The best tax is a consumption tax.
Taxing consumption is one of the most economically effective methods of generating government revenues without distorting the economy. Consumption taxes create incentives for individuals to save more of their after tax income and for business to invest more in their businesses.Consumption taxes are good taxes.
BC's carbon tax is an excellent shift in the tax mix – less tax on income and more tax on consumption – in a revenue-neutral fashion of course. Shifting the mix towards consumption and away from income taxes encourages savings, investment, and work, all the while helping to reduce greenhouse gas emissions in the case of our carbon tax.
BC’s decision to show leadership in reducing greenhouse gas emissions certainly isn't pleasing everyone. Especially all the climate change deniers in the NDP.
But the carbon tax is a plan based on sound environmental and economic policy (as a long list of environmental groups and 70 economists have endorsed) and it represents a good start in tackling the problem of green house gas emissions.
The tax does a great job of striking a balance between implementing a tax aimed at altering our behavior and at the same time it provides businesses and individuals to adjust to the increased costs over time. Could you imagine the howling if the three year carbon tax increases were implemented all at once? For those of you who have either never taken economics or if you are too stupid to understand, let me be clear; consumption taxes alter taxpayer's behaviour over time!
I have always been a big fan of consumption taxes - like the GST. I love seeing it on everything I purchase. It makes you think about your consumption; you see it every day at the till. It helps you make sound choices with your after tax income. I would prefer that governments lower our income taxes and increase the GST to a rate of 10% or higher in a revenue neutral way.
The carbon tax is another good tax that will go a long way to reducing the consumption of carbon in British Columbia. I strongly support any shift that moves the tax mix away from income towards consumption in a revenue-neutral fashion.
Premier Campbell keep up the good work!


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