Carbon Tax: Higher Unemployment, Lower Take Home Pay

Supporters of carbon tax promise that it will be "revenue neutral". Some even go as far as claiming that shifting some of the tax burden from income to carbon would accelerate economic growth. That however is extremely unlikely to happen:

Other jurisdictions' experiences with carbon taxes also raise concerns. In British Columbia, where an allegedly revenue-neutral carbon tax was the centre-piece of this spring's provincial budget, the Canadian Taxpayers Federation estimates it could cost consumers and taxpayers up to $1-billion each year.

Denmark's carbon tax, introduced in the mid-1990s, succeeded in reducing carbon emissions -- but not in the way intended. All the carbon reductions came from shuttered factories and lost manufacturing jobs. While emissions fell 10%, manufacturing employment fell 25%. The reductions came at the expense of workers, not carbon producers.

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Don't forget higher gas prices, higher food prices (which won't get any lower if crops are turned to ethanol and bio-diesel)... With higher unemployment and less revenues from personal and corporate income taxes - where will the government find the money for the personal tax cut which is supposed to offset the carbon taxes? If anything - employment insurance premiums will go up as there will be more people drawing from the fund...

And another thing: The National Post describes Dion's endorsement of carbon tax as "recent flip-flop". Last spring Dion suggested that carbon tax wasn't a policy good enough for the Liberals to adopt. But wait, it was last spring when the Liberal committee members sided with the NDP and the Block and voted carbon taxes into the Clean Air Act. Did they do that against their leader's will? I doubt it.