The passing of time dulls memories, so perhaps it is forgivable to forget that when the Harper Conservatives took office almost a decade ago, they inherited a large surplus.
These self-described flinty-eyed custodians of the public purse, being in a minority parliamentary situation, used up the surplus in three years – or squandered it if you prefer that word.
They increased yearly federal spending well above the inflation rate. They cut taxes, especially the goods and services tax by one point, then another, at a cost to the treasury of a little more than $12-billion. They put some money into debt reduction.
When the severe financial recession hit in 2008-2009, the surplus was gone. Now, in the pre-election budget of April 21, 2015, the same government will brag about a balanced budget and propose that most gimmicky of gimmicks: balanced-budget legislation.
Some day, somehow, some government will repair the wreckage this government has done, and proposes to continue to do, to the Canadian tax system. Do not hold your breath, for the Conservatives have frightened the opposition parties into acquiescing on most of the bad policies because, bad as they might be economically, they are politically popular.
The government of our dreams will start by heeding the advice of economists and restore what is now the HST with offsetting lower income taxes, on the theory that those lower taxes encourage savings and investments whereas lower consumption taxes encourage spending.
Then that government will eliminate all the itsy-bitsy, targeted tax credits and breaks aimed at this or that political group. These distort tax policy and should be replaced with across-the-board reductions.
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