When I say that something is revenue neutral for me, I mean that it didn't change the amount in my bank account.
For example, if you give me $10 to buy you a meal which I buy and give to you, then it is revenue neutral to me. I got $10 and spent $10 - with nothing to show on the other side.
When the B.C. Liberals say revenue neutral, I am fairly sure that this simple meaning is lost in translation. Consider the carbon tax.
When the carbon tax was introduced, the Liberals said one of the key principles was that the tax would be revenue neutral - that all carbon tax revenue would be returned to individuals and businesses through reduction in other taxes and not used to fund government programs.
Sounds good, doesn't it?
My carbon tax contribution amounts to several hundred dollars per year (some $240 on heating; $120 on gasoline; and an untold amount on increased costs for goods and services). So, if this money that I am paying out, then I must be getting that money back, right?
After all carbon tax revenue should be returned to individuals for the carbon tax to be revenue neutral.
Strangely enough, I still find myself waiting for the cheque. I haven't seen one yet nor a decrease in my provincial income tax corresponding to the costs of the carbon tax either.
So what does the government mean by revenue neutral?
In the 2013/14 dudget estimates, carbon tax revenue is given as $1.187 billion.
That money is spent on a low income climate action tax credit of $115.50 per adult plus $34.50 per child; a five per cent reduction in the first two personal income tax rates; B.C. Seniors Home Renovation Tax Credit; Children's Fitness Credit and Children's Arts Credit; small business venture capital tax credit budget increases; and Training Tax Credit for individuals. The total is $568 million on personal tax measures.
Well, almost. There is this thing called the Northern and Rural Homeowner Benefit but I don't know anyone who has heard of it, let alone been sent a cheque for up to $200. Who qualifies?
But what about the rest of the money? There is still $617 million still on the table. Where is it going?
A total of $150 million went to General Corporate Income Tax cuts while $200 million was provided for a small business income tax cuts. That is $350 million of the total.
There are also a number of property tax and school tax credits along with $70 million for the Film Incentive B.C. Tax Credit and $88 million for the Production Services Tax Credit. Not even sure what the last two are but I would be willing to bet that they are part of the government tax credit programs.
Apparently, though, this is revenue neutral. Money leaves my pocket and ends up in the pockets of corporations and the film industry. I am pretty sure that means that I am paying them.
But from a government point of view, they are not keeping any of the money so that must be revenue neutral.
However, on the Ministry of Finance website, under the heading of "Myths and Facts About the Carbon Tax," we have this gem:
"Myth: The carbon tax is just a tax grab."
Fact: Every dollar raised by the carbon tax is returned to individuals and businesses through tax reductions. None of the carbon tax revenue is used to fund government spending. Since it was first introduced in 2008, the carbon tax has returned $500 million more to taxpayers in tax reductions than it has raised in revenue."
Say what? If the government is giving away $500 million more in tax reductions than is being taken in, there is really no way to define the carbon tax as revenue neutral.
I mean, if you had given me $10 dollars but your meal cost $15, then I am out of pocket and it is certainly not a revenue neutral transaction for me.
If the whole point is to shift funds from the relatively well-off middle class to low income individuals and corporations, then there are surely better ways to do that. Certainly there are more transparent methods.
However, the ministry's website goes on to say that the tax puts a price on carbon to: "encourage individuals, businesses, industry and others to use less fossil fuel and reduce greenhouse gas emissions."
How are we doing in that regard? Some organizations say that we are meeting our goals - even the David Suzuki Foundation. Other organizations tell us that gasoline consumption has not altered significantly except in response to the 2008 recession.
But after being in place for five full years, maybe it is time to consider just what the carbon tax has accomplished. One thing is certain - it hasn't led to the development of clean energy alternatives.
