Ignatieff lags while Harper clears corporate-tax-cut hurdles

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There's much debate these days about whether Conservatives and Liberals are brilliant or out of their minds to propose or oppose corporate tax cuts, aka tax relief for job creators. Here's my take, having probed opinion on this idea going back to the Mulroney-Wilson era.

Critics of polling are correct when they argue that how a question describes an idea can greatly affect the results, although it's not really a problem with polling in my view. I often test reactions to an idea using different descriptions: It simply helps explore how best to communicate something that is complex or controversial.

Cutting corporate taxes is a perfect example of the kind of idea that will produce a different response depending on the words used to describe it. It's also true that if you ask people about an idea in isolation, versus pitting it against another choice, results will seem different. It's plausible to think that government should provide good health care and also encourage more business investment, but if people are forced to choose, pretty hard not to pick health care.

All of which is to say we need to consume polling information on a question like this with a discerning eye, looking carefully at the context provided to the respondent and the wording used to describe the idea.

The larger point I would offer though, has to do with the fact that 70 per cent of Canadian voters are pragmatists. They happily describe themselves as living on the centre of the spectrum. About 15 per cent will always support any kind of tax cut, and a similar number will pretty well oppose anything that looks like it is designed to help business. The Conservatives own the first 15 per cent and have no shot with the second group.

For most battleground voters, though, how they react to an idea has less to do with rigid philosophy and instead turns on three things.

First, is the question of the perceived motive behind the proposal. If voters were to decide that the Harper government was trying to line the pockets of fellow Conservatives on Bay Street, they would turn against the idea, no question. But, if they instead see it as part of a general belief on the part of the Harper government that lower taxes produces a stronger economy, they will be more open minded. Even if they don't fully embrace the ideology, they may respect that the idea comes from place of good intentions.

Second, is the question of effect. For many years, mainstream voters opposed cutting business taxes because they understood this would require a painful choice somewhere else: higher deficits and debt, higher taxes on consumers, or spending cuts to programs they value.

In today's fiscal environment, voters may not believe that they will need to endure pain somewhere else to pay for tax cuts. For better or for worse (and certainly somewhat ironically) the Harper Conservatives seem to have successfully conditioned a lot of voters that more spending, less cutting and higher deficits needn't worry us: After all everyone is doing it and it will be over before long.

Third, context is also important. In the 1970s and 1980s Canada's economic choices were often debated as good for business and bad for labour or vice versa. Today, that line of thinking is almost never heard.

As a country, we are now more inclined to the view that private sector investment is critical to individual economic well-being, and that public policy should help spur investment, not serve as an alternative or a counterweight to it.

All of the above is to say that the fight about corporate taxes is an interesting test of the communications skills of today's protagonists. This fight is not about the fringes of the spectrum, but the mass of voters in the middle.

Stephen Harper is championing an idea that has never been all that popular, but my guess is he will largely pass the "what's his motive" test, that people won't worry so much about the fiscal effects (there's not much evidence that this has hurt the Conservatives so far, or that the Ignatieff Liberals are seen as fiscal hawks) and that context is probably better now than at any time in recent history to make his case. That doesn't mean Harper will win voters over, just that he has a better chance than might appear to be the case on the surface. Ultimately, I don't think it's in the Conservatives' interest to let this issue be too prominent a part of their emerging, "steady as she goes" ballot proposition. I'm not sure they can rally many voters to it, even though it may repel fewer than it would have in the past.

Michael Ignatieff's argument so far is really largely about effect: that corporate tax cutting now as opposed to later is bad because it crowds out other priorities. He isn't really challenging whether lower taxes for business are a good idea in principle, or whether Mr. Harper's idea is born of affection for the wealthy or disinterest in the poor - the kind of arguments popular in days gone by. I'm not at all convinced that Mr. Ignatieff can win an election over this issue, but if he chooses it as his line in the sand, I believe his argument will need to be more trenchant than it is right now.