Angry in the Great White North

I've been trying to nail down how Liberal Party leader Stephane Dion's carbon tax and a traditional sin tax, like a tax on cigarettes, are different. They are obviously very similar:

• They are both allegedly supposed to modify human behavior
• They are both attached to something that is nominally harmful
• Since not everyone commits the sin being targeted, only some people pay the tax.

The carbon tax has problems in being characterized as a sin tax. 

The goal, allegedly, is to modify the behavior of Canadians when it comes to the amount of energy they consume.  But energy consumption, unlike smoking, is a consequence of external factors -- distance to a job, harshness of the weather, the need to store and prepare food.  The room for modification is limited.

Is carbon dioxide emission harmful?  Obviously not.  Is excessive emission harmful?  When someone explains how Canada's 2% contribution is harmful while China can emit with reckless abandon, we can return to this point.  Otherwise I'll relegate it to the irrational Hate-the-West facet of the climate change farce.

Are there people who aren't consuming energy being supplied by some carbon-emitting process?  Perhaps a handful living in some sort of experimental wind-power hut.  But if these solutions were practical, cheap, and scalable, we'd all be doing it already.  Most people don't smoke.  Everyone consumes energy.

OK, so maybe it's a matter of scale.  Cigarette taxes target far fewer people than a carbon tax, but the principle is the same.

Maybe it is just a sin tax writ large.

But reading over the reactions people have to the notion of the carbon tax, I realize that the carbon tax is not like a regular sin tax because everyone uses energy.

A carbon tax is inherently divisive.  It will put Canadians against each other, which is unlike any other tax. Those other taxes typically united Canadians to revile the government implementing the tax.

The constant refrain from the Liberals is that the carbon tax will include some sort of preferential treatment for rural Canadians or Canadians on fixed incomes or Canadian who don't pay income tax.

So money collected by the carbon taxman will be divvied out not in an equitable way (that is, to compensate each taxpayer for the pain inflicted by the carbon tax on that taxpayer), but by constituency.

Stephane Dion and the Liberals will categorize certain Canadians as rural.  Presumably suburbs will be excluded, but what of exurbs?  Exurbs are rural communities that are no longer involved in traditional rural activities, like farming.  Instead, people in exurbs commute a greater distance to the city.  Do they get compensation, or are they not rural enough?

The same goes for fishing villages where most people don't fish, or logging communities where the economy has moved beyond logging.  Are they rural?

What if people living in cities start to look for properties in the exurbs in order to gain the carbon tax break, with no intention of living a rural lifestyle?  Does the carbon taxman try to punish them for being faux rural folk?

People on fixed income get some sort of credit.  The elderly are the classic group here.  Does an elderly Canadian lose his or her carbon tax benefit if he or she enters a care facility?  I suppose it makes sense if that person is no longer personally paying for electricity, but he or she might still be paying for food, so will the extra benefit be pro-rated in some way?  Or does the home simply increase the fees charged in order to claw in each tenant's carbon benefit? Who will make sure that increase is in line with the carbon tax break?  Or will the carbon taxman shift money from elderly taxpayers to homes for the aged at tax time?  Maybe homes for the aged become a preferred industry and get their own custom-made carbon tax break.

And then there are people who don't pay income tax.  Life is hard enough for these people whose income doesn't rise above the minimum taxable levels.  But then not everyone who doesn't pay income tax is poor.  Students might not pay income tax if their parents are paying for their tuition and living expenses.  Those students could help the environment by going to school near home and living with their parents instead of consuming all the extra energy that comes from occupying a separate living space.  Should those students get carbon taxed for not making the choice to live at home?  Will the parents be forced to pay the extra tax?  Or will students be given preferential treatment by the Liberals?

If two people are living together, but filing separate returns, each below the carbon tax level, how does the carbon tax code catch them?  Presumably together they are able to carry the burden of the carbon tax for the energy that they are consuming.  Does the carbon taxman start checking addresses.  Will tax returns coming from the same dwelling be combined to ensure that every living space in which the total income is sufficiently high is thoroughly taxed?  For people at certain income levels, wouldn't that encourage them not to live together, and so consume more energy separately, in order to slip below the carbon tax line?  What sort of creative means of evading the carbon tax will people undertake, especially those at the borderline?

But really, what this means is that some people will be given tax breaks based on some inherently arbitrary decision taken by Stephane Dion and the Liberals.  Rural people will get a break, but what is rural?  Just an address, or an occupation as well?  Elderly people on fixed income will get a break, but based on age only, or on their lifestyle and independence?  People who don't pay tax will get a break, but will there be a test to see if they really deserve the break, or will that tax be hoisted on those who might be subsidizing a low income lifestyle (deemed unnecessary in terms of energy usage) for someone else?

And as Stephane Dion starts granting breaks to these people, but not those, and as the carbon tax grows year after year, people who are paying are going to wonder just what makes some people special?  If I'm paying the full tax, and not getting any break, and my income tax cut is less than it could be because of the need to fund these breaks for other people, I will wonder just what I did that was so bad. 

It's not like smoking.

I'm not doing something different from these other people.

I don't have much choice in what energy I consume.

And I have to pay more for energy but get less back, just so that someone else doesn't have to pay at all?

Does that sound like a formula for civil bliss?  On the other hand, if Stephane Dion can bribe the right constituencies with special carbon tax breaks, he can use the frustration and the friction to pull these groups to the Liberal Party and keep them captive.  They would be dependent on the tax breaks funded by other Canadians that the Liberals have decided are not worth special consideration, either because their electoral numbers are small, or because they can be counted to vote Liberal in sufficient numbers regardless of their carbon tax frustration that their criticism can be ignored.  In any case, their anger directed to those getting the break (really anger at not getting a break themselves) will help keep those people in the Liberal orbit.

The inequitable distribution of the carbon tax becomes a political fault line that Stephane Dion could exploit by carefully plotting where that line will go.

When Stephen Harper cut the GST the first time, it was cut for everyone.  When Stephen Harper cut the GST the second time, it was cut for everyone.  When Stephen Harper created the Universal Child Care Benefit, every parent, regardless of means, got the same amount per child per year.  When the Conservatives created the Tax-Free Savings Account in the last budget, it was not designed to only give certain benefits to certain people, while excluding others.

There is no us versus them in these Conservative tax changes.

But with Stephane Dion's carbon tax plan, some groups will be favored over others.  If one of the ill-favored groups is sufficiently organized and makes enough noise, I suppose that group can get a special break too.  As for finding the extra money, all that's required is for Stephane Dion to jack up the carbon tax.  The extra money can fund the expanded scope of the carbon tax break.  The justification?  Stephane Dion can hide the increase behind some balderdash about the impending global climate emergency.  And if Stephane Dion is really clever, he can enlist those Canadians who are enjoying his beneficence to attack those other Canadians who are paying the full tax.  I mean, clearly, they are energy wasters, endangering the planet.  They deserve to be paying the full carbon tax.  They are environmentally bad people, while the people getting the break are environmentally good people.

Maybe Garth Turner was right.  Stephane Dion is gathering his chosen people around him with his carbon tax break, while the bad people are forced to pay full penance.  I guess there is something almost messianic about it after all.