A few weeks ago, Mike Moffatt wrote an op-ed that ran in the Ottawa Citizen and several other PostMedia papers to the effect that there simply isn't the will on the part of 99% of the population to do much about inequality: if there were, there'd be more popular support for the sort of tax-and-redistribution measures that would actually be effective in reducing inequality. Instead, we get stuff like this:
Ontario’s two opposition parties appear ready to unite to hand the McGuinty Liberals an embarrassing blow just days into a new session.
Progressive Conservative leader Tim Hudak said his party will support an NDP proposal to take 8% off the harmonized sales tax (HST) on home heating bills.
Here is the distribution of heating expenditures (electricity plus natural gas) in Ontario by income quintile, according to the 2009 Survey of Household Spending:
|Quintile||Income range||Average income||Income share||Expenditure share|
|Lowest||0 - $30,000||19,831||4.9%||10.3%|
|Second||$30,000 - $50,000||40,117||9.9%||15.0%|
|Third||$50,000 - $75,685||62,353||15.4%||19.6%|
|Fourth||$75,685 - $115,250||94,372||23.3%||24.4%|
Removing the HST on heating will cost a certain amount of money - apparently on the order of $350m. The share of those foregone revenues that will go to households in the highest income quintile is almost three times the share that will go to the low-income households that the measures' proponents loudly insist are its focus. More than half of the money will go to people in the top 40%; only a quarter will go to the bottom 40%. As redistributional measures go, it's more progressive than offering free yacht maintenance, but not as progressive as actually giving more money to those with lower incomes. (I don't take seriously counter-claims to the effect that high-income households deserve more public money because they spend more on heating.)
Here's something I wrote at Economy Lab during the federal election:
[T]hese days, the three major parties build their platforms on the following questions:
1) What are the socio-economic groups that can be persuaded to vote for us?
2) How can we get their attention?
This trend has had a homogenizing effect on the platforms. Since there are only so many categories that are in play, the parties end up chasing the same markets with similar boutique measures.
This has to be the reasoning behind this NDP-OPC joint venture. They both ran on interchangeable exempt-something-or-other-from-the-HST platforms. (I can never remember who promised to exempt what and can't be bothered to look it up.) And it's clear that both parties ran on those points because they played well with focus groups.
But let's put this in the broader perspective of the OWS protests. All of a sudden, people are showing a keen interest in inequality, and this should be the natural territory for the NDP. And this is the best they can come up with? A regressive, focus-group-driven gimmick that the OPC will cheerfully sign on for?
It probably is. If focus groups liked the idea of (say) increasing the HST credit - a measure that would actually channel public money to the bottom part of the income distribution - then maybe we'd see political parties campaigning on it.
(Another explanation that cannot be ruled out is that the ONDP has really terrible analytical skills and never thought to check if increasing the HST credit would be a vote-winner.)
And look at response from the Liberals. Did they reject the idea because it shoveled free public money to the top of the income distribution? No, they did not:
“Taking money off of home heating doesn’t create jobs.”
Even if they really believe that the measure was a) regressive and b) a bad thing because it was regressive, the Liberals also know from their focus groups that there's no way that this would be a winning argument in the court of public opinion. The only response that would play well is to invoke the "jobs" mantra.
Mike took a certain amount of flak for pointing out that although Canadian voters may be willing to talk the inequality talk, they clearly are not willing to walk the inequality walk. But I think that the burden of proof is on those who would claim otherwise.