30 November 2010

Analysis: Kevin Falcon Enters BC Liberal Race

Kevin Falcon just now declared his intention to run for the leadership of the BC Liberals. Should he win, Falcon would instantly become Premier of this province.

The website of Falcon's campaign is now up and his inaugural speech for the Liberal leadership is available.

From this non-partisan's perspective, Falcon appears to deserve the "Campbell light" label others have stuck to him. His speech contains largely - almost to the point of ad nauseam - references to building and investing: building the economy and increasing the built environment.

There's no reference to the preservation of the natural environment.

More worrisome to me are these statements:

I'd like to begin a discussion about how people would feel about lowering the HST rate over time to 10%. Perhaps a 1% reduction in 2011 and a further 1% when provincial revenues are sufficient to accommodate it....

the best job we can do as government is ensuring we maintain a low tax environment

If a Falcon government would lower the HST, how would it maintain current programs, reduce the deficit, or pay for new programs (for, say, helping parents with dyslexic or autistic children, as Falcon suggests)? Where does Falcon suppose the money will come from, if not from increased income taxes? If Falcon were to lower the HST, he would have no choice but to raise income taxes or to increase fees, which is a form of consumption tax.

An increase in income taxes in conjunction with lowering the rate of the HST is the wrong direction to go in terms of overall tax policy. The HST is only 12 percent now, the lowest rate of HST in the country; it need not go any lower.

If Falcon is going to be 'Campbell light', then he must at least retain what good policy Campbell's government introduced. He must continue its direction of using consumption taxes to encourage or curb spending in certain areas and stop punishing earnings through income taxes. In other words, Falcon should

  • NOT lower the HST - tweak it, yes, so that, for example, expensive luxury items pay a higher rate.
  • increase the carbon tax, and
  • lower income tax.

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