Horwath’s delicate tax dance

NDP Leader Andrea Horwath fought the last provincial election on a prayer and a promise.

She got her wish — winning the balance of power when the Liberals fell short of a majority. Now she’s trying to keep her promise to voters — by making minority government work.

But in politics as in life, be careful what you wish for. Horwath’s ambition to wield influence over the government now puts her on the spot — more than any New Democrat for decades.

This week, with veiled threats of fresh elections, she is unveiling her demands to win NDP support for the Liberal budget. Her most ambitious idea is also a good one: A supertax on the super-rich. But threatening to trigger another campaign, six months after the last one, is like playing with a loaded gun. You don’t want it set off by accident.

“Being in this position isn’t easy, and it’s a time for me to be very thoughtful and very circumspect about what we’re doing,” Horwath mused in her office Wednesday. “There is a bit of a line that I have to walk.”

Horwath deserves a shout-out for doggedly putting taxes back on the agenda. Ahead of the budget, she pressured the Liberals to freeze their planned reduction in corporate taxes. Now she wants to raise taxes on any personal income above $500,000. Getting the Liberals to agree won’t be easy. In last fall’s election, Premier Dalton Mcguinty declared he wouldn’t raise any taxes — a promise he has been repeating, unwisely, in virtually every speech since.

In a minority government, a premier needs to maximize his margin of manoeuvre, not paint himself into a corner. Now the NDP may force him to change his colours.

I’ve written before that taxing the super-rich is good, progressive public policy. It’s also good economics, redistributing money where it’s most needed. And it’s good politics, reflected by strong public support in recent polls.

It is powerful symbolism — reassuring all Ontarians that everyone is chipping in. And it yields a substantial sum of money:

Currently, the top marginal rate is 11.16 per cent; the NDP estimates a new top rate of 13.16 per cent would raise $570 million in new revenue (after surtaxes). The finance department’s estimate is $440 million — still a handsome sum.

Horwath is doing Mcguinty a favour by dragging him, kicking and screaming, into doing the right thing. The premier can always say the NDP devil made him do it.

The challenge, however, is to use the money wisely. And this is where I part company with the New Democrats, who would spend most of it recycling their tired idea of removing the HST from home heating oil.

Far better to unfreeze welfare rates at a cost of $51 million — surely a progressive cause that both the Liberals and NDP should be speaking up for. So far, the NDP has only talked of raising disability payments at a cost of $40 million, and boosting child care. Their shopping list is sure to grow, but here’s an idea: why not use some of the money to pay down the debt?

Within weeks, New Democrats will have to choose. For an opposition party that usually opposes, it is a new role — one it is growing into.

“With more responsibility in minority government, you have more pressure,” Horwath acknowledged. “And to be frank, I think that’s a positive thing.”