Taxing isn’t something nice people should be asked to do

British Columbia just did what Californians have been doing for years. Enough of them took up a crazy, irresponsible invitation to vote down an unpopular new tax that they were already paying—a tax vital to the interests of both those who want stronger government and those who want a more vibrant private sector.

Confusing his declining personal popularity with the people’s tolerance for the rules of representative government, former BC premier Gordon Campbell agreed that a simple majority of those voting in the pending referendum could vote down the Harmonized Sales Tax (HST). And just over half of the half of the voters that bothered to vote did exactly that.

In North America, even pure blind trouble-makers like to imagine they’re doing some good. So, the defeat of the 12% HST is claimed as a victory for direct democracy. This is an illusion. Making government for the people next to impossible only makes the people less powerful.

The game (designing taxes on a ballot) and the rules (treating less than thirty percent of eligible voters—and law-abiding taxpayers—as the voice of the people) have no merit. There isn’t a significant government on this continent that has won an absolute majority in a general election for a hundred years.  Taxes have been raised, wars fought, and life enhanced and lengthened for individuals by sticking with the rules of constitutional representative government. 

Commentators have suggested the outcome of the BC referendum was influenced by exceptional public anger. Gary Mason wrote in the Globe and Mail:

“Whether this victory for direct democracy emboldens voters across the country remains to be seen. We have certainly seen Canadians vent their anger and frustration at the ballot box before – the rise of the NDP and the annihilation of the Liberals in the last federal election is a good example of it. The Reform Party was a creation of protest politics. But the political culture in B.C. has always had a different personality and harder edge.

“British Columbia is also a community that, by and large, is bound by populist impulses that reject expert opinion,” Mr. Mitchell says. “That is a key element of the frontier politics that still, by and large, prevail in British Columbia.”

Click on: www.theglobeandmail.com/news/national/british-columbia/gary_mason/hst-defeat-brings-back-harder-edge-of-bcs-protest-politics/article2144389/

Ontario Finance Minister Dwight Duncan said he didn’t expect the HST’s rejection in B.C. would hurt his party, noting: “I believe Ontarians have accepted our tax plan.”

Click on: www.theglobeandmail.com/news/national/british-columbia/bc-politics/hst-could-become-political-lightning-rod-in-ontario/article2143576/

Inviting individuals to tailor their own taxes would not work anywhere. It’s condescending and dangerous for eastern Canadians to question the maturity of Californians or British Columbians. Both jurisdictions have been economic and democratic workhorses for both confederations.

Dwight Duncan is wise, as well as reflexively self-serving, to guess that Ontarians accept what he’s done—and leave it at that.

You can lose when you're doing something important

One conspicuous symptom of our miserable times is the number of politicians leaving careers in defeat or being written off well before their next election. Most noted has been the defeat of some 54 incumbents in the November US congressional elections.

But political exile is common elsewhere. In Canada, Gordon Campbell, the Premier of British Columbia, was effectively chased out of office for expanding the tax base. Nationally, Stephane Dion, the Liberal Party’s former leader, summarily lost his job after unsuccessfully advocating a carbon tax to fight climate change.  Today, in London, Nick Clegg, leader of the Liberal Democratic Party has, in one season, gone from being Britain’s most liked politician to “Nick Clegg, Dick Head!”

A great deal of human capital has been forcefully withdrawn from public service and many good people are finding themselves with fewer friends.

Today, with so many really smart people, with high incomes, dependent on the favourable opinions of voters, defeat causes many to shudder like seeing a bat at dusk. Increasingly, consultants treat defeat as a medical illness; insisting that with the proper application of market intelligence and personal discipline other politicians can avoid the same fate.

However, political defeat is not a medical condition or a freakish occurrence. It is a good politician’s unshakable companion. Competent representative democracy could not carry on without it.

We know stories about Presidents and Prime Ministers who stood by their convictions. However, an equally relevant and inspiring book on the subject of political courage was written by an American historian about Winston Churchill’s followers in the House of Commons in the 1930s. Lynne Olsen, in “Troublesome Young Men,” tells the story of the handful of back-benchers who defied Chamberlain’s policy of appeasement, risking their careers and social standing against a massive majority in Parliament and in the country. What is striking about these mavericks was their youth, savvy and ambition. Individually, most all of them rightfully aimed for high political office. (Two, in fact, eventually became Prime Ministers.) Despite their personal ambitions, they stood against the professionals and with Winston Churchill, a loner, a has-been, a bore to many, who appeared to lack the humility and discipline to tack or make new friends.

The contemporary political victims noted earlier are not amateurish or arrogantly disdainful of the preferences of their constituents either. By and large, they are hard working representatives, not especially disputatious or headstrong. Their unpopularity was born in conscious efforts to tackle important challenges, to serve an urgent public interest.

Furthermore, they see themselves as moderates and pragmatic; their positions were unpopular even though they were often compromises as well.  Nevertheless, on climate change, fiscal stability and universal healthcare, these modern politicians recognized that a viable response to the problem at hand required their support, whether that response was popular yet or not.

If there is anything inspiring about 2010 to take into a bracing New Year it is not the public’s ability to rage, but the continuing ability of a goodly number of politicians to pay for their principles.

Brad Wall and “strategic” conservatism

Nobody lost an election in Canada this week. But, as in the US, change is afoot.

Stephen Harper lost his most competent minister, Jim Prentice, and his most trustworthy political ally, British Columbia’s Liberal Premier Gordon Campbell. And most importantly, he was publicly out-talked, out-campaigned, and successfully cornered by a rising political star in his own political base and partisan home—Premier Brad Wall of Saskatchewan.

Looking at the bald facts of the issue—should the Government of Canada reject a $40 some billion hostile bid for Potash Corp of Saskatchewan—you’d imagine that everyone would carefully play their fated roles. (Most people in Saskatchewan didn’t like the idea; Premier Wall would have to oppose it, and Harper also needs Saskatchewan to stay solidly Conservative in his next election.) However, Premier Wall doesn’t seem to play “damage control.” Using all means available to him (provincial alliance-building, speech-making, media interviews, and public lobbying in Ottawa), he set out to redefine how we treat foreign investment. He cut off efforts to sweeten the bid and forced Harper to mutely do what his logic and his principles could not embrace.

The impact of Wall’s short, dazzling campaign brings to light important public policy and political issues.

Brad Wall isn’t bilingual but he uses the English language wonderfully. And seemingly, he has the ambition to take a national leadership role in setting national conservative economic policy. With or without silk ties, Thomas Friedman’s one-liners, or conscious intent, he’s pushing conservatism back to a more interventionist approach. This is well within the political traditions of western Canada. As events this week reveal, Harper’s more rigid laissez-faire approach is extremely vulnerable to populist challenge.

Of course, for now, Wall may have put more wind in the sails of Michael Ignatieff than his own brand in the Conservative Party. Nevertheless, what Canada’s cosmopolitan business leaders thought was a national consensus on foreign investment has turned out to be not much more than an agreement to talk about other things, for now.

It’s refreshing to see a politician enjoying a honeymoon with the national press. However, the attacks on BHP Billiton’s bid by Wall and his allies received precious little effective scrutiny. For instance, on October 26^th, Wall volunteered in a letter to the Financial Post that “if forced into this merger, we will use our resource-taxing authority to recoup losses that occur.”

Then, what power over the people’s resource was in jeopardy? Wouldn’t the new shareholders want to maximize the value of this resource?  What is “strategic” anyway about rocks that the people own and can’t physically be smuggled out of the province without being taxed? If rocks are “strategic,” then why not finite reserves of conventional natural gas and oil? Since people are our most precious and mobile resource, should we raise the bar on foreign takeovers across the high-tech sector?

It is ironic that Wall captured the support of the other western Canadian premiers, except Gordon Campbell. For forty years, western leaders argued that the West’s development and diversification demanded both clear provincial ownership of resources and free trade in capital, as well as people. They won both arguments and the West has led Canada’s development since.