The art of the possible

Following up on this post, Stephen Gordon replies to Robert as to his take on expanding the reach of consumption taxes:

So Stephen, are you in favour of charging the HST on groceries and then giving low income households money for that?
Posted by: Robert McClelland | October 04, 2010 at 08:01 PM

Yes. But that battle was lost long ago.
Posted by: Stephen Gordon | October 04, 2010 at 08:17 PM

Which is pretty much the answer I'd expected - and certainly makes for a consistent view of how a tax system should be set up in theory.

But then we get to the practical side of the issue. And while one can understand Gordon's reason for frustration with the system as it stands, surely one also has to recognize that any policy is going to be discussed within something resembling our existing political reality. Which seems rather important when the NDP or any other party develops a policy proposal.

At another time, with another government, Gordon's "just give money to poor people" answer to redistributive issues might well make for the foundation of a better theoretical policy than one which involves cutting consumption taxes for all. (Though I'll post later as to why the economic theory behind that principle has inherent political weaknesses.)

But last I checked, the Harper Cons' answer to any suggestion about helping poor people ranged from hysterical laughter to the unprintable.

So the NDP's choice is then between tilting at windmills and proposing something which it knows will be shot down in short order, or making a suggestion that's at least close enough to the governing party's worldview to have some chance of being taken seriously. And if the measure catches on enough to push the Cons to act, then the result is the implementation of a policy which has some positive redistributive effects in percentage-of-income terms (even if it does fall short of the mark in absolute terms).

Again, that can reasonably be seen as less than an ideal outcome - and I'll be the first to agree that the NDP also needs to have its longer-term societal goals in mind, even if I may not agree entirely with Gordon as to what those should be. But there's some middle ground between a political party which is focused only on communication strategies at the expense of policy and one focused solely on theoretical outcomes which fail utterly to connect with politics as they stand - and I wouldn't want the NDP to trap itself in the latter extreme any more than the former.