TheStar.com - PM hurt by McGuinty tax hike: Poll

TheStar.com - PM hurt by McGuinty tax hike: Poll

The assumption from this poll is that the implementation of Health premiums, maybe that should be levies or, better still, taxes, are the real cause of the Liberal's slide in the national polls.

From my perspective there are two possible reasons that could be true.

1. The unique structure of the health tax. The lowest income earners, $20,000/year, will have to pay 1.5% of their income. Like most taxes, this one is also a sliding tax. However, what makes it truly unique is that, as income rises, the percentage decreases. The person who earns $200,000 only pays a 0.45% tax rate for health care.

In one sense I am not against a health premium as a means of educating the public that Health care is not free. However, the goal this time was just to raise cold hard cash. The obvious problem is that premiums must be related, at a minimum, to the coverage provided; i.e. The same for everyone. Apparently for the Ontario Liberals, who have an underlying belief that services provided and income redistribution are forever linked, a premium was unacceptable.

Hence McGuinty & Co. had to implement a tax, which could tie the amount you earn to the size of "premium" you will pay. Surely the answer should have been to set at least a flat tax rate based on income. I, for one, wonder if they had picked a flat rate of 0.5% and applied that to whatever income was earned beyond the $20,000 minimum, how much would have been raised. Regardless of what percentage was picked to raise the amount specified, the lowest income earners would have paid less.

The only reason to implement a downward sliding tax rate as income rises combined with a maximum tax of $900 would seem to be to curry favour with the higher income earners.

2. Fear of the Martin promise. Martin's problem is that he was short on specifics; where did the $9 billion suddenly appear from and/or how was it to be raised. Those in Ontario, the key province to Martin's success, had just been bitten by a similar promise which, in the end, saw the implementation of the previously mentioned health tax.

Generally speaking, specifics seem to strike fear in the minds of politicians because they limit their ability to manoeuvre or change their mind. The secret to political speak normally is to sound specific while leaving gaping holes to escape through in the future.

From my perspective, the drop in the polls is indicate of an electorate that is in no mood for political speak.