April 23 2012: Alberta Provincial Election

[MarchHare]

Economically, though, the GST is not a "wretched tax", as unpopular as it may be. That form of taxation is one of the least harmful to the health of the overall economy. Economists who know way more about this kind of thing than you or me have proposed increasing the GST (and expanding it to cover more items) but off-setting the increase with more rebates for low-income Canadians and reduced income tax rates. If this was done properly (cue sceptical posts from people who will say the fed NEVER does anything properly), this type of tax shift would be revenue-neutral to both the government and ordinary citizens, but the economy would benefit immensely (which in turn would result in increased government revenue).

[Jacks]

Originally Posted by Brotato

I was goingto vote WRP in this election, but not now. This proves these guys are more about getting power (vote buying) than having great plans for this province's future.

Not to defend the Dannibucks but all of the parties are trying to buy your vote in one way or another.

[IntenseFan]

^MarchHare, one thing I will agree with you on with respect to the GST is that is makes no sense that it is incurred on somethings and not other things. In fact there is a whole niche GST-tax law industry that had cropped up around it. It's a sales tax, shouldn't it be on everything? You shouldn't need to read the entire Excise Tax Act to figure out if you pay it or not, you should just have to pay it.

However, the reason I think the GST is a wretched tax was that it was brought in to reduce the deficit, it did so, but was then kept anyway and other than the Fed-Con 2% reduction to it, it will probably never be abolished.

If it were used more in the way you explain, i.e. to provide lower income taxes for all Canadians and more rebates for low-income households, then I would certainly be more inclined to agree with you. However, IMO it is being used as an additional tax to our payroll taxes and user fees and the government has become entirely dependent on it as a supplemental source of revenue.

[MarchHare]

If it were used more in the way you explain, i.e. to provide lower income taxes for all Canadians and more rebates for low-income households, then I would certainly be more inclined to agree with you. However, IMO it is being used as an additional tax to our payroll taxes and user fees and the government has become entirely dependent on it as a supplemental source of revenue.

It already has been used like this, though. Back when the government had balanced/surplus budgets, we saw income and corporate tax reductions from both the Chretian-Martin Liberals and the Harper Conservatives. These tax cuts would not have been possible without the GST to balance the books. I'd like to see it taken a step further: the GST should be increased and applied to more items but offset with cuts to taxes that are more harmful to the economy.

[Rathji]

Originally Posted by Jacks

You're not being cynical, it's 100% vote buying.


That was Liberal strategist Scott Ried with his "beer and popcorn" comment. That helped tag the Libs as elitist and out of touch, he would love to take back that moment I'm sure.

To this day, I still call it the beer and popcorn money.

[albertGQ]

Does anyone have a link that shows the GST was implemented only to eliminate the deficit? I was in junior high at the time but I don't recall that's how it was presented to the Canadian public. I thought it just replaced the manufacturers tax and became a visible tax instead of a hidden one

[IntenseFan]

^ I was still in grade school albertGQ, so I might be remembering wrong, but I seem to recall at least some individuals in the Federal government saying it would be a deficit reduction measure. Looking on wikipedia, it doesn't say that.

[CaptainCrunch]

Originally Posted by albertGQ

Does anyone have a link that shows the GST was implemented only to eliminate the deficit? I was in junior high at the time but I don't recall that's how it was presented to the Canadian public. I thought it just replaced the manufacturers tax and became a visible tax instead of a hidden one

I'm foggy on it because the memory is hidden behind a think wall of bong debris. But I thought it was presented as a more efficient and easier to track and implement tax then the MST and it was far more fair and transparent.

I don't remember it being marketed as a debt reduction pool as it was suppossed to be fairly revenue neutral to the MST.

[VladtheImpaler]

Originally Posted by CaptainCrunch

I'm foggy on it because the memory is hidden behind a think wall of bong debris. But I thought it was presented as a more efficient and easier to track and implement tax then the MST and it was far more fair and transparent.

I don't remember it being marketed as a debt reduction pool as it was suppossed to be fairly revenue neutral to the MST.

This is my recollection also.

[IntenseFan]

Ok, so I probably remember wrong.

Didn't mean to derail the thread.

[Tinordi]

Originally Posted by MarchHare

It already has been used like this, though. Back when the government had balanced/surplus budgets, we saw income and corporate tax reductions from both the Chretian-Martin Liberals and the Harper Conservatives. These tax cuts would not have been possible without the GST to balance the books. I'd like to see it taken a step further: the GST should be increased and applied to more items but offset with cuts to taxes that are more harmful to the economy.

Amen.

And Alberta should be adopting a harmonized sales tax with the GST to pay for their operational budget, not resource revenues!

[You Need a Thneed]

Does the WRP really think the money stays in the economy? many people would just spend the money of Electronics, etc. The money is going to the manufacturers in other counties, and the retailers who have head offices in other countries.

Spending the money on infrastructure creates hundreds of jobs, for workers who will spend their income here, and the profits for the companies that do the work will generally stay here too, and then the province receives tax back from those companies.

The billion dollars a year would allow for huge investments in public transportation, or other things that would benefit many, but have not been built because of the sheer cost to get them going.

[SebC]

Originally Posted by crazy_eoj

Point being, and still is, even at the depth of the dark klein days, we still spent as much as other provinces.

Interesting. I feel this makes my point. Alberta needs to spend above average.

Originally Posted by crazy_eoj

We over funded all spending until we accumulated a huge debt of over 22 billion dollars by 1993. How could we possible have accumulated an equal infrastructure deficit at the same time? Then we reduced spending to an amount equal to the Canadian average for about 5 years, and then proceeded to overspend again for the past decade until we have exhausted the savings we have accumulated and racked up another deficit.

There are many ways in which this is possible: population growth creating above-average infrastructure requirements, spending directed to other things instead of infrastructure, undertaxation. The funny thing is your analysis completely ignores what our infrastructure requirements are. But if you look at how we closed hospitals (in Calgary) then had to expand and build new ones to get that capacity back, I don't know how anyone can say we never had an infrastructure deficit.

If you want an example of a current infrastructure deficit, well Highway 63 (the one that goes to Fort McMurray) is a good example. Let's see: boom creates population growth and commercial activity. This boom creates a lot of revenues for the province, but the province doesn't put those revenue into twinning the highway fast enough. Now, it's the deadliest highway in Alberta and a huge problem. This is how a growth drives infrastructure demands. It's an infrastructure deficit because we are behind on needed construction.

Even the Wildrose agrees we need to finish twinning it. (http://www.fortmcmurraytoday.com/Art...aspx?e=3522819). I wonder what they think its per km costs will be, compared to other provinces where labour is cheaper. ()

[Cowboy89]

Originally Posted by You Need a Thneed

Does the WRP really think the money stays in the economy? many people would just spend the money of Electronics, etc. The money is going to the manufacturers in other counties, and the retailers who have head offices in other countries.

Spending the money on infrastructure creates hundreds of jobs, for workers who will spend their income here, and the profits for the companies that do the work will generally stay here too, and then the province receives tax back from those companies.

The billion dollars a year would allow for huge investments in public transportation, or other things that would benefit many, but have not been built because of the sheer cost to get them going.

I'm sure all the equipment and implements used to build the added infrastructure are all manufactured in Alberta? Maybe some of the $300 Danielle Dollars would go to '100% Made in Alberta prostitutes' at new Red Light districts!

While the concept of infrastructure spending can most definately be beneficial vs. immediate consumption, we should caution to not extend your arguement too far as it would imply that the economy would perform much better if only the good people in Edmonton had their hands on more of our money to intelligently command it's most efficient allocation.

At some point (And I'm not necessarily saying the arguement here in Alberta is at this level), some infrastructure projects are actually white elephants. Perfect example would be if the province jacked taxes and then built a high-speed train between Calgary and Edmonton. In that case not only would the province be wasting capital funds on a project that has no economics, but it would also be indenturing the budget to pay it's operating costs forever into the future.

The economic arguement is not as cut and dry as simply saying infrastructure projects = good, refund cheques = bad. Often the sum of individual market decisions on transactions beats how a bunch of politicians decide.

[You Need a Thneed]

Originally Posted by Cowboy89

I'm sure all the equipment and implements used to build the added infrastructure are all manufactured in Alberta? Maybe some of the $300 Danielle Dollars would go to '100% Made in Alberta prostitutes' at new Red Light districts!

While the concept of infrastructure spending can most definately be beneficial vs. immediate consumption, we should caution to not extend your arguement too far as it would imply that the economy would perform much better if only the good people in Edmonton had their hands on more of our money to intelligently command it's most efficient allocation.

At some point (And I'm not necessarily saying the arguement here in Alberta is at this level), some infrastructure projects are actually white elephants. Perfect example would be if the province jacked taxes and then built a high-speed train between Calgary and Edmonton. In that case not only would the province be wasting capital funds on a project that has no economics, but it would also be indenturing the budget to pay it's operating costs forever into the future.

The economic arguement is not as cut and dry as simply saying infrastructure projects = good, refund cheques = bad. Often the sum of individual market decisions on transactions beats how a bunch of politicians decide.

Certainly it's not as black and white as I made it out to be. But there is no question as to whether there would be more economic benefit to Alberta by building needed infrastructure than to give every person $300 every year. The dollars to build infrastructure would mostly stay in Province, and nearly all in country. However, a significant portion of rebate cheques would end up outside our country very quickly.

[Slava]

Originally Posted by Cowboy89

I'm sure all the equipment and implements used to build the added infrastructure are all manufactured in Alberta? Maybe some of the $300 Danielle Dollars would go to '100% Made in Alberta prostitutes' at new Red Light districts!

Just when I thought that there was no way I could vote for them, they come out with a plan like this that I can quite literally get behind!

[Cowboy89]

Originally Posted by You Need a Thneed

Certainly it's not as black and white as I made it out to be. But there is no question as to whether there would be more economic benefit to Alberta by building needed infrastructure than to give every person $300 every year. The dollars to build infrastructure would mostly stay in Province, and nearly all in country. However, a significant portion of rebate cheques would end up outside our country very quickly.

You have no basis for this claim. You just assume that eveyone will specifically buy something imported like an iphone and it will only pad apple's bottom line. It's probably fairer to expect that it will be spent much like any other earned dollar Albertans make, which is on pretty much everything from locally provided goods and services to imported goods and services. Yes there is leakage outside the country, but so too would be the implements into infrastructure costs.

[SebC]

Originally Posted by Slava

Just when I thought that there was no way I could vote for them, they come out with a plan like this that I can quite literally get behind!

Not only that, but I think we've figured out how they're going to close their budget gap.

[sevenarms]

Originally Posted by Cowboy89

You have no basis for this claim. You just assume that eveyone will specifically buy something imported like an iphone and it will only pad apple's bottom line. It's probably fairer to expect that it will be spent much like any other earned dollar Albertans make, which is on pretty much everything from locally provided goods and services to imported goods and services. Yes there is leakage outside the country, but so too would be the implements into infrastructure costs.

My $300 would go to into my bank account and my spending habits would not change at all. I think most Albertans would do the same.

[You Need a Thneed]

Originally Posted by Cowboy89

You have no basis for this claim. You just assume that eveyone will specifically buy something imported like iphone and it will only pad apple's bottom line. It's probably fairer to expect that it will be spent much like any other earned dollar Albertans make, which is on pretty much everything from locally provided goods and services to imported goods and services. Yes there is leakage outside the country, but so too would be the implements into infrastructure costs.

No, I didn't say that everyone will go out and blow it on electronics. However, I do think that many people would use the money for things that they don't normally purchase, i.e. things not normally in the budget. The likelihood that such items are items not manufactured in Alberta or Canada (or made by companies with head offices outside of Alberta/Canada) is certainly higher than it is for more "everyday" items. Many people wouldn't even use a Canadian retailer, as they would purchase items onlline.

As far as infrastructure costs, what money would actually go out of country? Again, much of the cost would stay in province. Local contractors can do work cheaper than companies from other provinces, as travel costs can add up quickly. Most materials are purchased locally, and lots of the required manufacturing would happen here. There are some large ticket things for which it wouldn't exactly be the case, (i.e. LRV cars for a mass transit system). For the majority of infrastructure work however (there's tonnes of stuff that the public never knows, care, or thinks about), a very high percentage of the labour, material, fabrication, etc, is very local.

Anyway, my point was that spending money on infrastructure is a much better idea than giving rebates, for a variety of reasons, most of which have been talked about already.