Ontario deficit to hit $25 billion as tax revenues plunge

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Political Map of Canada

The problem with the left is that they think that the producers will just keep producing in the face of massive tax hikes and government spending. Sorry, but producers curtail their producing when they get to keep less and less of the fruits of their labor. Dalton McGuinty, the Liberal premier of the province of Ontario, is a prime example of this ignorance of incentives.

Consider this story from the National Post. (H/T Joanne from Blue Like You)

Excerpt:

Falling revenues and a burgeoning $24.7-billion deficit will force Ontario’s Liberal government into a new era of fiscal restraint, provincial Finance Minister Dwight Duncan said yesterday.

[…]According to economic figures released yesterday, Ontario is spending $4.8-billion more this year than it predicted just seven months ago. The increased spending includes $4-billion in auto-sector assistance and an additional $650-million to fund the province’s H1N1 response. Program spending has also risen by $812-million.

Tax revenues, meanwhile, are falling dramatically. They now stand at $5.8-billion less than the government predicted in last spring’s budget. Corporate taxes are $2.65-billion — or nearly one-third — lower than projections, while personal income tax is down $2.43-billion, or 10%.

[…]Conservatives, who have watched as the Liberals raised spending by nearly 60% over their first six years in office, were skeptical about the new pledge of austerity.”Dalton McGuinty is hard-wired to increase your taxes and increase spending,” Conservative leader Tim Hudak said. “The reality is, the only way to get spending under control is to change government.”

[…]One analyst said the province’s massive deficit is heightened by the growing size of Ontario’s health-care sector, expected to account for half the budget by 2015.

Earlier this week I blogged about the Federal Conservative Party of Canada, which gained two seats in the 2009 by-elections, bringing them to 145/308 in the House of Commons. They need 155 to have a majority.

States like New York and California are running into the same taxing and spending problems here at home. Even the Democrat Governor of Ohio Ted Strickland is in trouble, and threatening to cancel scheduled tax cuts.

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