Wednesday, October 27, 2010

Layton 5% Rebate: Christmas Bonus

Jack Layton... Ac-tor!

The NDP may have recently stumbled on the winds of change:
  • Toronto (Mayor Elect Rob Ford)
  • realized taxing the rich is counter-productive
  • a populist move to remove the consumption tax on heating your home.
Jack should consult others on economic policy.
Then as now, there were people who failed to make the distinction between tax rates and tax revenues. Mellon said, "It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue for the Government, and that more revenue may often be obtained by lower rates."-Andrew Mellon
John Maynard Keynes pointed out in 1933 that lowering the tax rates can increase tax revenues, if the tax rates are so high as to discourage economic activity.
President John F. Kennedy made the same argument in the 1960s -- and tax revenues increased after the tax rates were cut during his administration. The same thing happened under Ronald Reagan during the 1980s. And it happened again under George W. Bush, whose tax rate cuts are scheduled to expire next January.
Just in time for a Christmas this policy announcement is a bonus for the wealthy and energy companies.
Jack Layton is showing practical leadership to make your life more affordable. (1)
Starting with a plan to lower the cost of essential home heating:
    * Drop the 5% federal sales tax on your home heating.
    * Re-introduce the popular ecoEnergy retrofit program – so you can afford to make your home more energy efficient.
    * End the subsidies to the very big polluters that are gouging you on your home heat bill. (2)
This is a practical first step to ending the affordability crisis.(3)
Rhetoric vs Reality
The Federal Government has earned a B+ from the Canadian Energy Efficiency Alliance 2009 Report. Details on Page 3.  Those directly affected in the trade involved in the audits and retrofits are unhappy as this subsidy is not continued beyond 2011. Subsidies still exist from cities and provinces for retro-fits.

Prime Minister Harper addresses the Canada-U.K. Chamber of Commerce in London

29 May 2008
First, last year we began removing the special tax incentives brought in by our predecessors that actually encouraged and subsidized the growth of the traditional oil sands industry.  We are phasing those out and replacing them with incentives for the deployment of green technology only. (2)
Canada’s economic resilience is partly due to our important moves in the area of taxation. (1) We are lowering taxes of all kinds: personal, family, consumption and business.  Under measures introduced last fall, the tax burden at the federal level in Canada will fall in the next few years to its lowest level since the early 1960s.  In fact, the combined federal and provincial rate of corporate taxation will be the lowest in the G7 by 2012 and we are on track to have the lowest tax rate on new business investment in the G7 by 2010, so there is no doubt that these are good times for Canada.
Rest here.
Save the planet or save my party Jack invokes populism of freezing homeowners, seniors on fixed pensions while ignoring the provinces and  cities have authority to limit the double digit increases in the rates of energy this winter.
The math shows that the least likely to benefit are the poor or working class as their small volume in consumption will result in the smallest tax break. The NDP seems to have forgotten their argument against the GST reduction of two points on all purchases: the most wealthy would benefit the most from a reduction in the federal taxes on energy for households.(3)
Large homeowners benefit most with NDP tax break 5%
The wealthy homeowner, landlords and businesses that use higher volume of  energy to heat their homes will save the most money this winter with the populist policy of the NDP.
Jack your fetish for the unsustainable Green Economy is blind to damage on taxpayers in Europe who have seen their job losses and energy rates double.
What do you think?

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