2015 Alberta Budget Discussion

[darklord700]

http://www.msn.com/en-ca/news/canada...ess/ar-AA9Xf5j

The budget will only be released tomorrow but Prentice's speech last night has already pathed ways for it.

No PST
Probably no Corporate tax increase or royalty hike
Probably no change to flat personal tax

Instead a new health care "levy" that is progressive to personal income level will be used. That is just progressive personal tax in disguise to me.

More details will come on March 26 but a levy throught the income tax system is just weird. And doing it this way, Prentice makes sure the employers aren't paying for employee's levy like that in the past.

[Slava]

^ I can't believe he is cutting the GST?!

[darklord700]

Originally Posted by Slava

^ I can't believe he is cutting the GST?!

Good catch. Fixed it now.

[Kavvy]

Originally Posted by Slava

^ I can't believe he is cutting the GST?!

This made me laugh way harder than it should have.

Alberta gone mad with power.

[troutman]

Originally Posted by darklord700

No PST
Probably no Corporate tax increase or royalty hike
Probably no change to flat personal tax

Scared Cowards.

We need to do at least three of the four.

[darklord700]

Originally Posted by troutman

Scared Cowards.

We need to do at least three of the four.

I was expecting to see "cuts" but now it's hold the line. Prentice has gone Charles Barkley - the best defense is not to offend.

What was not mentioned in the speech was borrowing. My guess is that we will borrow and by making this a "ten year long term plan", borrowing is OK and deficits are fine.

When the budget doesn't work for you in the short term, think long term.

[peter12]

Everything but corporate taxes should be raised.

[Fozzie_DeBear]

Doing what's popular vs what's right...

[bizaro86]

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?).

[CliffFletcher]

Alberta just has to adopt the tax regime if the next lowest-taxed province in the country, Saskatchewan, and the deficit would pretty much disappear overnight. So still tied for lowest taxes. Budget balanced.

[troutman]

Originally Posted by Fozzie_DeBear

Doing what's popular vs what's right...

Are there any polls on this? I think many would be ok with fair tax increases.

[Flash Walken]

Originally Posted by CliffFletcher

Alberta just has to adopt the tax regime if the next lowest-taxed province in the country, Saskatchewan, and the deficit would pretty much disappear overnight. So still tied for lowest taxes. Budget balanced.

This is not a time for logical and reasoned solutions, it's a time to dig into the barrel of tried and true conservative policies that don't do a damn thing to address the crippling financial issues created by the previous conservative policies.

[shermanator]

If what is stated in the OP is the case, then that is just flat out spineless IMO.

We have a revenue problem that is exaggerated when royalty revenue is decreased due to the decline in oil prices. We've been using royalty revenue to pay artificially low taxes for decades, and it's time to stop.

I just wish a government just once had the balls to do what is right and not what is popular.

[Flash Walken]

Originally Posted by troutman

Are there any polls on this? I think many would be ok with fair tax increases.

A Mainstreet Technologies poll provided to the Calgary Herald, conducted Sunday, suggests Albertans are highly resistant to any tax hikes. Only 15 per cent of survey respondents say they’d favour increased taxes. Spending cuts are the preferred solution of 43 per cent.

But when asked directly what sort of revenue increase they’d condone, an Alberta PST or harmonized sales tax is the least popular option, the first choice of only nine per cent of those surveyed, according to the automated phone survey of 3,184 Albertans.

Far more palatable are user fees and sin taxes (22 per cent), reintroducing health care premiums (18), an overall personal income tax hike or a higher taxes on the wealthy (17) or raising energy royalties (14).

Interesting that health premiums are coming back, but increasing taxes on the wealthy, which was essentially tied with healthcare premiums in terms of public opinion, is not on the table.

[CliffFletcher]

Those polls would be more credible if they asked people what services they currently use that they would be willing to see cut.

A year or so ago the Alberta government had an online tool where you could play around with tax rates, user fees, and program spending. The trick is everything was a tradeoff. Which, curiously, is how the real world works. But Alberta voters have been shielded by energy royalties from acknowledging those trade-offs.

Then there are those voters (aka Sun readers) who think if we cut MLA salaries and expense accounts the province's finances would be back on track.

I know it sounds gimmicky, but I think Prentice should have used a pie graph to show voters where the money in this province actually goes. Because most people in this province haven't a clue of even the basic breakdown of government revenues and spending.

[mrkajz44]

Everyone is okay with raising taxes, as long as it doesn't apply to them.

Tax the wealthy!
Tax the corporations!
Sin tax!

Easy to be on board with tax raises when it doesn't really apply to you.

[Parallex]

What they should have done was introduce a 2% PST when the GST was cut and basically turn that into a revenue transfer from the federal to provincial level. The individual tax burden would have remained the same and thus the political fallout would have been muted. To late for that now thou.

Really, the flat tax has to go. It's not like you can't introduce a progressive tax regime and still have the lowest in Canada. I'd probably keep corporate taxes the same for now and revisit when the global price of oil recovers.

[troutman]

Originally Posted by mrkajz44

Everyone is okay with raising taxes, as long as it doesn't apply to them.

Tax the wealthy!
Tax the corporations!
Sin tax!

Easy to be on board with tax raises when it doesn't really apply to you.

It does apply to me, and I'm fine with it.

We take care of our own.

[crazy_eoj]

Originally Posted by Flash Walken

Interesting that health premiums are coming back, but increasing taxes on the wealthy, which was essentially tied with healthcare premiums in terms of public opinion, is not on the table.

More interestingly, spending cuts are far and away the #1 choice of Albertans, but according to Prentice's speech we aren't seeing any of those either.

[llwhiteoutll]

We need to institute user fees for the hospital/ER. People show with bull#### complaints and use it as a walk-in clinic. $50 a visit would keep the people looking for a place to sleep, someone to diagnose a sniffle and people looking for drugs away. It would also have the added benefit of driving down wait times.