This is a bad plan. If they want to raise income taxes, just raise income taxes. If progressive makes sense, and it probably does, then do that. An alternative plan which I think is more economically sound is to cancel income taxes altogether, and introduce a 15% provincial portion of HST, for a total sales tax of 20%. This would raise revenues, while providing a bigger incentive to save rather than spend. Also, it would reduce or keep costs the same for those with low middle income. That is because those at very low income buy mostly exempt or zero rated goods (groceries, rent, utilities, transit passes) and the small non exempt purchases would be covered by the larger HST rebate. Middle income types still spend significant portions of income on exempt/zero rated goods (same as above but maybe mortgage/insurance instead of rent), so 15% on a portion is likely to be less than 10% on the majority of income. It's the upper income types who would pay the incremental taxes on SUVs, lattes, and newbuild McMansions where the increase would come from.
A 15% sales tax would be sufficient. In 2011 (latest data I could find) $4.1 billion of GST was collected in Alberta. (1) The province is bigger now, so its probably gone up, but you'd lose some shoppers in Lloydminister and things like that. Figure 15% gives you a $12.3 billion revenue increase. In the last fiscal update,(2) the AB gov't forecast $11.0 billion in personal income tax. So this would raise revenue slightly in the long term. An additional benefit is AB would get billions in cash right now from the Feds for implementing an HST instead of a PST, which we could use to ride out the current downturn and invest infrastructure/new schools while construction prices are low.
(1)
http://www.cra-arc.gc.ca/gncy/stts/g...able02-eng.pdf
(2)
http://finance.alberta.ca/publicatio...cal-Update.pdf
Edited to add: If this didn't raise enough revenue, I'd be ok with an excise tax of a few percent on very high incomes. Something like 3% over some high bar (250k, maybe?).