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Well, last time this happened we got Rae Days, the Public Sector unions balked and Rae's reputation was ruined. This time we have a minority government.

A nominal expenditure freeze implies that public sector contracts will have to be reneged on. That will eliminate any possible NDP support. Health cuts pay not fly with the Tories at it will alienate their base of seniors.

We could choose the "Shangwen" stragegy of delisting marginal health procedures, the annual physical being first on the list. In BC and New Brunswick these are not covered unless ordered for a specific reason as they are not considered medically necessary.

Actually I would not cut the Local Health Integration Network strategy, I support it. As a diabetic I know that complex diseases aretime-consuming (and therefore expensive) to manage if health care providers do not work as a team. Complex diseases and complementary health services do need some level of co-ordination to deal with them effectively.

The bond-rating agencies are fishing if they think Ontario will default; the Federal government has the authority to prevent that and they have used it in other provinces in the past, the last time was Saskatchewan in 1993.

The Shangwen strategy may indeed be the way to go but it needs to be part of an overall approach to deficit reduction. i don't think there is any credible possibility of Ontario defaulting but Ontario does need to get its act together when it comes to its finances. The biggest concern I have is if interest rates start to rise as given the size of the debt it will generate a substantial increase in servicing costs. The one fortunate thing is that interest rates so far have stayed low.

Fair enough, but in a Minority Government picking who loses matters. If they don't support the Government there is a 50/50 chance they support one of the two opposition parties needed to pass legislation.

Second, "Grand Political Opera" or positioning is as old as the hills as a political/communication strategy.

Picking losers and thereby picking winners is always a partisan/political process.

You'd have more credibility as an independent economic analyst if you didn't ignore the option of raising taxes. What would happen to Ontario's finances if the Harris tax cuts were rolled back?

Well, I am pleased to hear my Mandarin name (尚文) stand as a synonym for an unpopular political measure; obviously I've been consistent in my comments. But I am inclined to agree with Livio and Determinant in different respects--those particular cuts would indeed be small, but there's no avoiding the selective ugliness of it. The health care unions and the professional associations would--obligatorily--be opposed to them. They will not offer any solutions.

I suspect any politician contemplating (or having nightmares about?) cuts is prone to scope insensitivity bias--they forget that the outrage over a $10 billion cut will be only slightly larger than the outrage over a $1 billion cut. So cut away, I say. We suffered it in the 90s and few remember it. Indeed, it forced a positive change in norms: no one expects a three-night stay after an appendectomy any more.

It may be "unjust " or panicky to talk about the 1% or whatever the number is. It remains that the realy big expenditures come from a very small %tage of the population. That's why we share between everyone to avoid catastrophic burdens. But it also remains that a very large proportion of expenditures are in the last few months of life and do not significantly alter either duration nor quality of life.

No political problem is ever solved in calm. As the taoist saying goes "As long as you have the choice, it is too early to decide".

Jim:
Raising taxes is always a possibility. Please see my January 2nd 2012 post for the balance you are seeking.

We really do need to think about taxes. We make such huge demands for efficiency in government, and this is getting unrealistic. No human endeavor involving thousands of workers is ever going to run completely without waste. Not that we shouldn't try.

We worry too much that raising taxes might reduce the size of our economic pie. It might or it might not. But I am sure that re-distributing the pie more equally would help the poorest much more than it hurts the richest. If you take $100 from a millionaire and give it to someone on welfare, which one will notice the difference more?

@Jacques: The more recent estimates (Becker et al) are that, on average, the last year of life constitutes about 25% of lifetime healthcare consumption. (Of course, as you would expect, this is also very modal.)

I'm not sure where Drummond is getting this 1% of population = 50% of HC costs....sounds bogus to me.

McGuinty could be in the position that Chretien was in, and that many people sensibly advised Ignatieff to take on: namely, to appear centre-left but govern from the right, thus muting leftist criticism of huge welfare spending cuts including health care, and thus doing all Canadians a favor. He could get away with it. Chretien did, and Ignatieff could have too if he and his advisors had had the sense in their heads. Politically, that is the only way out of this. Even the French socialist party has had senior members saying this.

Just demonstrating that the ON gov't is able to implement something approaching a reasonable policy response would be a great start. The last thing we need is the kind of foolishness we saw out of Congress in late summer.

A sales tax increase of 1% and a nominal spending growth freeze would seem like a reasonable place to start. I doubt it would imply catastrophic cuts to core services.


Shangwen"He could get away with it. Chretien did, and Ignatieff could have too if he and his advisors had had the sense in their heads. Politically, that is the only way out of this. Even the French socialist party has had senior members saying this."

The difference is that Chretien didn't actually cut spebdibg "health care", "welfare", "education", his government didn't provide health care, welfare, and education. He cut transfers to the provinces, the provinces had to catch the political flack for spending cuts (or even freezes) in those areas. McGuinty can't play the same game.

Patrick
"A sales tax increase of 1% and a nominal spending growth freeze would seem like a reasonable place to start. I doubt it would imply catastrophic cuts to core services."

Perhaps not, but another sales tax increase (because, let's be honest, the harmonization of PST and GST probably wasn't revenue neutral) would probably put paid to any hope of re-election. Plus, I doubt that the Liberals could sell it in a minority parliament (the Tories aren't to sign off on any tax increases, and the NDP won't sign off on a sales tax increase).

As for a nominal spending freeze, I note that the government has failed miserably in trying to negotiate a voluntary wage freeze in the public sector (pre-election, at a time when you might have thought public sector unions would throw them a bone to keep the Tories from getting elected), so I don't have a lot of faith in their willingness to impose such a wage freeze (though I'm certain they'd have the support of the Tories in doing so). Wage freezes (or roll-backs) are probably the way to go (since, at least in the short-run, you can save money without adversely affecting servives - and if you believe that public sector compensation is above market and reflects the monopoly power of public sector unions, then you can do it without affecting service in the long-run too).


Well thank god someone came out and said it.

I'm disappointed you didn't address any ways of increasing revenue. Eliminating many tax expenditures, for example, would help close the gap.

Out of all the options mentioned so far, which one is not political suicide, especially for a minority government? Public sector wage freezes.

Yes, eliminating tax loopholes, cutting spending, laying off public servants, cutting services, raising the sales tax, etc. Those would all help too. But the government are not going to do any of that unless they had a huge majority with a lock on the next election.

@Bob, re my Chretien reference. Correct. I understood that, but it is true that it would be easier for McGuinty to cut spending while pointing the finger at a real villain, rather than blaming "fiscal conditions".

@Sina. Livio mentioned taxes on Jan 2.

@Bob: In AB I'm a little removed from ON politics. Seems to me that McGuinty et. al. are in trouble one way or another so why not try the road less traveled? Propose sensible policy and see if it sticks. At least then they can take their place on the opposition bench and wait for their "I told you so" moment when they can be re-elected.

Re Livio's Step 2 (cutting health expenditures). What an ugly topic. But there is no way to look at controlling deficits without cutting health, even if policy adventures like those in Step 3 are also to blame. I heard Michael Rachlis speak a few weeks ago and he is advancing the view that health care inflation is not a big deal (CIHI data). Maybe it isn't. But the point I try to make here so often is that the level of health care spending, regardless of its growth rate, is still a problem. It does not add to our lives the way we think it does. It has not driven our improvements in health. It is not as good, as effective, or as necessary as we believe. So why is it there? Public choice reasons or, if you like your language OWS-flavored, special interests.

You can cut health care expenditures and the population will do fine. But the politicians will not do fine--they will be in the ICU.

The painful part is that you can take a hard, evidence-based approach to this and cut a significant part of health spending without adversely affecting the public, but it will all be hated and run against popular biases. We should cut public health, mental health, specialist consults, and diagnostics. As they say about Frank's Hot Sauce, we put that s*it on everything. But public health is taboo in the land of SARS and Walkerton, mental health is the saucer-eyed Tiny Tim of health rhetoric even though it is beset by voodoo and massive overspending on pharmaceuticals and psychotherapy. Specialists are hugely overused, especially in chronic disease. Cut spending on "prevention" programs; they don't work.

"@Bob: In AB I'm a little removed from ON politics. Seems to me that McGuinty et. al. are in trouble one way or another so why not try the road less traveled? Propose sensible policy and see if it sticks."

Fair enough, and I agree that politicians should take political risks in implementing good policy (as McGuinty did with the HST). But that only makes sense if they can actually implement the politically risky policy. The problem facing McGuinty is that he can't implement any legislative policy (sensible or otherwise) over the objection of both opposition parties (i.e., they need at least one of the NDP and Tories to abstain to get bills through the legislature. Furthermore, I don't see them being all that successful at attracting floor-crossers to prop up their numbers, if anything the Liberals might lose members). Since an HST increase is untouchable for both opposition parties (a position that is unlikely to change), that's a policy that can only be pursued after the next election (and I strongly suspect that the McGuinty Liberals don't want to fight an election on a proposed HST increase).

Politically, what I can see as being feasible is some kind of income tax increase (and we've already seen the Liberals go soft on implementing the last stage of their corporate income tax cut) supported by the NDP (although, I suspect that the NDP has the good sense to just abstain from votes on tax increases rather than vote for them). Similarly, I know the Tories are all too happy to support any effort to legislatively freeze (or rollback) public sector wages, while letting the Liberals wear the political blowback (since the Tories can support such a policy by just not voting against it).

Bob Smith:

My belief has always been that staggered corporate income tax cuts were a way of sweetening the HST with conservative minded voters and that once reelected the Liberals with the HST in place would hold off on further cuts if they needed the money.

Politically I don't think the old game of abstaining form votes works anymore and thus I have always thought an unplanned election due to the stubborness of the party leaders and the need to maintain support among base is much more possible than people think. I think what has changed over past few months is that the top ranks of the NDP are looking at softening poll numbers nationally and perhaps are beginning to think some form of enhanced cooperation with the Liberals might be pretty desirable after all federally and in Ontario.

Sina: "I'm disappointed you didn't address any ways of increasing revenue. Eliminating many tax expenditures, for example, would help close the gap."

What Ontario tax expenditures do you have in mind? Because it's easy to say "cut tax expenditures" (just like it's easy to say "cut spending"), it's a lot harder when you start looking at specific tax expenditures. For example, it happens that the Department of Finance just released it's analysis of federal tax expenditures this morning (http://www.fin.gc.ca/taxexp-depfisc/2011/taxexp11-eng.pdf). Given that the province has a substantially similar tax base, there's a lot of potential revenue there. On the other hand, taking a look through that list, I don't see a lot of tax expenditures that are (a) politically vulnerable, (b) not justified on sound policy grounds and (c) worth a lot of money (and keeping in mind that Finances estimate should be taken with a hefty grain of salt). I'm all for whacking expensive (or even inexpensive) tax expenditures that aren't justified on solid policy grounds, but if those are politically popular, that isn't going to happen.

In any event, the ability of Ontario to eliminate tax expenditures is limited by it's tax collection agreements with the federal government under which the federal government collects and administers the Taxation Act (Ontario). Of course, Ontario could alway scrag that agreement and go back to administering its own tax act (although that would entail significant compliance costs), or it could renegotiate that agreement with the feds (although that puts McGuinty in the pockets of the federal Tories), but I don't see either of those as being strategies that they're going to be keen on adopting.

Tim: My belief has always been that staggered corporate income tax cuts were a way of sweetening the HST with conservative minded voters and that once reelected the Liberals with the HST in place would hold off on further cuts if they needed the money"

I'm not sure about that. Corporate tax cuts aren't the sort of policies that voters (conservative minded or otherwise) latch on to (for the same reason that delaying those cuts likely isn't going to be a vote loser). I agree that the corporate tax cuts and HST are related, in the sense that both are intended as policies to modernize Ontario's business tax system.

Tim: "Politically I don't think the old game of abstaining form votes works anymore and thus I have always thought an unplanned election due to the stubborness of the party leaders and the need to maintain support among base is much more possible than people think."

But remember what we're talking about here, parties abstaining from supporting policies that they support, but which are potentially politically unpopular. This is somewhat different kettle of fish than the game the Federal Liberals played (of abstaining from votes on policies that they said they opposed). That's clearly not sustainable, and is likely to undermine the party base (a point which the Federal grits never grasped). Provincially, the NDP and the Tories aren't going to force an election over income tax increases/wage freezes, respectively (since they each support those respective policies), but they might abstain so that they could say (disingenously, but since when did that ever stop a politician?) that they didn't vote for tax cuts/wage freezes and that Dalton McGuinty was solely responsible for everything bad that happened (the risk, of course, is things turn around and McGuinty gets all the credit, but I don't think this government's lifespan is going to be long enough for that to happen).

Tim: "I think what has changed over past few months is that the top ranks of the NDP are looking at softening poll numbers nationally and perhaps are beginning to think some form of enhanced cooperation with the Liberals might be pretty desirable after all federally and in Ontario."

First, I don't think the federal NDP numbers are all that relevant to the provincial NDP (since the federal numbers largely reflect the absence of a leader and declining support in Quebec, neither of which is relevant for the provincial NDP). Second, the provincial NDP is likely to want little (if anything) to do with the Ontario Liberals (heck, the federal NDP doesn't want much to do with the Federal Liberals). In fact, given the leaks that are coming out of the Drummond report (and the reality that Ontario's budget won't be balanced by relying on the fiscal pixie-dust that forms the basis for much NDP fiscal policy), I don't see a healthy long-term relationship between the McGuinty Liberals and the Ontario NDP.

Bob Smith:

I guess the way I would look at if I was the NDP is that if they actually want to get into government they are going to have to have to make some arrangements with the Liberals at both levels. Having said that parties can refuse to accept the obvious and as Reform and the PC's did federally for over ten years. At this point at the provincial level in Ontario it is hard to see the provincial NDP as anything but a spoiler to the benefit of the Conservatives. Just to get official opposition(over the Liberals in an election lost to the Conservatives) would be a pretty big stretch for the Ontario NDP.

Sina:

It is unlikely Ontario would scrap the tax collection agreements with Federal Government as it was a pretty big policy plank of McGuinty's to enter into them on the corporate and sales tax side to begin with. The are options for refining the agreements. One proposal I have heard is to go back to a 1940s style Tax Rental Agreement on the corporate side but this would need the consent of the other provinces(I can see Alison Redford transfering Alberta CIT collection to the feds if she wins the next election Quebec on the otherhand is unlikely to make any changes). The other is that there are ideas out there to refine the allocation of GST/HST revenues to the participating provinces but realistically I don't know how much money we are really talking about here.

Shangwen:

I attached your name to the strategy of putting every health procedure to the microscope. You have a great way of being skeptical and I believe the health system should face regular skepticism like everyone else, but in this case I think you have gone too far.

For honesty's sake I have been a patient of the mental health system and I am much the better for it. Ontario does not cover psychotherapy (psychologists), it does cover social workers. When my town built a new hospital (our old one dated from 1948) the mental health department wound up in the basement in smaller quarters than planned since few donated to it. It wasn't an attraction for donors.

Mental Illness is real.

Tim: "I guess the way I would look at if I was the NDP is that if they actually want to get into government they are going to have to have to make some arrangements with the Liberals at both levels. Having said that parties can refuse to accept the obvious and as Reform and the PC's did federally for over ten years."

It's been discussed elswhere, but the key point is that the difference between the NDP and the Liberals, in terms of both substantive policy and party culture, is (and always has been) significantly greater than the differences between the PCs and Reform parties . Not only did many of the founding reform members start their careers in the PC party, but even during the bitterest years of their split, they quite happily co-existed with PC party members within a single party at the provincial level (notably, and with some success, within the Ontario PC party, but also in the Saskatchewan Party, the Alberta PC party, the BC Liberals). Bob Rae notwithstanding, you just don't see examples of the same relationships and overlap between the Liberals and the NDP.

In fact, truth be told, once you set aside the rhetoric (on all sides), there's much more policy space between the NDP and the Liberals (in Ontario and elsewhere) than there is between the Liberals and the Tories (to give you a pointed example, the Ontario Liberals harped loud and long when in opposition about the Harris income tax cuts and welfare cuts - support/opposition for which policies were the litmus test for whether you were a right-wing nut or a progressive thoughtful person, or so I'm told, in the 1990s - and promptly did nothing to reverse those policies once elected (As Jim Rotham noted above, with respect to tax cuts. In fact, real welfare rates continued to fall under the McGuinty government and were only recently increased to the levels they were at when McGuinty took office).

Tim: "At this point at the provincial level in Ontario it is hard to see the provincial NDP as anything but a spoiler to the benefit of the Conservatives. Just to get official opposition(over the Liberals in an election lost to the Conservatives) would be a pretty big stretch for the Ontario NDP."

No doubt David Peterson said much the same thing in the summer of 1990 ("Damned NDP, they're going to help the Tories win")! And I seem to recall that being conventional wisdom last spring when the pundits were advising everyone that Jack Layton would support the Tory budget because his party would be smoked in an election.

@Bob Smith @Tim

There are Ontario-specific measures that cost a lot of money. By eliminating the exemption for prepared foods under $4, books, feminine hygiene products, etc., by my count will save the province close to $700 million each year.

The Ontario Energy Clean Energy Benefit, though it only goes up to 2015, costs over $1 billion per year.

Ontario can unilaterally eliminate these.


I'm using figures published here:
http://www.fin.gov.on.ca/en/budget/fallstatement/2011/transparency.html
http://www.fin.gov.on.ca/en/budget/fallstatement/2011/chapter3.html

Bob Smith is entirely correct. The NDP is an entirely separate and different party from the Liberals; they were never a part of the Liberal Party anywhere and have spent their entire time since the 1920's with the rise of the CCF competing against the Liberals. In fact it was the rise of the CCF in Saskatchewan in 1944 that drove the Liberals to the left, a point reinforced in the 1960's after the federal Liberals were gutted in 1957/58.

C.D. Howe was a big government/big business man, he was a corporatist if you want to pigeon-hole him. I cannot under any circumstances see a Liberal like C.D. Howe, the man more than anyone else responsible for the Liberal Party's myriad of corporate connections, being part of the NDP.

The problem isn't the NDP, it's that the Liberal Party is an unusual creature in Western democracies and in Westminster systems in particular. The Liberals are a brokerage party that isn't doctrinaire. The Canadian Liberals are a direct survival of the British Liberal tradition that died out in the UK and never really existed in Australia (their Liberals are Tories, the Australian Liberal Party is conservative).

Conventional Left/Right analysis doesn't work very well with the Liberal Party and in doesn't work so well generally in Canada where politics is more regional/tribal than it is ideological.

Bob Smith:

My personal feeling is what happened last spring federally and what happened in Ontario in summer of 1990 are once in a generation fluk events having said that I can't really predict the future. As I said before I have always believed the natural desire of both the NDP and the PC's is to go an election as soon as possible however, I do have to think there would some trepidation on the NDP's part to helping a now more vocally conservative Tim Hudak into office than there was six months ago. I might be wrong though.

I agree there is a bigger policy gap between the NDP and Liberals than the Liberals and the Conservatives that is why the provincial and Federal NDP parties are so closely aligned. Many Federal NDP members up to now could never think of supporting a non NDP party for example at provincial level whereas many Federal Liberals over the years have supported the BC Socreds, the Lougheed era Alberta PC's(and perhaps the Redford era ones too), the Sasketchewan Party, and more recently you have seen some Quebec Federal Liberals such as Marlene Jennings come out in support of the new CAQ party(I suspect there were also more than a few Federal Liberals that secretly voted for Mike Harris especially in 95). On the other side Conservative supporters for many years have supported the BC and Quebec Liberals and during the Reform PC divide years members of both sides supported the provincial PC's in Alberta, Manitoba, and Ontario. To be fair right leaning provincial NDP parties in places like SK, MB and NS have gotten Federal Liberal support too it just doesn't tend to run in opposite direction.

I thought it was interesting that Brian Topp has been making statements critical of Jean Charest now that Topp has announced he is running in Quebec. I think it is a very legitimate question of Topp as to what party WILL he be supporting in the next Quebec election.

Sina:

The exemption for prepared foods under $4 is a big one in terms of revenue. My own feeling is the Ontario govt in the broader realm of economic policy needs to start pushing the Feds eliminate productivity killing policies in areas such as Air Travel(the exorbinent ground rent Pearson Airport pays), Telecommunications, supply management, etc that impact Ontario more as a trading province compared to some of more natural resources dependent provinces.

@ Determinant 3:51: My point in my previous comment (which, I admit, had some overblown rhetoric) was not that the illnesses in those areas are dubious, but that the real-world service as delivered is extremely uneconomic, unlike what we read about in RCTs and policy proposals. I appreciate the personal comments and am glad the service was available, and my intent is not to minimize those who are ill. My core point, however, is that most mental health services exemplify many value-for-money problems in health care. I've been involved in a number of program reviews, and over-delivery or over-consumption costs (costs past the point of cure) were not atypically 50% or more (i.e., $10,000 consumed when the patient was cured by the $5000 mark)[chronic disease exempted].

I'm not nearly as knowledgeable about party politics and taxation as others here. However there can be no discussion about deficits without looking at cuts to or freezes for health, an area that is bedeviled by signalling and public choice problems. The fact you can have a cost-center that is significantly overvalued and constitutes 40% of your budget, but which everyone is afraid to touch, is, to put it gently, interesting.

Well, the good thing about WCI is that we can dial back the rhetoric and get back to interesting discussions.

I will admit that mental illness has a measurement problem because of the nature of the diagnostic tools and current state of practice. Unlike infections, say, which have a solid base of biochemistry, microscopic measurement and blood tests to measure inputs (antibiotics) and outcomes to a fine point, mental health lacks this technology standard for the most part. But 100 years ago biochemistry was still in its infancy as were chemical/microscopic techniques. We cannot predict what mental health will look like 100 years from now.

Second, about the NDP and provincial politics, it is worthwhile pointing out that the Conservatives, Liberals and NDP all have different cultures and structures when it comes to federal/provincial wings.

The Conservatives have independent party structures at both the federal and provincial levels. There is no direct or formal organizational linkage between the federal/provincial levels or across provinces anywhere. Additionally the Conservatives don't exist as such in BC, Saskatchewan or Quebec.

NDP is the direct opposite. When you join the NDP, as I did, you join both the Federal party and the provincial party of your province of residence in the same application. Both are the same organization and it is the provincial office that keeps the membership list. The NDP is not 11 different parties; it is 1 big party with 11 parts. (There is no provincial NDP in Quebec which is covered by the Quebec Section of the Federal party. The Ottawa office looks after Quebec.) Similarly there is one membership fee. When you join the NDP you also pledge not to support any other party (this was originally meant to keep Communists out, actually). Buzz Hargrove was stripped of his NDP membership for supporting the Liberals a few years ago.

The Liberals are a mix. In Atlantic Canada the federal and provincial wings are the same organization. In the other provinces the provincial party is independent of the federal party, except the BC Liberals have nothing to do with the federal Liberals. In Quebec the Quebec Liberal Party cut all ties with the federal Liberal Party in the 1960's after the National Unity debates started to heat up. Since there is no Quebec Conservative Party many federal Tories there are provincial Liberals.

The point is that the NDP is the most unified and centralized of all political parties across and on the federal/provincial front. Given this fact, the support pledge and the fact that the NDP drove the provincial Liberals in Manitoba and Saskatchewan to extinction, there is no love lost between the Liberals and NDP.

Historically the CCF/NDP was the political face of the Social Gospel Movement, the Protestant Christian Left. That's where the NDP came from. Tommy Douglas was a Baptist Minister and the United Church has long been known as the NDP-at-Prayer. I know of two United Church ministers who sit as MP's or MPP's/MLA's and the past NDP Premier of Saskatchewan, Lorne Calvert, was a United Church minister. The NDP historically never did well among Catholics who were a Liberal base, nor among Francophones (these two groups strongly overlap). That changed dramatically last federal election.

Sina: "feminine hygiene products"

Yeah, great way to alienate 51% of the voting public to save $30 million dollars (on top of the fact that there is a sound policy rationale for that particular HST rebate). I suppose McGuinty could also get rid of the point of sale exemption on books, children's clothes and sales to First Nations, but only if he was keen on Ignatieffing the Ontario Liberal Party. Moreover, not only are those rebates politically senstive, they have at least some reasonable policy rational (literacy, helping families, yada, yada, yada). The only HST tax exemption that is clearly unjustified by any meaningful policy rational (other than popularity) is the prepared food rebate.

I'm not saying that you can't (or shouldn't) cut tax expenditures to round up a few extra bucks (certainly where the tax expenditures in question can't be justified on any basis other than popularity), but looking through the list, once you eliminated the ones that a either political sacred or serve important policy functions, it isn't clear that you're going to find much more than a few extra bucks.

As for the Ontario Clean Energy Benefit (strictly speaking, not a tax expenditure), sure, the government could get rid of it. On the other hand, since they just introduced it last year to ward off political defeat, I'm not sure how likely that is.

@Bob

I'm not sure cutting those exemptions would be as unpopular as you say -- or more precisely, more unpopular than the alternatives.

If we are discussing politically unpopular service cuts, I don't see why eliminating tax expenditures instead doesn't fit into the discussion.

As for policy rationale, my personal opinion is that there are much better tools for achieving those policy goals that you mention (literacy, inequality, etc.) than an exemption in the sales tax.

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