Thursday, November 02, 2006

Taxing Income Trusts

The Canadian government broke an election promise, yesterday. They announced they will tax income trusts.

There is no policy problem to which the proper solution is the increase of taxes. Furthermore, the Tories' explanation about how they needs to "plug a hole in their revenue" just days after the revelation of their massive surplus simply isn't credible.

And that doesn't even mention the appalling political consequences of flat-out breaking an election promise. The only way the Conservatives were going to form a long-term governing alternative was to appear trustworthy. They've been widely viewed as unrelentingly evil for a decade; overcoming that should be their number one priority. This broken promise badly hinders their progress on that front.

There is simply no way this is a good decision. If the imbalance is a problem, you can fix it by lowering corporate taxes. Any reduction in federal taxes can be sold as a solution to the fiscal imbalance.

This was a terrible decision, and because Harper's such a micro-manager this will all end up being his fault in the public's eyes. This government is doomed.