[Dion]

Why increasing Alberta’s taxes is such a dumb idea

The need for new schools and hospitals could more easily be serviced if the province was prudent on program spending (and thus created room for capital expenses).

For example, program expenditures are the largest portion of the provincial budget. In the 2011-12 fiscal year, the province spent $45.1 billion (program, capital and interest payments combined). Of that, one per cent was spent on debt interest, with 13 per cent for capital expenditures; fully 86 per cent went to programs.

More capital spending could be afforded with current tax levels if the government didn’t continually overspend on the operating side of things.

To illustrate, imagine, if over the past five years, the province awarded inflation-only raises to teachers instead of raises that were double the rate of inflation. Or on the corporate side, imagine if the government choose not to subsidize carbon capture to the tune of $682 million between 2011 and 2015. Money would have been freed up for infrastructure.

But such moderation has not been a hallmark of Alberta’s government for some time. After accounting for inflation and population growth, per capita program spending rose to $10,526 in this current budget year. That’s up almost 10 per cent from 2005 levels ($9,594 per person).

Those who seek higher and new taxes might recall this basic truth about human beings: People do not naturally flock to a place where the temperature can plunge to -30 C, or where it can snow in June. People come to Alberta, historically, because it provides opportunities.

If Alberta’s overall tax burden shifts to the level of British Columbia or Ontario (where four seasons exist), the province might find itself in a nasty pickle: Less economic activity and less revenue than expected, but higher taxes — and an irritated population.

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http://www.calgaryherald.com/opinion...933/story.html