Letter: Fearful Tax

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Editor, the Gauntlet,

In Mr. Hamonic's article ["A crusty ass carbon tax," Jesse Hamonic, Sept. 18, Gauntlet] he makes a point analogous to claiming that a tax on gasoline and similar products would be non-distortionary, much in the same way that the GST is considered non-distortionary. Basically, he said that such a tax would not change consumer behaviour. While there will most likely be some welfare loss from such a tax, which is what most economists would argue over, Mr. Hamonic would be hard-pressed to find people that think such a tax is not distortionary. The hand-waving argument of "all prices will increase" requires a large leap of faith to believe, since prices would all have to increase by the same proportion and this would have to apply to every single price in the economy.

One could argue that there is sufficient demand for "greener" products, even if evidenced solely through increased advertising for them. For example, Toyota was having trouble keeping the hybrid Prius, their most fuel efficient car, in stock due to high demand for fuel efficiency . . . or trendiness, depending who you ask.

Mr. Hamonic's point on the public's reception of the Green Shift policy is well taken. In fact, so much attention has been paid to the Green Shift that people are overlooking the rest of the fiscal policy the Liberals have put forth, such as reversing the income trust decision from 2007.

I am glad the Gauntlet has started to run this column and look forward to it in the future.