Tax cuts

Paul Martin responded to Harper's pledge of cutting the GST by two percentage points (to 5 per cent) by saying that it's better to cut income taxes. I agree, of course, that income tax cuts are better than consumption tax cuts. Income taxes have the stench of slavery about them, and you can take a peek at Nozick's Anarchy, State & Utopia for a clever argument on why that is so.

Nevertheless, what Martin said struck me as being funny. He said: "I want to see Canadians keep more of their pay cheques."

Great. But to do what with, exactly?

I like both ideas. We should cut the GST, and abolish the income tax. I suppose that idea is out, though, unless we take seriously the Fair Tax proposal pushed by Neal Boortz in the U.S. I think I like this idea most of all. In general, the idea is to raise consumption taxes to about 23 per cent, and abolish the income tax, property tax, capital gains tax, corporate tax, and so on. Yup, that would mean taking the IRS apart. Which would be sweet.

I'd like to see a proposal like that in Canada. But I'm not holding my breath.