This commentary (link below) on the blog of the BC Taxpayer's Federation is stupid. One would hope that the people who care about taxes could do some simple calculations. The author of the blog points out that some residents of BC "... are no further ahead—even with a $200 annual benefit."
If you divide the $230 payment that the BC government gives to a low income family of three by the actual amount of the tax they will pay on a litre of gasoline (or home heating fuel oil) you see that this family could buy more than 3400 litres of gasoline in a year before feeling any effect of the BC carbon tax. I have a family of three at home and use about 1200 litres per year in our car. So, even if this unfortunate family has to use heating oil or natural gas to heat their home the credit covers their extra costs to a considerable or complete degree.
Now think what happens to this family of three if they buy a more fuel efficient vehicle or change the way their home is heated (both difficult decisions for low income families as I readily admit). They save even more money by buying fewer or no carbon emitting fuels.
As for those who earn more than the threshold of between $30 000 and $35 000 (approximate) the credit is reduced by 2% of net family income until it equals zero. But the income tax rates in the two lowest tax brackets were also reduced to compensate earners in those categories and a one time cheque ($100) was written to every person living in the province. At the introductory rate of 2.41 cents per litre of gasoline, that $100 cheque allowed residents (all residents remember, even children) to buy more than 4000 litres of gasoline without paying a single cent of the carbon tax. This was a more than reasonable way to introduce this important new system.
The idea of the carbon tax is to make carbon fuels more expensive than other forms of energy to encourage those making decisions about using those fuels to look at alternatives. It forces users of carbon fuels to pay something for the additional costs, that have historically been ignored, of the pollution dumped into the globally shared atmosphere. It provides a benefit to people who stop burning carbon fuels. Various reputable sources of economic analysis say it's working. Many (most I believe but I can't back that up immediately with a reference) reasonable, rational economists say it's a good idea and a necessary one.
The taxpayer's federation seems to not understand how important an issue this is. It turns out that the carbon we've all been dumping into the atmosphere is nasty stuff that is changing the Earth's climate in ways that at the least will require us to pay the costs of adaptation and at the most will seriously affect where we live and how we do things like grow crops to feed ourselves. I think there needs to be a bit more thought given to the scope of this problem and to the solutions that will become necessary before the ageless lamentations of too much tax begin again. That's even more important in this case since there is clearly reasonable compensation for people who are the most affected by the usual increases in consumer or income taxes.
Surely there are some problems with the tax. It isn't being applied universally for example. Some important industries have exemptions (e.g. fuel used in manufacturing that is not burned, cruise ships!, some air transport). But there are also some credits for things like biomethane. Mostly it is being applied where we have the biggest carbon emissions in BC, the transportation sector.
The BC Carbon Tax is working well. It is the right thing to do. It's important to keep it and strengthen it in order to provide a necessary economic incentive to people making decisions to convert (burn) carbon fuel into carbon emissions in the atmosphere. And remember, the solutions, adaptation or mitigation, that we will have to pay for later aren't going to reduce our tax bills either.
Here are some links:
The act: http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/10_125_2008
The low income credit: http://www.sbr.gov.bc.ca/individuals/income_taxes/personal_income_tax/tax_credits/low_income_climate_action.htm
Some numbers: http://www.fin.gov.bc.ca/tbs/tp/climate/A4.htm
Business leaders advocate for strengthening the tax. They want it because it helps them make better business decisions.
#carbontax #britishcolumbia #bc