I keep hoping that the Conservatives' throne speech proposal to reduce the GST by another percentage point will receive the recognition it deserves: derision and disavowal. The derision part seems to to be covered:
Plan to cut GST blasted: The Conservative government's plan to trim the GST for a second time has been soundly rejected as a top tax-cutting priority by a large group of economists surveyed by The Globe and Mail.
All 20 economists said other tax cuts would be better for the country than trimming another percentage point from the goods and services tax, which represents more than $5-billion in revenue.
It's a remarkable show of unanimity on public policy, given that the responses were from organizations as diverse as the Fraser Institute, the Canadian Auto Workers, Canadian Manufacturers & Exporters, Bank of Montreal and the Halifax-based Atlantic Institute for Market Studies.
But the Harper government doesn't seem to upholding its end of the bargain by disavowing the measure. Worse, it seems likely to be passed, even though he has a minority and none of the other parties support the measure.
In the last election campaign, the Conservatives ran on an immediate one-point reduction from 7% to 6%, followed by a possible further reduction to 5%. The best reaction to this idea was that of the University of Western Ontario's Jim Davies:
"Stupid, stupid, stupid, stupid," he said.
But the Conservatives won, and they did it anyway. But it's not at all clear that they actually scored any political points with the measure:
Voters cool to GST cut, Tories warned: The GST cut at the centre of the 2006 federal budget got a surprisingly rough ride from Canadians in focus groups that Ottawa commissioned to road test its fiscal plan.
The Conservative Party's campaign pledge to trim the hated goods and services tax was widely regarded by political pundits as a master stroke that helped the Tories win office, even though economists panned it as the wrong cut to make.
But many Canadians canvassed for the Department of Finance appeared to agree with economists, telling market researchers in focus groups that they felt there were better ways of offering tax relief.
"The most frequent argument raised in many of the sessions was that the GST was not the best tax to reduce," said a report prepared for the department and obtained by The Globe and Mail.
Canadians surveyed didn't buy the notion that the GST cut was the best way to deliver broad-based tax relief for all, Ottawa was told.
"This statement was viewed by many individuals as not true," the market researchers said.
Critics told focus group moderators they'd like Ottawa to chop income taxes or hike the taxable income threshold instead.
Stephen Harper has been exposed to training in economics, and he has a (by now, deserved) reputation as a political strategist. So why in the world is he pushing a policy that is bad economics and which will confer essentially no electoral advantage?