Sales tax in Alberta?

[Smartcar]

http://www.calgaryherald.com/news/al...141/story.html
Having lived in Quebec and BC, I like having no sales tax in Alberta but I did notice prices are higher here, maybe because of it. Economically, a consumption tax is way better than increased income taxes.

Speaking only for myself, a sales tax would be OK as long as it was a few % of HST and not something that creates yet another provincial bureaucracy.

[edn88]

Prices are not higher because there is no sales tax. If prices are higher, it is because there is more demand.

I lived in BC too, and remember making trips to Alberta to save 7 percent in Grand Prairie - and the prices were not higher.

I agree that I prefer consumption taxes, but take away my income tax first.

[CedarMeter]

I get customers that travel from interior B.C to purchase cedar lumber from my company. And the cedar comes right from their backyard but it's still more expensive. They bring their trailers and they load up, it's very strange that they cannot purchase cedar products for less money In their own province. We get customers from Golden all the time.

[Fozzie_DeBear]

I think that a minor sales tax (say 2%) would be practically unnoticeable and would be very useful if 100% of it was used to grow the Heritage Fund.

Adding the revenue to the operating funds of the Government would be less useful

[You Need a Thneed]

Frankly, I see the amount if infrastructure that is needed, and how fast it gets built with current funding, and if a sales tax would help get some of it built faster, then I'm all for it.

As an example, look at Calgary Transit's 30 year plan that costs $13 billion. It looks great until you realize that in 30 years when that plan is all built (hopefully), Calgary will be a city of 2.5 million instead of 1.2 million. If that plan is all that is built in the next 30 years, we'll be further behind than we are now.

[Kavvy]

Originally Posted by Fozzie_DeBear

I think that a minor sales tax (say 2%) would be practically unnoticeable and would be very useful if 100% of it was used to grow the Heritage Fund.

Adding the revenue to the operating funds of the Government would be less useful

Agree, we need more tax, Alberta is wasting it's economic advantage.

However, the tough sell to the voter would be the slippery slope argument. I think most people think once a 2% tax is introduced, it will slowly slide up to 10% over the years. Even if only used for the heritage fund it will be diverted in hard times.

Extra income for the government is an addiction, just like rebates to the tax payer (see Alaska).

[Chingas]

Has anybody consulted AR_Six?

I agree with edn88. Consumption taxes have many advantages.However if they are a straight addition without justification or other concessions I see them as just another cash grab.

[Senator Clay Davis]

Absolutely no way should any tax go into the Heritage Fund. Taxes should only be used to pay for expenditures in a general budget. Resource revenue above and beyond what is needed should 100% go into the Fund, but saying a tax should go directly into the Fund won't work. If you put tax money into the fund, you're just shifting your revenue burden onto the resource side, and considering we're facing some economic challenges because of over reliance on resource revenue, we really don't need to be repeating the same mistake.

[Slava]

That article illustrates exactly why we'll never have a sales tax in Alberta; that's not how it took place! In fact, Gosbee and Mintz both laid out plans for a consumption tax to take the place of income tax and not to add to what Albertans pay. Mintz was very specific and said we could have a consumption tax of about 8% and have income tax cut at about 4% or increase the exemption in Alberta to about $60k.

In 2000 there was a report written when he (Mintz) was with the CD Howe Institute and the authors suggested the rate could be at 6.25% and virtually replace income taxes altogether. Mintz was specific yesterday though, in that this would be revenue neutral and was a structural change.

Gosbee pointed to Texas having that 6.25% rate and having no income tax and because of this being able to diversify and stabilize its revenue stream. Years ago they were reliant on resource revenue as well (I think he said 23% of their budget) and today they've drastically reduced that reliance.

Anyway, point is that articles like this don't do what took place yesterday any justice. There was a huge amount of information there and I did my best to summarize here if anyone is interested. http://victorlough.com/?p=255

(Hopefully that link works, but if not I'll fix it!)

[GGG]

I would be for a sales tax if the government fixed per capita spending increases at 3% per year. I perfer a sales tax to income tax and would also like 100% of resource revenue to go into a find where only the interest after inflation is spent. This fund after 50 years could eliminate all Alberta taxes

[vtec260]

Before considering sales tax, I would go for increase sin taxes on alcohol(might not be too popular with some CP members), tobacco and a couple of cents on a litre of gas.

[Red]

Originally Posted by vtec260

Before considering sales tax, I would go for increase sin taxes on alcohol(might not be too popular with some CP members), tobacco and a couple of cents on a litre of gas.

Gasoline tax would just increase transportation cost and would effectively trickle down to higher prices on everything. Double whammy if there ever was one.

Higher taxes are just an easy way out for inefficient governments. They get to pay the bills, but nothing is actually getting fixed. Once they run out of the newest tax increase they will invent others. Rinse and repeat.

[Mean Mr. Mustard]

Originally Posted by Red

Gasoline tax would just increase transportation cost and would effectively trickle down to higher prices on everything. Double whammy if there ever was one.

Higher taxes are just an easy way out for inefficient governments. They get to pay the bills, but nothing is actually getting fixed. Once they run out of the newest tax increase they will invent others. Rinse and repeat.

That is an overly simplistic approach though - our government does more with the money. Health care (which accounts for something like 42% of the budget)
costs more... because we are able to do more, there are more people and in particular more elderly people who generally absorb more of the health care dollars. Sometimes things just cost more.

I guess we could go the route of Quietus but the Ocean is a long ways away...

[stampsx2]

Originally Posted by Red

Higher taxes are just an easy way out for inefficient governments. They get to pay the bills, but nothing is actually getting fixed. Once they run out of the newest tax increase they will invent others. Rinse and repeat.

Exactly. It's an easy way out. In a couple years we would be discussing higher taxes again. Find sources of revenue from excess and unnessasary spending.

Alberta has little trouble attracting buisness because we don't have a provincial tax. Ask Manitoba or Bc what happens to migration and buisness when you raise taxes.

[Mean Mr. Mustard]

Originally Posted by stampsx2

Ask Manitoba or Bc what happens to migration and buisness when you raise taxes.

I can't because they are inanimate, you won't get a response. How about we look at research studies regarding the impact of sales taxes on businesses and migration. Seriously, I looked and I couldn't find anything online that indicated that there was a negative impact on businesses.

Alberta had little trouble attracting businesses because there is a boatload (or pipeline full?) of oil up in Northern Alberta and the price of Natural Gas used to be higher.

Also I think you are talking about a cascading tax relative to a VAT (such as the HST)

[Slava]

Again, (and I feel like I'm talking to a wall here) the proposals yesterday weren't about a tax increase. I have no idea how more bluntly that can be said.

Basically you're making a strawman argument here though.

[c.t.ner]

I'm really glad Slava went yesterday and I was able to watch the discussion of the summit online through twitter and not just base what was discussed of articles from the Herald and Sun.

I personally don't think Alberta will get a sales tax until after 2016 and I think this article (like Slava said) is exactly why. Even though a small sales tax or consumption tax won't drastically affect the every day citizen's budgets or erode "Alberta's Advantage", if the PCs add a tax it'll play right into the hands of the Wildrose. So while economically it probably makes sense to explore this option, politically it's the last thing the PCs are going to do as it'll feed the fire of the Wildrose grassroots campaign. Talk of a sales tax is all banking on politics at the moment.

In my opinion the PCs either implement a sales tax and have 3 years of the Wildrose campaign machine saying they lied and broke a promise to albertans, which will enrage the core and probably swing rural areas towards the Wildrose giving them minority or majority status... or no Sales Tax for the next three years and you have a minimization of the oppositions biggest attacking point.

[c.t.ner]

Originally Posted by vtec260

Before considering sales tax, I would go for increase sin taxes on alcohol(might not be too popular with some CP members), tobacco and a couple of cents on a litre of gas.

I know this just from Freakonomics, but I found the discussion on Gas Taxes vs. Sales Tax pretty interesting. (Again, a grain of salt with it because it is just a Freakonomics blog post)

http://www.freakonomics.com/2013/01/...o-the-gas-tax/

Politically, the idea has one major merit: voters have consistently demonstrated greater antipathy to raising the gas tax than the sales tax. In fact, when sales tax hikes are pitched as being dedicated to popular transportation projects, voters across the country have approved them at the ballot box. It’s unclear why voters seem to prefer higher sales taxes over gas taxes: perhaps it’s because a half cent sales tax increase just sounds like less than a five cent gas tax increase, although of course this may not be true since the former falls on a much broader base. In any event, McDonnell’s proposal may be a politically feasible way to raise badly needed transportation funds.

I find it interesting that people would rather have a small sales tax on everything then a larger increase to gas taxes.

[Northendzone]

It is likely inevitable that a sales tax is implemented. And let's face it that the government. That implements it will likely be unpopular and be targetted by the other parties, it is unlikely that those other parties will cancel it once it is in as they will blame the government that implements it.......

I also assume that Alberta health care premiums will soon be reintroduced sometime within the next two years

[CaptainCrunch]

I wonder about the tax barrier, I'm fine with a consumption tax in place of a income tax if that was the plan.

But as taxation at a city, municpal and in theory federal tax level come into effect combined with a health care premium you approach a barrier that the poor and middle class can't afford and you create a situation where government taxation exceeds cost of living increases in the work place.

If a family suddenly has to find a thousand bucks a year for health care premium and gets hit for another thousand or so a year because of a on top of sales tax your impacting them far more then you are the higher income brackets.