BC's Carbon Tax Shift
British Columbia rocks my world. With the release of the annual budget today, provincial officials just announced that they will levy a carbon tax to help drive down emissions. Even better, the carbon tax will be a tax shift -- surely the best instance of tax shifting in the Northwest:
Finance Minister Carole Taylor vowed Tuesday that all money collected through the new tax will be returned through a package of tax cuts and credits.
Done correctly, the tax shift will send a clear price signal that discourages emissions, even while it promotes progressive tax policy. And what do you know?
Corporate and personal income tax rates will drop to help make the tax revenue neutral, and lower-income British Columbians will receive an annual climate action credit of $100 per adult and $30 per child.
In fairness, without futher details, we can't know for sure whether the tax shift will adequately address questions of climate fairness. Still, it's an awfully promising start.
Details of the plan:
Taylor said the new carbon tax will begin July 1, starting at a rate that will have drivers paying about an extra 2.4 cents per litre of gasoline at the pumps. The tax -- which will apply to virtually all fossil fuels, including gasoline, diesel, natural gas, coal, propane and home heating fuel -- will then increase each year after that until 2012, reaching a final price of about 7.2 cents per litre at the pumps. After that, Taylor said, it will rest with the government of the day to decide if the tax rate should change any further.
For non-metric Americans, this means...
