Alberta PST discussion

[Antithesis]

Originally Posted by #-3

The thing is in Calgary, a Computer, a Car or extra money to register in sports are not nice to haves they are needs if you want to raise your family in a healthy, active, and learning environment,

Anyone holding down a full time job should be able to provide these, a home, clothing, food, and probably a little bit of entertainment for themselves for themselves and 1 dependent.

I have to disagree with the list of needs that you've provided. I can see a car being a need, but I think there are ways to get around it. A computer is definitely not a need as far as I'm concerned, and extra money to play sports in order to keep kids active certainly is not. There's all sorts of things you can do to stay active that don't require you to spend any money. It all boils down to people's definition of 'need', and how they are willing to acquire those needs.

With the exemptions to things that are truly needs (such as food items and the like), I really fail to see how a consumption tax would be more punitive to the poor than the rich. Of course, I'm far from an expert in such matters.

[Sylvanfan]

If they made the tax 11% on earnings over 100k, 12% on 200k and 13% over 300 k, I doubt those high earners are leaving the province.

[#-3]

Originally Posted by Antithesis

I have to disagree with the list of needs that you've provided. I can see a car being a need, but I think there are ways to get around it. A computer is definitely not a need as far as I'm concerned, and extra money to play sports in order to keep kids active certainly is not. There's all sorts of things you can do to stay active that don't require you to spend any money. It all boils down to people's definition of 'need', and how they are willing to acquire those needs.

With the exemptions to things that are truly needs (such as food items and the like), I really fail to see how a consumption tax would be more punitive to the poor than the rich. Of course, I'm far from an expert in such matters.

Let me put it this way, if you are already spending 100% of the money you have to that the consumption tax will effect 100% of your disposable income. If you are putting 15%? into savings, and only require 30% of your net income for "essentials", the the consumption tax only effects 78% of your disposable income. That remaining 22% of disposable income can be saved, or invested (earning more money) or spent elsewhere avoiding taxation in Alberta.

And I couldn't disagree with you more.

Service jobs are required in our society, and your basically saying those people don't deserve a decent standard of living, and their kids don't deserve a chance to be part of a team or go on a school trip, or have the tools needed for learning. Do you realize that schools don't even hand out paper homework assignments anymore, everything is web based. Computers and team activities, and ability to get around are absolute essentials to raising healthy productive members of society. Anyone providing a useful service deserves compensation that can pay for all of these things, and people in Calgary are not getting that. So to tax those people more in anyway is wrong.

If we need more tax it needs to have no impact on a growing segment of Alberta that could be classified as the working poor.

[Azure]

Again I ask, why are we talking about raising income tax and not the corporate tax rates? Businesses in Canada are sitting on billions.

[Rerun]

Originally Posted by Azure

Again I ask, why are we talking about raising income tax and not the corporate tax rates? Businesses in Canada are sitting on billions.

Seems to me we're not that far out of line with the rest of the provinces (except Quebec of course)

http://www.albertacanada.com/busines...ate-taxes.aspx

[Azure]

But is that a true 10%? Or are there a bunch of loopholes businesses can exploit?

[Flash Walken]

Originally Posted by Rerun

Seems to me we're not that far out of line with the rest of the provinces (except Quebec of course)

http://www.albertacanada.com/busines...ate-taxes.aspx

That's a result of the race to the bottom instituted by Alberta.

It's called Beggar thy Neighbour.

Alberta's artificially low corporate tax rate has forced neighbouring provinces to follow suit to attempt to attract corporate tax dollars. The impact of that has been substantial:

In fiscal 2000/01, the year prior to the BC Liberals' taking power, GAAP receipts stood at 22.6 per cent of B.C.'s nominal GDP.

Now, in the coming fiscal year -- as shown in the Budget and Fiscal Plan, 2012/13 - 2014/15, released by Falcon on Tuesday -- the comparable figure is expected to fall to just 19.6 per cent of GDP.

The revenue lost to the provincial treasury -- three per cent of nominal gross domestic product (22.6 per cent, minus 19.6 per cent) -- in 2012/13 alone is $6.6 billion.

By 2014/15, when Falcon expects GAAP receipts to drop to 19.2 per cent of GDP, the annual loss will be $8.1 billion.

Dearth of reinvestment in BC

Of course, the loss of that revenue would be acceptable -- even laudable -- if the foregone receipts were re-invested in British Columbia's economy. They have not, and are not.

Consider that the province's corporate-income tax rate, which stood at 16.5 per cent before the BC Liberals took power in 2001, today is just 10.0 per cent. Profitable corporations, however, pay even less than that.

Falcon's budget shows that corporate profits will surpass $24.7 billion in 2012, yet Victoria's corporate-income tax receipts will come in at less than $2.3 billion -- or a mere 9.1 per cent of profits.

Next year, in 2013, profits are expected to rise to $25.8 billion, but the province's take will drop to 7.9 per cent.

(And, of course, the corporation capital tax -- the means by which enormously profitable financial institutions paid modest sums to the provincial treasury -- was abolished by the BC Liberals in 2009.)

Have businesses re-invested their tax-savings in British Columbia?

No. In fact, capital investment in machinery and equipment -- a key indicator of business confidence -- has plunged over the last decade, dropping to just 5.3 per cent of nominal GDP in 2010 from almost seven per cent in 2001.

[Slava]

Originally Posted by Antithesis

I have to disagree with the list of needs that you've provided. I can see a car being a need, but I think there are ways to get around it. A computer is definitely not a need as far as I'm concerned, and extra money to play sports in order to keep kids active certainly is not. There's all sorts of things you can do to stay active that don't require you to spend any money. It all boils down to people's definition of 'need', and how they are willing to acquire those needs.

With the exemptions to things that are truly needs (such as food items and the like), I really fail to see how a consumption tax would be more punitive to the poor than the rich. Of course, I'm far from an expert in such matters.

I totally agree. Cars and iPads and computers aren't needs. I'm sorry if that comes across as harsh, but its the truth. Funnily a lot of people don't have a car by choice. People rent by choice also, and while it might be some peoples desire to make more people capable of buying for their own good down the road that's not a need either. People have to live within their means, and its a fact of life that some peoples means are greater than yours. It doesn't make anyone else responsible to make sure that you can have some of lifes luxuries. If you want those things, apply yourself and work for them.

Before you get the wrong impression, I should say that I grew up in a poor family. We had no car when a lot of my friends did, let alone many other cool things that all my friends and kids that I went to school with had. Did that suck? Well, ya. Of course there were times when now thirty years later I remember in great clarity the sheer embarrassment of some situations. So, lest anyone think that I am just some spoiled rich guy who has no sympathy for low income earners its not the case. It doesn't mean I'm right about this, or that my opinion is anymore valid, but I do have some context for my comments.

Originally Posted by Sylvanfan

If they made the tax 11% on earnings over 100k, 12% on 200k and 13% over 300 k, I doubt those high earners are leaving the province.

I do agree with this. I don't want to pay more tax personally, but most people earning over $100k in general aren't leaving Alberta because of a 1-3% tax increase. I'm not sure that is the test. I mean if you increased taxes by say 8%, how many people would leave? If its a small amount do we go ahead and do that as well?

[Antithesis]

Originally Posted by #-3

Service jobs are required in our society, and your basically saying those people don't deserve a decent standard of living, and their kids don't deserve a chance to be part of a team or go on a school trip, or have the tools needed for learning. Do you realize that schools don't even hand out paper homework assignments anymore, everything is web based. Computers and team activities, and ability to get around are absolute essentials to raising healthy productive members of society. Anyone providing a useful service deserves compensation that can pay for all of these things, and people in Calgary are not getting that. So to tax those people more in anyway is wrong.

Once again, the difficulty we're having seems to arise from different understandings of what a consumption/sales tax would involve. I would expect that a sales tax would involve very little increased burden on the poor (especially when combined with some sort of tax credit that could be applied, but again, I am not an accountant). The basic staples that are actually categorized as needs - food, housing, utilities - would not be taxed in this manner, I would assume.

While I am not an accountant, what I am is a teacher, and what you are saying about the work kids do is patently false. There is no teacher that I have ever worked with that would refuse to give a student a paper copy of an assignment in order to complete their work. Further to that, even if a computer were required in order to complete work, schools are outfitted with all sorts of technology that students can use. They could arrive at school early, stay late or work over lunch hour. I don't want to turn this into some sort of 'teacher thread' but again, I have never encountered a teacher - let alone an entire school - that would not support a child in such an endeavor. Students can learn all of the things you've discussed without needing their own personal laptop or iPad or iPhone or iWhatever.

It's been pointed out (I think by Slava, even) that a pure consumption tax would actually reduce the burden on the poor in terms of taxes. I don't know if that's the way to go - I don't think we want our sales taxes in Alberta to get that out of line with the rest of our neighbors. I think a combination of removing the flat provincial income tax, slightly increasing corporate taxes and a small sales tax is probably the way to go here. I'm sure my opinion is different from many here but I appreciate the dialogue. Again, I expect it should be relatively easy to ensure that those less fortunate actually pay less in terms of taxes with the implementation of a sales tax in addition to some other changes.

And for the record, I do not think it would be easy to find a person more understanding and appreciative of people who find gainful employment of any type. As a union member, I personally place significant value on the working person no matter what color their collar may be.

[oilyfan]

Most of the developed world has a sales tax of some sort, it's not like this proposal is outlandish, like you would think from some of the reactions.

[#-3]

Originally Posted by Antithesis

Once again, the difficulty we're having seems to arise from different understandings of what a consumption/sales tax would involve. I would expect that a sales tax would involve very little increased burden on the poor (especially when combined with some sort of tax credit that could be applied, but again, I am not an accountant). The basic staples that are actually categorized as needs - food, housing, utilities - would not be taxed in this manner, I would assume.

While I am not an accountant, what I am is a teacher, and what you are saying about the work kids do is patently false. There is no teacher that I have ever worked with that would refuse to give a student a paper copy of an assignment in order to complete their work. Further to that, even if a computer were required in order to complete work, schools are outfitted with all sorts of technology that students can use. They could arrive at school early, stay late or work over lunch hour. I don't want to turn this into some sort of 'teacher thread' but again, I have never encountered a teacher - let alone an entire school - that would not support a child in such an endeavor. Students can learn all of the things you've discussed without needing their own personal laptop or iPad or iPhone or iWhatever.

It's been pointed out (I think by Slava, even) that a pure consumption tax would actually reduce the burden on the poor in terms of taxes. I don't know if that's the way to go - I don't think we want our sales taxes in Alberta to get that out of line with the rest of our neighbors. I think a combination of removing the flat provincial income tax, slightly increasing corporate taxes and a small sales tax is probably the way to go here. I'm sure my opinion is different from many here but I appreciate the dialogue. Again, I expect it should be relatively easy to ensure that those less fortunate actually pay less in terms of taxes with the implementation of a sales tax in addition to some other changes.

And for the record, I do not think it would be easy to find a person more understanding and appreciative of people who find gainful employment of any type. As a union member, I personally place significant value on the working person no matter what color their collar may be.

I understand exactly were you are coming form, I understand the exemptions for food, utilities, clothing.......

I fully understand the argument that the rich will pay more into the consumption tax than the poor.

I think you are completely missing our argument. If you maintain the same flat 10% income tax and add a 3% consumption tax, any way you cut it you are increasing the tax burden for everyone. The rich say we consume more so we will pay more into it. I am saying if a poor person is left with left with $100 month after the essentials of life, they will spend that every single month and you are leaving him with $97!. If a rich person if left with $1500/month and puts $500 in savings, and spends $200 out of province you are taxing him 1.6% of his disposable income leaving him with $1476. So yes the rich guy put in $24 this month and the poor guy put in $3. But you had double the impact on the poor guys life. And that is completely ignoring the cost of the debt cycle many people find themselves in that will be amplified by any additional tax burden.

You are also missing the problem that when you exempt Child Care, Food, Clothing, Utilities... Rich people spend allot more on all of these, so they proportionately enjoy more benefit from the exemptions

It also concerns me that the cost to the government of managing a consumption tax would be far greater than the cost of raising income taxes.

As a society if we are saying that there are people who can hold down full time jobs should not be allowed to enjoy the benefits of modern life and give there children every opportunity, we are striving far far too low. I thought we lived in one of the richest places on earth with the highest standard of living.

I welcome you to get rid of you computer, your cell phone, your car, stop registering any extra curricular activities, and then continue feeling you can put enough time in at work, or you that are providing your children with enough resources to excel in life. Even better do all of that with then understanding that upon retiring you will have to take a part time job just so you can buy your grand children a cheap Walmart Christmas present. Then come back and tell someone working 40-60 hours/week in the richest place on earth deserves that. It just makes no sense.

I also am no expert but I suspect that poor people having a higher percentage of the personal income after taxes in the province, would be a more effective way to support those in need that social programs like the food bank, right to play, whats the program that provides meals for grade school students in the morning? There are costs and logistics associated with redistributing wealth that would not be there if you just left the working poor with a bigger piece of the pie to start with.

[Antithesis]

I suppose we're just going to have to agree to disagree. I do think it should be possible - even easy - to reduce taxes on one hand and create exemptions on the other to at minimum make the tax burden of the poor smaller, even if we were to implement a PST or HST. There should be no reason why they need to pay more.

My point is to apply a tax on the so-called luxuries - electronics, cars, vacations and the like - that the wealthy spend significantly more money on than the poor do.

We share the same goals and ideals for people: greater wealth distribution and a more equitable society. From what I can read, and I don't mean to put words in your mouth, you seem to think that access to things like electronics/laptops/computers and the like is something that people are entitled to rather than a luxury.

At the core, I believe that such matters are all about choices: choosing to get more education, choosing to save money, and choosing what to spend money on. I'd love to see a world where everyone could afford such luxuries and frankly I don't see a reason why those who can afford them shouldn't pay taxes to support programs for those who can't.

Anyway, cheers - we do seem to share many of the same ideals.

[metallicat]

After reading this thread, I think the flat income tax rate definitely needs altering. The rich can afford to pay more taxes, so bring in the progressive tax rate. I would have no problem with that...then again I'm not a 1%er.

I guess my question is if the highest earners paid a few percent more every year, how much more money would yhr government have? How much of a difference would it actually make?

[edslunch]

Originally Posted by oilers_fan

After reading this thread, I think the flat income tax rate definitely needs altering. The rich can afford to pay more taxes, so bring in the progressive tax rate. I would have no problem with that...then again I'm not a 1%er.

I guess my question is if the highest earners paid a few percent more every year, how much more money would yhr government have? How much of a difference would it actually make?

I don't have a link but I saw an article that suggested making income tax more progressive, within reason, would generate about a quarter of what a sales tax would. Obviously depends on the rates

[Tinordi]

I really despise the cynical argument that any new tax revenues will simply be wasted and that government can't be trusted to do anything productive.

This ideology is the product of decades of ratcheting by right-wing think tanks to essentially brainwash people into thinking that government is the least competent institution known to man. Most of the time these claims and arguments are made up with very little to no actual data, analysis and evidence.

I'm not some marxist that thinks government will solve all our problems. But to be able to confidently say in this thread when the government has a $7 billion dollar hole blown in its budget by relying on oil and gas revenues that compensating for that revenue with a sales tax will simply mean that all that money is wasted is basically the depth of cynicism and stupidity frankly.

These people then go on to complain about the state of service about all the government provisioned services that they're used to consuming without any reflective thought that those are a) services that are being paid for by taxes and b) that this view is often directly responsible for most of their complaints. They also seem to live in an alternate reality, where huge swaths of people don't actually use and need government services, that somehow we can just magically cut 25% out of the budget and that that would be a 'good' thing.

Krugman basically hits one out of the freaking park on these types of people, many of whom post in this thread.

http://www.nytimes.com/2015/01/19/op...etType=opinion

On issues that range from monetary policy to the control of infectious disease, a big chunk of America’s body politic holds views that are completely at odds with, and completely unmovable by, actual experience. And no matter the issue, it’s the same chunk. If you’ve gotten involved in any of these debates, you know that these people aren’t happy warriors; they’re red-faced angry, with special rage directed at know-it-alls who snootily point out that the facts don’t support their position.

The question, as I said at the beginning, is why. Why the dogmatism? Why the rage? And why do these issues go together, with the set of people insisting that climate change is a hoax pretty much the same as the set of people insisting that any attempt at providing universal health insurance must lead to disaster and tyranny?

Well, it strikes me that the immovable position in each of these cases is bound up with rejecting any role for government that serves the public interest. If you don’t want the government to impose controls or fees on polluters, you want to deny that there is any reason to limit emissions. If you don’t want the combination of regulation, mandates and subsidies that is needed to extend coverage to the uninsured, you want to deny that expanding coverage is even possible. And claims about the magical powers of tax cuts are often little more than a mask for the real agenda of crippling government by starving it of revenue.

[GP_Matt]

The National Post had a great proposal out today to ax a bunch of the targeted tax breaks. It would generate an additional $23 billion in tax revenue that could be used to bring the 22% and 26% tax brackets down to 15% leaving only two tax brackets in Canada.
http://news.nationalpost.com/2015/01...ment-billions/

It is federal, but how many tax credits do we have in Alberta that could be eliminated?

[Slava]

Originally Posted by GP_Matt

The National Post had a great proposal out today to ax a bunch of the targeted tax breaks. It would generate an additional $23 billion in tax revenue that could be used to bring the 22% and 26% tax brackets down to 15% leaving only two tax brackets in Canada.
http://news.nationalpost.com/2015/01...ment-billions/

It is federal, but how many tax credits do we have in Alberta that could be eliminated?

I totally agree with that article. Its one of my most despised things that the Harper government has done, although I am surprised its that much money and would have that much of an impact.

[chemgear]

http://calgary.ctvnews.ca/poll-shows...-pst-1.2194924

The results of a new poll, asking Albertans whether or not they want to see a sales tax implemented in the province, show that residents have no taste for the proposal.

The poll, conducted on January 18 from a test group of 3,184 Albertans, found that 73 percent were not in favour of a provincial sales tax.

The firm found that the idea of a PST came dead last against other revenue streams. The preferred method in the poll was an increase of user fees and sin taxes on alcohol and cigarettes.

[Slava]

Originally Posted by Tinordi

I really despise the cynical argument that any new tax revenues will simply be wasted and that government can't be trusted to do anything productive.

This ideology is the product of decades of ratcheting by right-wing think tanks to essentially brainwash people into thinking that government is the least competent institution known to man. Most of the time these claims and arguments are made up with very little to no actual data, analysis and evidence.

I'm not some marxist that thinks government will solve all our problems. But to be able to confidently say in this thread when the government has a $7 billion dollar hole blown in its budget by relying on oil and gas revenues that compensating for that revenue with a sales tax will simply mean that all that money is wasted is basically the depth of cynicism and stupidity frankly.

These people then go on to complain about the state of service about all the government provisioned services that they're used to consuming without any reflective thought that those are a) services that are being paid for by taxes and b) that this view is often directly responsible for most of their complaints. They also seem to live in an alternate reality, where huge swaths of people don't actually use and need government services, that somehow we can just magically cut 25% out of the budget and that that would be a 'good' thing.

Krugman basically hits one out of the freaking park on these types of people, many of whom post in this thread.

http://www.nytimes.com/2015/01/19/op...etType=opinion

I could be totally wrong, but for some reason I was under the impression that you lived in BC somewhere?

[Ozy_Flame]

Originally Posted by chemgear

http://calgary.ctvnews.ca/poll-shows...-pst-1.2194924

The results of a new poll, asking Albertans whether or not they want to see a sales tax implemented in the province, show that residents have no taste for the proposal.

The poll, conducted on January 18 from a test group of 3,184 Albertans, found that 73 percent were not in favour of a provincial sales tax.

The firm found that the idea of a PST came dead last against other revenue streams. The preferred method in the poll was an increase of user fees and sin taxes on alcohol and cigarettes.

Of course it did. The word PST is like nails on a chalkboard for Albertans. And it's not surprising - for all of the people that migrated here from other provinces, part of the allure was that there was no PST.

So you have homegrown Albertans who don't know what a PST feels like (an doesn't want it), and migrated Albertans who moved to escape a PST.

Sounds like a "sky is blue" effort.