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GP_Matt · 03-21-2012, 04:48 PM

I get the impression that you are in favour of a modest tax increase coupled with saving or redirecting the resource revenue.

I have a few problems with the idea, although not any that couldn't be solved but I would like to see them solved first.
Starting with the savings plan: Politicians love to spend money so I fear that they will raise taxes and put a portion of the money aside for a rainy day but the amount that they will put away will shrink on a yearly basis because they had to give the nurses more this year and they need a bunch of hospitals the next year and we really want a legacy museum the following year. The end result will be higher taxes and not much to show for it. The other concern is what are we saving for? Is it long term for a post carbon economy or is it short term to stabilize government revenue when prices are low? If it is short term then I would worry that it will be used to prolong high spending and we will quickly notice that it is raining every year thereby defeating the point. If it is long term then I wonder what we do with the money when oil runs out. Do we use it to fund massive make work projects to keep the population artificially employed until the money runs out or pick and chose which industries the government will then encourage to come to Alberta to replace the lost jobs. Both of those ideas have quite a few flaws in them. Alternatively we can use the money to shore up government revenues well into the future to avoid having to raise taxes at the same time that everyone is running out of work. But that sounds like pre-paying taxes now so that our kids won't pay as much in the future.
The other fear with Alberta banking huge sums of money for the future is that an eastern based party will be elected during a recession that will pass the Provincial Sovereign Wealth Fund Expropriation Act. It won't be targeted directly at us but the result will be the same, the fund will be expropriated either directly or through a lack of transfer payments and used for whatever the federal party deems important.
Looking at the other option that could result from increased taxes is redirecting the resource revenue towards encouraging other industries in Alberta. It sounds like a good idea but would result in either direct handouts to specific industries or targeted tax cuts for specific industries. I think that may have some merit but don't generally like it when the government decides which industries should be encouraged and which shouldn't and would prefer to see them encourage all industry through a reduction in corporate taxes. I like that plan, but I am pretty sure that you aren't advocating for the government to increase personal taxes so that they can lower corporate taxes.

03-21-2012, 04:48 PM	#671
GP_Matt First Line Centre Join Date: Jun 2011 Location: Edmonton Exp:	I get the impression that you are in favour of a modest tax increase coupled with saving or redirecting the resource revenue. I have a few problems with the idea, although not any that couldn't be solved but I would like to see them solved first. Starting with the savings plan: Politicians love to spend money so I fear that they will raise taxes and put a portion of the money aside for a rainy day but the amount that they will put away will shrink on a yearly basis because they had to give the nurses more this year and they need a bunch of hospitals the next year and we really want a legacy museum the following year. The end result will be higher taxes and not much to show for it. The other concern is what are we saving for? Is it long term for a post carbon economy or is it short term to stabilize government revenue when prices are low? If it is short term then I would worry that it will be used to prolong high spending and we will quickly notice that it is raining every year thereby defeating the point. If it is long term then I wonder what we do with the money when oil runs out. Do we use it to fund massive make work projects to keep the population artificially employed until the money runs out or pick and chose which industries the government will then encourage to come to Alberta to replace the lost jobs. Both of those ideas have quite a few flaws in them. Alternatively we can use the money to shore up government revenues well into the future to avoid having to raise taxes at the same time that everyone is running out of work. But that sounds like pre-paying taxes now so that our kids won't pay as much in the future. The other fear with Alberta banking huge sums of money for the future is that an eastern based party will be elected during a recession that will pass the Provincial Sovereign Wealth Fund Expropriation Act. It won't be targeted directly at us but the result will be the same, the fund will be expropriated either directly or through a lack of transfer payments and used for whatever the federal party deems important. Looking at the other option that could result from increased taxes is redirecting the resource revenue towards encouraging other industries in Alberta. It sounds like a good idea but would result in either direct handouts to specific industries or targeted tax cuts for specific industries. I think that may have some merit but don't generally like it when the government decides which industries should be encouraged and which shouldn't and would prefer to see them encourage all industry through a reduction in corporate taxes. I like that plan, but I am pretty sure that you aren't advocating for the government to increase personal taxes so that they can lower corporate taxes.