Tuesday, 14 May 2013

Today's NDP embraces flat taxer "fairness"

Greg Selinger, Manitoba NDP Leader
and current Premier of Manitoba.

Image Source: Wikipedia
There've been many warning signs for left progressives and social democrats when it comes to Premier Greg Selinger.

We all know that Gary Doer was uninspired, unprincipled, and singularly obsessed with appealing to suburbanites in southern Winnipeg. Be it boutique tax credits or boosterism for unsustainable suburbs like Waverley West, Doer sacrificed the long-term sustainability of our province for short-term political gain. It's quite fitting that he's now a oil sands salesman down in D.C.

When Selinger became Premier some thought he would lead slightly from the left. After all, he has an inspiring enough background. He's the son of a working, single-mom who started her own business in a poor, inner-city neighbourhood (which, come to think of it, might explain the 0% small business tax). A relative of his struggled with mental health problems. He's been a social (as opposed to party) activist in the past. To top it all of he had the wonkish acumen to make credible policies for the betterment of Manitoba.

But, sadly for the progressive left, there's signs of a more regressive Selinger.

Current finance minister Stan Struthers.

Thinks flat rate taxes are "fair"
because the "cost [will] be shared by
everyone". Fails to note the "regardless
of ability" caveat.

Image Source: The Manitoba Chambers
of Commerce 
First he backed Harper's E.I. deforms, effectively throwing unemployed workers under the bus.

Later, he hiked regressive user-fees after running an election campaign offering boutique tax credits to appeal to suburbanites.

Now, he's effectively throwing the working poor under the bus with a 14.3%, no low-income rebate, sales tax hike.

His finance minister Stan Struthers has embraced the flat-rate taxer conception of "fairness" to defend this.

"The PST is the fairest way to reach these goals because the cost will be shared by everyone," Struthers said, adding Manitoba's sales tax will remain the third-lowest in the country.

("Sales-tax hike to boost flood protection, but province first has to rewrite balanced-budget." Bruce Owen and Larry Kuschlaw (May 4, 2013). Winnipeg Free Press )
Selinger's finance minister is striking a stake through the moral centrepiece of fiscally progressive thought: that  those with less ability to pay should pay less. Struthers's flat taxer idea of fairness implies that a working poor janitor and a millionaire heir paying the same flat rate on their purchases is fair because "the cost [is] shared by everyone", regardless of financial capacity.

New fairness: Everyone shares the cost equally,
regardless of ability to pay.

Image Sources: Statigram (top)

J.G. Janitorial Services LtD (bottom) 
Without rebates (which the provincial Liberals have rightly argued for) the PST is grossly regressive. This is so because any small purchase will make up a larger share of a working poor Winnipegger's income than a wealthy heir's. Thus, flat rate sales taxes are regressive on the basis of income.

The 14.3% or 1 percentage point increase in the PST, along with the accumulation of user-fee hikes over the years, will disproportionately hurt the poor. This sharing of costs theme sounds a lot like the hollow pleas south of the 49th parallel for "shared sacrifice".

The weak, powerless, and those with broken backs do most of the hauling while the able wealthy carry a lighter load. Some "fairness".

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