Harper: Free Trade is a Tax Break for China

Harper was criticized the other day for wanting to increase taxes on various imported consumer goods.

There is no defense for raising taxes ever. This is even more important when Canada will be soon in recession. So what is Harper thinking? He rightly pointed out that the Liberals had voted against budgets in which there were some tiny tax cuts. Okay, sure, the Liberals lack any principled objection to higher taxes. What was his rebuttal to their criticism on the tariff issue?

“What the Liberal Party seems to stand for, Mr. Speaker, is that somehow we should give tax breaks to emerging economies like China.”

OMG, my brain just exploded from the unbelievable stupidity of that statement. I love a good cheap shot at a Canadian political party as much as the next guy, but Harper’s statement is just dumb.

So not taxing imports is a tax break to the countries from which we are buying those imports. So a free trade policy is a tax break for our trading partners.

That is incoherent, protectionist nonsense. First of all, the importer pays the tax, not the exporter. So China is not getting the tax break, per se. It is the one importing Chinese stuff.

But then this is kind of like saying it’s a “tax break” if the government taxes anything less than 100% of your income. The meaning of “tax break” is clearly being twisted. A “tax break” is meant to be a means of reducing a tax liability that already exists. The absence of a tax is not a tax break. Adding new taxes is not the same as taking away tax breaks. The underlying philosophy revealed in Harper’s words is that the government rightfully owns everyone else’s wealth, and letting people keep anything is a tax break. The whole notion is economically utterly perverse.

The case against protectionism is logically irrefutable. Harper, like virtually all politicians, is a mercantilist who thinks protectionism is good (for his friends), meaning he is no ally of capitalism and free trade. He is a classic Canadian crony prime minister.

— Read more at CBC News. —