax without putting an undue tax burden on the poor. It would have been far better for the Tories to leave the GST alone and institute larger personal income tax cuts. This would have left more money in the hands of Canadians, and would lower their tax burden as they would simply not have to spend their money on discretionary expenditures to avoid further taxes. Of course this would mean the rich would have to pay more taxes, as they are the ones that have the means to purchase more non-essentials.

As to the cuts themselves, there is much to be read there. First off, any limiting of the government's ability to spend is a very neo-con idea and plays well to the base. Given that the throne speech mentioned that the Harper Tories will attempt to limit federal spending, massive tax cuts is the first step in doing this, after all the federal government can't spend what it doesn't have. It also gives the Tories a further excuse to cut programs they disagree with, after all, they can't afford to pay for them. It all begins to point to the neo-con dream of a federal government who's sole purpose is to deal with other countries and fight wars. The only question at this time would be what's next on the federal chopping block?

There are some problems with massive tax cuts. As I have already alluded to, there will have to be less program spending to avoid deficit. This will necessarily cause further reductions in programs and services that Canadians have come to expect from their government, though as I've also pointed out, is what the Conservatives really want. It also means that the government will have less flexibility to deal with emerging situations. Emergencies can occur and do cost money. By cutting taxes too deep, the government is leaving itself open to being unable to react to changing situations. Further, if Harper's government continues on it's road of sucking up to the Bush Republicans, there'll be no extra money in the budget to have a Canadian contingent to any military action in Iran (not that I see a lack of Canadian involvement in that as a bad thing.)

Now I'm sure some of you out there of the more right leaning persuasion are going to ask the inevitable "WHAT? You LIKE paying taxes?!?!?" that I've seen popping up all over. Well, no, I don't. I suspect most people don't like paying taxes. I do however like the things that taxes pay for. Without taxes we'd not have most of our transportation networks, for even those that are in private hands, were initially started with tax dollars. Education and health care are also important functions of government and require healthy injections of tax dollars. Myriads of other services the government provides which make this a better place to live from Canada Council grants to environmental monitoring require that we pay taxes to pay for it. The US provides us with a cautionary tale here. Massive tax cuts combined with massive spending on emergencies and foreign military adventure have lead to massive deficits and debt. So unless the Tories and their supporters are suddenly wanting to resurrect the deficit and prevent pay down of the debt, they'd better be careful how much tax they get rid of. The economy is currently robust so it can afford some taxation. In some jurisdictions in the country a slowdown in economic growth would actually be a good thing, allowing for society and infrastructure to catch up. What the Tory mini-budget is really for is purely political, to try to gain votes, and not for the good of the country.