Economics is a difficult and technical subject, but nobody will believe it – John Maynard Keynes.
The question that B.C. voters faced in the recent referendum -- whether or not to abandon the HST and return to the PST -- is one that is the subject of countless lectures and studies. The overwhelming consensus of opinion that has emerged from this intellectual investment is that valued-added taxes such as the GST/HST are far superior to retail sales taxes -- but this is not the view that prevailed in British Columbia.
This is obviously not the first example of voters rejecting the best advice of economists -- think of the fate of the carbon tax. Indeed, it’s hard to think of a policy issue where the best advice of economists played an influential role in forming public opinion. (The 1988 free-trade election was won on mercantilist themes of increasing exports, not on economists’ arguments based on the benefits of cheaper imports.)
For an economics professor who has spent much of the past six years trying to bridge the wide -- and apparently broadening -- gap between what is known to economists and the talking points that are the stuff of politics, the B.C. HST referendum is an unsurprising disappointment.
It is unsurprising, because economics’ collection of challenging and often counter-intuitive ideas has been and probably always will be difficult to communicate to the general public. But it’s still disappointing: as long as this state of affairs persists, economic policy debates will continue to take place without the meaningful participation of much of the citizenry.
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