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Death and taxes

08 Apr 2020 | News Roundup

In the face of a pandemic-driven economic meltdown of increasingly terrifying proportions, Justin Trudeau has reversed himself on a number of issues from shutting the borders to sidelining parliament. We understand the need for flexibility in a crisis and the possibility of changing one’s mind given changing circumstances. But on the carbon tax increase we’re seeing a rigid insistence on full steam ahead. Is it really the time? As the Canadian Taxpayers Federation’s Aaron Wudrick noted, for the sake of national unity and the economy “It would be such a simple gesture to just hit pause on this, but no.” On the other hand, Trudeau always maintained that the carbon tax would magically put more money into people’s pockets than it extracted. So perhaps now would be a good time to triple or quadruple it, given peoples’ pressing need for cash. Or was that all just hogwash from the beginning?

It has also been suggested, on the contrary, that the tax doesn’t matter right now because gas is currently so cheap we’re all wishing we could drive somewhere just to make room in the tank to take advantage of prices under 70 cents a litre, so the tax will have minimal impact. (Since we could all use a laugh when times are hard, someone else recently tweeted that “It’s like being 16 again. Gas is cheap and I’m grounded.”) But in fact when the economy is reeling, impacts are magnified.

Which is why it’s important to set priorities, both on substance and on messaging. And raising the tax on essential energy sure is an odd one right now. Especially given how quickly they’ve managed to hand out $120 billion or whatever the number is today, including $55 billion in deferred taxes, can’t they spare this much revenue? Just for now?

If they need reassurance that it’s OK to show flexibility in a crisis, the pandemic has forced a number of otherwise green governments to roll back their ambitions in the face of economic and medical disaster (in big ways and small). But we shouldn’t be surprised the truest of true believers quickly reached a point where green symbolism trumps economic relief.

When the Trump administration finalized its long-anticipated plan to not proceed with the extreme end of Obama-era rules tightening motor vehicle fuel efficiency standards, which would have driven up the cost of buying a car and loaded yet more burdens on the now-struggling US auto sector, the California government turned purple at the prospect and promised to fight them in court. And the press immediately chimed in to support this response.

NBC gave the usual nuanced interpretation, with a story that blared “Trump rollback of mileage standards guts climate change push/ ‘Given the catastrophe they’re in with the coronavirus, they’re pursuing a policy that’s going to hurt public health and kill people,’ one expert said.” Ah yes. Experts say.

Now before you reply that these rules would actually save people money by forcing them to drive more fuel-efficient vehicles, remember that you and everyone else can choose a smaller car any time. If you value fuel efficiency above, say, comfort, performance and safety, you can get as tiny a car as you want. You don’t need the government to force you. When they argue that you’ll personally be better off with a more efficient car, they’re just saying they can run your life better than you can. But of course the main argument is collective.

The LA Times thundered that “Environmentalists and public health advocates said the change would likely contribute to thousands of premature deaths and asthma attacks… that the rollback would damage public health at a time when thousands of people are gravely ill and the nation’s economy is in tatters.” It apparently did not occur to the Times that with a pandemic and an economy in tatters, costly new regulations would also have a major impact on people’s health.

Europe is also confronting the question of further burdening the economy during a pandemic. And the press says do it. Reuters reported that “The EU executive kick-started its plan to set a tougher 2030 emissions target on Tuesday, a move that could help maintain the bloc’s focus on climate change despite pressure to soften its green ambitions in response to the coronavirus pandemic.” But what the EU really did was begin “a public consultation to gather views until June 23 on its options to tighten the EU’s 2030 target to a 50% or 55% cut in greenhouse gas emissions from 1990 levels, from the current 40%.” It will be most interesting to see what ordinary Europeans desperate for a revival of wealth-creating activity have to say, and whether the Eurocrats will want to hear it.

Meanwhile European car-makers are begging for mercy; a coalition of car and tyre makers wrote a pleading letter to EU Commission President Ursula von der Leyen pointing out that they’re in no position to develop or produce more efficient engines (the EU is evidently aiming for average fuel economy of 92 miles/US gallon by 2030) because they’re all closed due to the virus. As corporations far too often do, they surrendered first and then fought, saying “Please be assured, however, that it is not our intention to question the laws as such nor the underlying objectives of road safety, climate change mitigation and protection of the environment.” The EU Commission coldly acknowledged receipt of the letter and went on sharpening its axe.

2 comments on “Death and taxes”

  1. Here's how it works out for the average working schlub: If you save $5 per fill-up, and you fill up once a week, you save $260 per year. Or $2,600 over the average life of the car. But you spend $2,600 more for the fuel-efficient technology up-front. No savings, really - you just have to spend more to finance it.

  2. Ah, the EU! Here in the UK we are leaving it, but that doesn't mean that we are going to escape from anti-climate change policies. It's even worse here. They want us 'carbon neutral' by 2040 & in the next decade from now they are going to ban all fossil fuel using cars AND hybrids. New homes will not be fitted with gas central heating. A lot can happen in a decade however, & it remains to be seen if it will really happen.
    As for California, thanks to its liberal & environmental policies it has fallen from the fifth largest economy in the world to tenth. According to Rupert Darwall, California has 12% of the US population & 33% of its welfare claimants. Goodbye California.

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