Liberals take us down yellow brick road - spend, then tax

[Gone_Fishin]

John Ivison: Liberals take us down yellow brick road with ‘spend, then tax’ budget

John Ivison | March 23, 2016 10:04 PM ET





The front cover of this year’s budget features a mother and daughter walking down what looks suspiciously like a yellow brick road.

Perhaps the finance minister, in some subconscious moment of sincerity, was acknowledging the best hope of slaying the deficit is to follow the path to Emerald City and seek out the Wizard of Oz.

That seems a more realistic prospect than the measures taken in budget ’16 sparking the growth necessary to bring the economy back into surplus.

Politics in this country has just become real, after four months of rhetoric and posturing.

Bill Morneau has tabled the biggest social spending budget since the introduction of the Canada Pension Plan in the 1960s.

But if I were Rona Ambrose, I would ask the finance minister by how much he intends to ramp up his revenues to pay for the largesse he has just distributed around the country.

Snip


The Liberals have long been accused of being guilty of taxing, then spending. That appellation will have to be revised – they look set to become the party of spending, then taxing.

The Liberals have long been accused of being guilty of taxing, then spending. That appellation will have to be revised – they look set to become the party of spending, then taxing.

I would also ask the government for details about the $2 billion “low carbon economy fund,” squirreled away deep in the budget documents, with little to no explanation as to its purpose. It appears to be a slush fund designed to induce the provinces to accept a federally mandated floor price on carbon. But the documents do not elaborate.

“Never has so little been said about so much money,” said one person familiar with the development of the budget.


Snip

Yet we are now entering a period of protracted budgetary shortfalls that look unrelenting.

Public opinion polling suggests there is extreme nervousness about deficits higher than the $10 billion promised in the Liberal platform – an Ipsos Reid survey from this week said only 15 per cent of respondents support a $30-billion deficit.


Snip


The Liberals added insult to injury by hacking the funding for military equipment by $3.7 billion over five years. The explanation provided was that they were merely shifting the money to future years, but it had the happy coincidence of flattering the bottom line and keeping the deficit below $30 billion.

Complete story is here - http://news.nationalpost.com/full-comme ... tax-budget

[Glacier]

Andrew Coyne: Liberal’s $30B deficit a debt of choice, not circumstance

Let us review the case for the budget the Liberals have just unveiled.

Canada’s economy, on this view, has been struggling under the yoke of years of Conservative austerity, public services deliberately starved of funds by years of Conservative tax cuts.

On the other hand, Canada’s public debts are modest, by international standards, and interest rates are low. Therefore the government has both the opportunity and the obligation to borrow now, to invest in the kinds of public infrastructure that will stimulate economic growth.

Even if the resulting deficits are larger than advertised in the last election, this is what Canadians voted for. Any other course would not only have required the government to impose deep and damaging cuts in spending, but to break important campaign promises.

All of these points have been in heavy rotation since Tuesday. Should any one of them prove false it would greatly weaken the government’s case. In fact, all of them are.

[occasional thoughts]

Tax is the word typically used to describe the bulk of the resources used to pay the price for social services, from veterans' pensions to concrete infrastructure to armed forces, air traffic control and safety, border security, and so on ad nauseum. Certain forces have succeeded in having the word utterly demonized over the years, but only people of limited intellect (usually right-wing types it seems) approach the subject with a dishonest disconnect between having social services and paying for them. They're not free; if we've got them we have to pay for them, if we don't want them, we have elections available to get rid of them. Learn to love democracy in bitter action.

Mr. Trudeau is being equally dishonest, fooling the Canadian people, by incurring massive expenditures and running such a deficit as is now planned without raising taxes to pay for things. We need to pay for things we consume, whether public or private goods. Or postpone or dispense with them.

[hobbyguy]

There have been some tax increases at the high end. I suspect that we will see a carbon tax shortly.

The yellow brick road thing has been played by many politicians of all stripes. The previous government promised, more or less, that we could "have it all". Lower taxes and still have the services we expect of government - well that just doesn't work. Just as the myth of "lower taxes will bring increased government revenue through growth" is utter hogwash.

But it is comforting to bask in, for all political stripes, the notion that you can have something for nothing. Certainly sells well during elections.

Within the existing budget are a couple of things that trend toward cost cutting. One of those is combining multiple programs (child benefits) into a single program. That logically should be more efficient and less costly to administer. The second, and important one, is that the operating costs of government are capped for the foreseeable future. With negotiated increases upcoming, that will see the bureaucracy downsized and forced into efficiency as there will be little or no room to replace retirees. I haven't yet verified that cap for myself, but it was mentioned in an interview with Andrew Coyne and Chantal Hebert...

But yes, get used to it, higher taxes (a measure of our personal contribution to the country) will be coming. I am all for that if the funds are wisely applied.