Whoops! I was not thinking entirely clearly when I wrote this post. Proceed with caution!
Sitting in line for gas on the last day before BC's new Carbon Tax is imposed (hey, I was just unluckily low on gas, not hoarding!), I had some time to ponder the full impact of this legislation.
Absolutely nothing, that's what. Well, in an ideal, frictionless world there would be no impact - we can actually look forward to a small amount of productivity being lost in BC, with no decrease in carbon emissions.
If it was just a regular tax hike, it might result in more money being spent on greening our cities, or treeplanting, or another activity that will produce slightly less carbon than just going about life as normal.
But it's not a regular tax hike. In fact, the BC Liberals have gone out of their way to ensure this tax will absolutely 100% not decrease carbon emissions!
By law, government must show how all of the carbon tax revenue flows back to individuals and businesses as tax reductions.That's right. They hired a bunch of people to define and administer a brand new tax, spent some more cash mailing one time rebates out, and the net result is the money gets shuffled around a bit. I'll take them at their word that the resulting tax cuts will distribute the revenue relatively fairly and that this tax isn't particularly regressive.
Let's restate things one more time to be really clear: A bunch of money is collected. The BC Government takes a small slice off the top to pay for the salaries of the people that administer the program (or other tax dollars have to be diverted for that purpose - same difference). Whatever is left is given back to the people that paid the tax to begin with so that they can afford to by more carbon based products. Oh, and all the companies that have to collect the tax raise their prices a tiny bit to compensate for the extra overhead.
In summary: No reduction in carbon emissions, fewer people in the province doing productive work, and prices effectively go a tiny bit up on everything we buy.
Good job, geniuses.