Thursday, 25 October 2012

NDP tax promises. It's not what they say, it's what they do that should worry us


Have a read of the following passage, after which I will ask you a question about it:

A New Democrat government will control government spending openly and responsibly.  We can’t solve every problem overnight.  We will set priorities.  New Democrat programs will be affordable and within our means.  We will not spend more than British Columbians can afford.

We will make sure that large profitable corporations and the wealthy pay their fair share of ... taxes.

A New Democrat government will balance the budget over the business cycle...and keep taxes fair...for everyone.

So now the question: who said this?

You might think it was NDP leader Adrian Dix in one of his recent speeches to the business community.  Over the past weeks and months, the NDP have begun laying out their fiscal policy in anticipation of the next election.  What are we told to expect? A modest increase in corporate taxes.  Re-instituting capital taxes on banks.  Perhaps an increase in income taxes for the very well-to-do.  It all sounds very measured.  Or, as Vaughn Palmer put it in his column a couple of days ago, “Not exactly rampant socialism.”

It’s a message that sounds a lot like the passage I quoted above, doesn’t it?

Except that passage is actually from the 1991 NDP election platform.

Now I know there are folks out there who want us all to lay off the history lesson.  Forget about the past, and concentrate on what the NDP are promising today.  And after all, what they are promising today looks so reasonable - who could complain?

Except that they made the same fiscal policy promises in 1991.  And once elected, they proceeded to break them.  Big time.

It’s actually worse.  In the immediate run up to the 1991 election NDP leader Mike Harcourt promised no new taxes, an even clearer and more definitive statement on tax policy than the passage I quoted from above.  And yet within a few weeks of the October election he was already backtracking on that promise.  As soon as November 29, 1991, Premier Harcourt was quoted in the media saying he had “not ruled out tax increases despite his ‘no new taxes’ pledge”.

And of course what followed were years and years of tax increases.  Not just increases in existing taxes.  They even created entirely new taxes.  In the 1992 and 1994 budgets, for example, the NDP imposed $2 billion worth of new taxes on everything from personal to corporate income.  Not just millions or hundreds of millions of dollars of new taxes.  Billions.

In November 1991, after getting elected on the platform promises I quoted from above, Finance Minister Glen Clark said, “the NDP’s campaign promise to introduce only two new taxes - a minimum corporate tax and a high-income tax surcharge - may not be feasible in the short term.”  

If that isn’t the definition of a Groundhog Day nightmare, I don’t know what is.  Turns out that NDP tax policy before the 1991 election was pretty much exactly the same as NDP tax policy today.  Some things, it seems, just don’t change.

So I want to be the first to say that I am interested in all of the policy proposals that the parties will offer voters in the run up to the election next May.  There’s more to government than fiscal policy.  But it all starts with fiscal policy, because that’s the foundation on which everything else is built.  And on fiscal policy I know everything I need to know about the NDP. The NDP are on exactly the same trail today that they were 20 years ago.  Their promises sound reasonable.  And yet by the time the NDP were finished with tax “innovation” in the 1990’s, British Columbia had the highest marginal tax rates in North America and we were a have-not province, dependent upon handouts from the rest of the country to support government spending.

Anybody feel like trying that experiment again?

6 comments:

  1. One of the issues I have with the NDP is that I have no idea what their intentions are for government.

    The NDP will have to try and close the gap between revenues and expenditures over a four year term in government. If the NDP does not they will become politically doomed faster than they would like think is possible.

    Based on what people on the left expect of the NDP, they will have to increase spending in BC at several times the rate of inflation. I do not see how the NDP does not increase spending significantly.

    How can they close the gap? The NDP will have to raise existing taxes or impose new taxes. There is no other realistic option on the table.

    The odds of the NDP not winning the next election is very low which means in BC we need to have a meaningful discussion on what are the most effective taxes to raise or introduce after next May. The public and business need to accept that for four years at least BC will have increased taxes, with that as the starting point there is then the ability to help frame the tax debate.

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  2. My prediction: The NDP will fall over themselves trying be friends with Business, who of course won't support them in a billion years.

    Real progressive actions will be sidelined, so the general public will be as disappointed with Dix as they are with Campbell/ Clark.

    As for me, we've had thirty odd years of tax-cutting, belt-tightening,and budget balancing (or at least claims) and I don't know single person who feels better off than they were Back in the day.

    Cut the fiscal BS, decide what ordinary people NEED, then tax to pay for it.

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  3. A recent line from one of Vaughn Palmer's recent columns nicely sums up my reaction to your post and your former colleagues' track record on this issue:
    " ... it takes some gall for the Liberals to claim the New Democrats can't be trusted on taxes. After all, it was the Liberals who sprung the harmonized sales tax on an unsuspecting public, 10 weeks after an election in which it was barely mentioned and then only as something not on the radar screen."

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  4. Liberals have a far larger image problem on 'reasonable taxation' than the NDP, and we don't need to look back to 1991 for that. Anyone who understands how wrong the HST was for average British Columbians, including for most small businesses, knows that Liberals can't be trusted on taxation.

    Barry is right, we need taxation that makes sense. As long as people see that their tax dollars are used wisely, we can stop any further financial BS.

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  5. Great comments, and I really appreciate it when people actually read and respond to my posts. Thank, all!

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  6. Shucks. I realize this was written prior to the recent BC liberals budget with it's increases in corporate taxes and income taxes on those making over $150,000 per year. Hey wait a minute, this sounds just like an NDP budget!

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