Canadians have been visited by the specter of a revenue-neutral tax before - it was called the GST. Just how neutral was the GST Although when introduced, net revenue from the GST was about the same as the tax it replaced, it quickly accelerated and is credited by Brian Mulroney himself as instrumental in slaying the deficit dragon and raising billions for Ottawa. Undaunted, the B.C. government is introducing its own version of a revenue neutral tax, one conjured up by its global warming advisors. It's called a carbon tax. A carbon tax introduced in the UK was also supposed to be revenue neutral. It didn't turn out that way either. Just like the GST, B.C.'s carbon tax will be costly for consumers and could also become yet another big source of revenue for government.

Revenue neutral simply means the government gives with one hand then takes with the other. In the case of the carbon tax in B.C., the government will add a tax to the consumption of fossil fuels, then reduce personal and business income taxes. B.C.'s carbon tax is a consumption tax, just like the GST. If what happened with the GST is any indication, B.C.'s carbon tax will be a classic tax grab painted green.

The B.C. government expects to generate almost $2 billion in carbon tax revenue by 2010. But a report released in Ottawa by Mark Jaccard, the premier's own climate change guru, and David Suzuki shows if the federal government were to impose a carbon tax, it would bring in between $50-$100 billion in revenue each year by 2020. Not bad, considering the GST brings in a mere $30 billion per year.

But Mr. Jaccard writes elsewhere; "Especially important would be the information that the tax is not fattening government coffers."

That is because governments suck in our money and spend it on all kinds of things, like reinstating their gold-plated pensions or enforcing election gag laws. Gullible citizens are supposed to believe that the carbon tax increase will be matched personal income tax cuts and somehow stop global warming. The experience in the UK suggests this is not as easy as it sounds.

The UK's climate change levy - as its carbon tax is called - was supposed to be revenue neutral. It is a tax applied to energy use by industry, business, and the public sector. When it was introduced in 2001, the government cut the employer's rate of the National Insurance contribution by 0.3 percent. (National Insurance is a social security benefit scheme paid into by both employers and employees.) But it didn't last. By 2003 the employer's contribution was increased by 1%. So much for compensating for carbon taxes with the reduction of other taxes.

In the flurry of all this tax talk, people forget what carbon taxes are supposed to do. Carbon taxes are supposed to "do something" about global warming. Again, the experience in the UK shows even that didn't happen. Carbon dioxide, the gas some people believe is leading to catastrophic global warming, increased by 2% in the UK since the climate change levy was introduced. Not only that, global temperatures have cooled so far this century. The last thing B.C. needs is another type of GST with the promise of compensating tax cuts that will be conveniently forgotten when the wheels of the global warming bandwagon fall off.