For the second time in two decades Canada has witnessed good tax policy making for very bad politics – a troubling combination in a democratic system.
This Commentary by AIMS Senior Fellow Brian Lee Crowley looks at the recent implementation of the HST in British Columbia and Ontario, the political fallout for the decision to harmonize taxes and how the HST, like the GST itself, is a much more sensible tax than the one it replaced and most criticisms of it are badly misplaced.
Many able economists, including Anne Golden of the Conference Board of Canada and Finn Poschmann at the C.D. Howe Institute have explained the main reasons why harmonizing the PST and the GST is a wise and prudent policy move. But for the most part they have not explained why it is such toxic politics.
Since the combination of good policy and bad politics is problematic in a democracy the subject merits our sustained attention. In Doing the Right Thing the Wrong Way, Crowley discusses the economic benefits of the HST while highlighting the flaws in our politics that keep us from making difficult yet necessary changes.
To read the complete Commentary click here
