04 January 2017

Taxing our understanding #nlpoli

Over the past week, there's been a flurry of comment about gasoline prices and the fact that, as of New Year's Day, a  provincial sales tax now applies to books.  It's 10%, on top of the federal sales tax of five per cent.

All sorts of people are talking about these two things as if they are the most important things in the world and the most horrible things in the world.

Let's look at the book tax.

As a matter of principle, there's no reason to exempt books from tax. People make a connection to literacy but the illiteracy rate in this province has remained embarrassingly high all the while books were free of a provincial tax. Claiming that this new tax will "crack the spine of literacy", as author Lisa Moore did last spring, is Trumpian in its disregard for facts or logic.

The writers and book publishers oppose the tax because it has the potential to reduce their income.  "It’s bad for the industry, and it’s certainly bad for writers," novelist Paul Rowe told reporters last April, "because your first royalty cheque is probably going to be your biggest one, with your initial sales. With a tax like this, maybe people might want to buy two copies of the book and they’ll only buy one, or maybe they won’t buy any."  The tax is bad, in other words, because Rowe might make less money.  That would at least have been an honest argument, and therefore one that someone could respect, had anyone stuck with it.

Sadly, they didn't.

Instead what we have had lately is a bunch of screaming about a tax that is out of proportion to its actual impact on book prices and book purchases.  If you have a discount card from a book retailer or purchase your books online - where prices are way cheaper anyway - you really won't be seeing much impact from the book tax.

And that - inevitably - leads to the observation that the tax will have a negligible impact on government revenues. Against a deficit of more than $3.4 billion in the spring budget, the book tax would only bring in something like $2.1 million. There's the best argument of all against the tax.  It won't do anything meaningful and positive. Simple and neat.

Wonder all you want as to why the government put the tax in place in the first place given it does shag-all to affect government's financial mess.  The fact is they have done just like they have done other stunned things.

It's far more interesting to wonder why folks are bent out of all shape about a tax that has a negligible impact either on government finances or on them, personally.

There's no answer for that one.  Go ahead and try to get a reason by just asking some of the gripers on Twitter what it is about this book tax that gets them agitated.  The answers you get are really bizarre since they all seem to know the actual impact of the tax - in every respect - is the equivalent of one pixel in a three billion pixel image.

There's no doubt, though, that the book tax griping isn't about the book tax.  It is a proxy, a stand-in, a cut-out for some other issue.

One of the most common things that comes up in a discussion of the budget and taxes is the idea that the government has been only taking from people.  "They" have to give something as well.  What sort of things?  Well, fewer civil servants,  cut to pensions,  political salaries and the like. The world is "us" and "them".

This is a very interesting idea on a bunch of levels.  On one of them, you can tie it back to the disconnection between people in the province generally and the government that has been around for a very long time. On another, it's related to the idea of patronage. People see themselves as the subjects of the government:  government does things and we folks must just go along. Our opinion doesn't matter. "They" are just going to do that anyway.

Incidentally, in one conversation on Twitter a fellow griping about the book tax  said that he hadn't complained about Muskrat Falls because his complaints had no impact.  He didn't reconcile the contradiction given that the book tax was also done regardless of objection.

People who think this way don't seem to believe they have a right to expect government to deliver services to them regardless of political stripe or regardless of how they voted.  They also don't accept the idea that they are responsible for anything related to government.  When things are good and government is delivering them all sorts of benefits, they gladly accept them but when times are tough, these same folks see no connection to their role in society and any responsibility.

This isn't a partisan thing, either, even if some of the gripers are activists for one of the parties that isn't in power at the moment.  People in Newfoundland and Labrador shift their support from one party to another based on anything but a party ideology.  They used to love the Conservatives.  Then they turned on the Tories, largely because the Tories started talking about cuts to spending and increases in taxes.

Voters turned to the Liberals who, as much as anything else, promised to keep on the general track but to do things better.  Voters apparently took that to mean they would go back to the golden times of tax cuts and lots of government spending.  The same voters turned on the Liberals once they started delivering tax increases and service cuts just like the Tories.

In an effort to get the voters back, the Liberals have turned away from their original plan.  In the same way of thinking, the other party leaders said last spring that, had either of them been in power, their party would have done exactly what the Liberals did... except for the unpopular stuff.

The politicians and these sorts of voters are trapped in an endlessly repeating cycle.  The only way to get out of it is to do the very sorts of things that none of the politicians is willing to do.  The pols would actually have to explain things to voters, to engage them in a real conversation, and change the way they are thinking.

And so we are left talking about a tax on books or listening to people gripe about paying an extra 16 cents a litre to drive their $100,000 trucks as if any of that really mattered in a province of 500,000 people staring at a public debt that will hit $30 billion before too much longer.