Okay, the Ontario NDP actually announced plans to reduce gasoline taxes. To me this is an SUV subsidy. Oh, and it’s an oil company subsidy too.
I get that people are unhappy about the high cost of gasoline, but if we reduce gasoline taxes, we’ll have to increase some other form of tax. This would punish the responsible people who have efficient vehicles and reward people who have gas-guzzlers.
Another unpleasant side effect of lowering gasoline taxes is that it indirectly makes it more difficult for green energies to compete. It would also increase the number of cars on the road. The only positive I can see is that it might buy some votes.
Now I can go out and buy that Canyonero I have been looking at.
ReplyDeleteAnyone care what the Ontario NDP are announcing?
ReplyDeleteLet's face it, this election is the Conservatives to lose.
@Anonymous: You may be right, but it wasn't my intent to focus on the politics. Any other party may adopt the same policy (cutting gasoline taxes). I think this would be a mistake.
ReplyDeleteMichael, thank you for pointing the silliness of this NDP initiative. I really hope that more people see the issue of subsidy being applied to many of our industries, eg. auto making, nuclear energy, fossil fuel energy exploration and production and stop railing against the subsidies provided for in the Ontario Green Energy and Green Economy Act of 2009.
ReplyDeleteWhat looks worse? Wind turbines or energy transmission lines criss-crossing the province? We have just gotten used to the latter, even though they are ugly and have wierd sounds emitting from them.
@Sustainability Matters: I can't say that I know enough about the details of the green energy acts to have an opinion on their quality, but in principle I'm in favour of subsidizing green energies for a while to encourage innovation.
ReplyDeleteYeah, and the Tories want to remove the HST on hyrdo bills, which is equally stupid. I'm tempted to vote Liberal just because of these two idiotic policies.
ReplyDeleteIt's not just an SUV subsidy; it's a subsidy for those who live in rural areas who tend to drive more than more urban; it's a subsidy for those who need their cars for work, and it's really a subsidy for every vehicle owner.
ReplyDeleteI don't agree with any of it, but it's not fair to say it's an SUV subsidy.
*FWIW, I'm an SUV-driving urbanite in BC where no one pays the provincial portion of the HST on gasoline.
@Patrick: I'm not a fan of reducing taxes on any non-clean energies.
ReplyDelete@Mark: It's a subsidy for those who use a lot of gasoline and a punishment for those who use little gasoline (and will pay more when some other tax is increased to make up the lost tax revenue). I don't agree that this is a subsidy for every driver; some drivers use very little gasoline.
I chose to use the SUV as a symbol of high gasoline consumption. I don't think this is unfair.
Bear in mind that gasoline taxes hurt the poor more than the rich. The poor, though they spend less than the rich, pay a higher cost for gasoline as a percentage of their income.
ReplyDeleteThe way to encourage people to not drive gas-guzzlers is to tax those vehicles more at the point of sale, say, a progressive tax on vehicles that cost more than basic transportation.
@Ahmed: Almost all costs are a higher percentage of income for the poor compared to the rich. I think that since the poor have the option to buy gas-efficient vehicles there is little need for additional subsidy. I'm not trying to take away people's SUVs; I just want them to have to pay some gasoline taxes.
ReplyDeleteCreating a progressive tax on gas-guzzlers implies an income test. This would create an incentive for poor people to buy a vehicle on behalf of the wealthy. For example, my son has a very modest income and could buy a car for me to drive. Of course I'd give him the money to buy the car and the only reason for the convoluted purchase would be to minimize the progressive tax. Making this work while preventing such abuses looks to me like it would require too much government interference into people's lives.
@Michael James-
ReplyDeleteA small subsidy to those who use very little gasoline is still a subsidy. I would imagine someone with no car and uses no gasoline (directly anyway), would make this argument.
@Mark: You're ignoring the fact that the government would have to increase taxes in some other area to make up for the losses on gasoline taxes. Most of those who use very little gasoline would come losers in this scenario.
ReplyDelete@Michael,
ReplyDeleteBy progressive tax, I meant on the vehicle, not who buys it. For example, a $20k vehicle, no tax. A tax on the next $10k of vehicle cost, a higher tax yet on the next $10k of cost, etc.
Perhaps I should have said a tax on luxury vehicles.
@Ahmed: In some ways gasoline taxes achieve the same thing as a progressive tax on the vehicle price or fuel efficiency. The advantage of the progressive luxury tax is that its progressive nature can be made as steep as desired. On the other hand a gasoline tax is much more directly targeted to fuel consumption. Personally, I think both are needed.
ReplyDeleteIf you want to be part of what the NDP used to be join
ReplyDeletehttp://www.socialistpartyofontario.ca and http://www.youtube.com/watch?v=Mv_FeO45HmA