I've been ranting on Twitter about a lack of serious policy proposals in this election. In an effort to be constructive rather than destructive, here are eight policy proposals I'd like to see. I'm posting this on Moff-thoughts rather than WCI since I'm not posting any research suggesting why these are good ideas (in other words, I'm lazy). Each one of the eight, though, would make for a good WCI or economy lab post.
Here are my 8:
- A realistic plan to tackle the deficit. The easiest and least economically damaging would be an increase to the GST, but I'm open to alternatives. See Ottawa's GST cut a mistake by Stephen Gordon.
- Some form of carbon tax or cap-and-trade with auctionable permits. Anything would be better than Peter Kent's Kremlin-like approach to emissions which involve a Byzantine set of regulations. The plan should include details: what would fall under the tax, where would the money go, how do you deal with the provinces? Alberta would pay a disproportionate amount of carbon taxes, so this should be addressed. Thought: Alberta also pays a disproportionate amount of federal corporate income taxes. Using carbon taxes to cut corporate income taxes should mitigate (but not eliminate) the 'Alberta problem'.
- Legalize and tax marijuana. I discuss the issue in some detail here. The federal government could raise 1-2 billion a year at have greater control over consumption than they do now.
- Some form of negative income tax/guaranteed minimum income/citizen's dividend. The least expensive and most effective way of reducing poverty. Our existing GST rebate system is a very weak form of guaranteed minimum income - this could easily be expanded (and should be, if we're raising the GST). A wealthy country like Canada can afford to do more for those most in need.
- Elimination of boutique tax credits and income tax simplification. They're regressive, theycomplicate the tax code and they're inefficient. Let's eliminate all of them and use the money to finance a general cut in income taxes (and the negative income tax from point 4). Too much time and money is spent in filling out tax forms and looking to exploit loopholes rather than engaging in productive activity. In the 1950s an income tax form was only 4 pages. There's no reason we cannot go back to that. Ideally a tax form could be a single sheet of paper, front and back.
- Eliminate supply management and other expensive barriers to trade. I discuss the issue at some length here. They're expensive, they distort markets and they hamper our ability to sign into free trade agreements. They need to go.
- Raise the basic exemption on employer-side EI contributions. A very inexpensive way to increase jobs for low-income Canadians. See William Scarth's A Job-Creation Strategy for Governments with No Money [PDF]
- Foreign investment reform/reform of the "net benefit" test. For the reasons Andrew Coyne describes in Where’s the harm in selling potash? Our investment laws are nebulous, which makes investing in Canada far riskier than it should be. It's time to formalize the rules.
There are my eight. There are some very major issues I haven't addressed, largest of which is how to deal with an aging population/demographic shift. But this should at least get us started.

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