[Flash Walken]

Originally Posted by Slava

I understand what you're getting at, but the fact is that the consumption tax is no more punitive than income tax. Firstly, the overall amount of money collected in taxes from the system as a whole is the same; so the overall money in circulation shouldn't change in either system. I'm not advocating a tax hike here, I'm talking about collecting the same amount of taxes in a different manner. So rather than someone receiving their wage after taxes are withheld, they will receive all of their wage (we'll still have the EI, CPP and other such deductions of course), but everyone would retain more of their income. From there they can make the decision on how and where to spend. I would advocate that areas like food and other necessities are not taxed, so we're really talking about discretionary spending.

Second, and I think that this is critical to note, is that most people are not budgeted so tightly in terms of their spending habits that a consumption tax is going to cause them to buy or not to buy. I mean in all honesty, how many of us have traveled elsewhere and paid these taxes having no idea how much they were and what they applied to? In the US for example some counties have taxes and others don't. I know that when I have been there I basically have no idea, and frankly if I assume that the total should be about $50 if it turns out to be about $55 I'm not entirely shocked. Sure there are exceptions and certain cases where this would have an impact, (large purchases for example), but lets not forget that (a) other provinces and jurisdictions have significantly higher VATs and it works just fine and (b) you will take home 10% more on every pay cheque to begin with.

I actually would put forth the idea that people would spend as much or more with this idea just based on their pay cheque being that much larger to begin with. If you give a family say $10k a year (based on $100k household income and them keeping that 10%), I have a hard time seeing everyone make the decision to just increase their bank account by 10%. Maybe that money gets invested (good for the economy for sure), maybe it gets spent the same way as today, or maybe it gets frittered away on little things here and there over the course of a year. Regardless though, this seems like a net positive for the province and economy as a whole.

I think this is somewhat out of touch with the realities in Alberta.

As of 2012, about 143,200 children in Alberta lived in poverty — about 28,670 more children than in 1989, says the report.

The provincial government promised a poverty reduction strategy last spring, but that’s been delayed until 2015, said Lori Sigurdson of Alberta Association of Social Workers.

Sigurdson recommended Alberta start its own child tax credit similar to the federal one that funnels about $100 a month to families with children.

Children are poor because their moms are poor, as there are more women in low-paying jobs than men, said Sigurdson.

Almost a quarter of Alberta’s workers are paid $16 or less an hour, about two-thirds are women and the majority are over 25.

Income inequality is getting worse in Alberta and at a rate faster than the national average, the report notes.

“After adjusting for inflation, the top one per cent of tax filers saw a 65 per cent increase in their real after-tax incomes compared to only a 5.5 per cent gain for the bottom 99 per cent of tax filers over the period from 1982 to 2011,” says the report.

The richest Albertans have by far benefited the most. The top 0.1 per cent of tax filers saw real incomes rise by 136 per cent, compared to a rise of only 3.4 per cent in the real incomes of the bottom 50 per cent of tax filers, says the report.

The government should return to progressive income tax, Sigurdson said. It could raise $1 billion to fund anti-poverty programs with a modest increase on taxes on the very rich — from the current flat 10-per-cent rate to 13 per cent, she said.

Alberta has the richest rich and the poorest poor in the country; the most unequal populace in the country. Giving tax breaks or excluding things like groceries doesn't address that the province needs to elevate more people out of the category of 'poor' to improve the economy. Instead of eeking out a living, these people need to be buying ipads, vehicles etc., rather than generic Mac and cheese.

any way you slice it, the least impactful method of increasing tax revenue is by doing it on the absolute highest income earners. Taxing business and consumption creates artificial drags on the economy. I am not even suggesting raising income tax on anyone who earns less than 300k a year. It impacts essentially no one in the province, but vastly improves the provincial budget situation.