There’s a general belief that carbon taxes are regressive, because poor households spend a higher percentage of their income on heating. Statistics Canada says this is only true by a tiny margin, and most poor households are heated by electricity, which produces almost no carbon in BC. Poor people also spend a smaller percentage of their income on transportation because they don’t reduce shelter costs by fleeing to the edge of suburban sprawl like higher-income households do. They do spend more of their money on food, but it’s less likely to be organic vegetables, which fly and drive all over the place.

So a flat carbon tax would be progressive in BC. The BC Liberals have gone one step further by planning to introduce a revenue-neutral carbon tax.* The money generated by taxing fossil fuels will be spent on increasing the negative income tax rate for the poor, lowering the bottom two income tax brackets, and lowering business taxes (which should increase both wages and capital gains). The only part that’s goofy is that they’re planning on giving everyone a one-time payment of $100 to go buy themselves something that will reduce their carbon tax – I guess I could buy a new bicycle?

* In the long term it’s not actually revenue-neutral, it’s revenue-negative, because it’s intended to encourage people to use less fossil fuels, and therefore pay less tax. You could see this as a neo-con trick to strangle the government of oxygen, but given that the budget also includes subsidies to the oil industry I’m going to say it’s even.