Opinion
UCP Tax Cut Hits the Target but Misses the Mark
Opinion by Cory G. Litzenberger
Well for fear of being lynched, let me talk about how I think the UCP’s Job Creation Tax Cut may be (partially) incorrect.
While I applaud politicians for laying out their plans in advance of an election, my fear is that the plan is too slow in implementation and cuts too far.
I think a tax cut needs to be moderate and quick – not slow and deep.
Here are my thoughts for various tax changes we need to do in Alberta:
General Corporate Income Tax Rate:
Instead of cutting by 1% per year over 4 years, bring it back by 2% to 10% from 12% in the first year and keep it there.
By delaying the cut as the UCP currently proposes, it could reduce the impact it will have on the economy as the change to the bottom line will not be impacted enough for a corporation to make larger investment until year two or three of the plan.
Quicker action by government will result in quicker action by business, resulting in quicker action in the economy and job creation.
10% also still makes us the lowest jurisdiction in Canada.
Personal Income Tax change to 3 brackets:
– 8% for first $50k
– 10% for the next $100k
– 12% for over $150k
This reduction from 10% on the first $50,000 saves roughly $600 in personal income tax (after factoring in the basic personal tax credit) for every individual making more than $50,000 a year.
It also saves 2% for those making under $50,000 currently.
This is an important cut in order to reward people that call Alberta home, as you will see below.
A rich person paying 12% in Alberta on their personal income is better than them paying 0% because they live somewhere else.
Harmonized Sales Tax (HST) 5%
Yes, I think we need to remove the inflationary and regressive carbon tax as it is way too high of a burden and causes a ripple effect in inflationary pricing how it was implemented.
However, I suggest we implement a 5% HST (which is a flow-through for businesses and does not have the same impact on pricing).
Now, hear me out before you break out the yellow vest!
Currently, anyone visiting our province as either a tourist or a temporary worker from another province are using our infrastructure like roads, water, and yes, even hospital emergency rooms.
When these non-Alberta residents file their personal tax returns, they file it based on their home province of residence as of December 31. Since most of them don’t have a permanent residence in Alberta, this results is them paying income taxes to other provinces, while using our infrastructure for free.
Other provincial residents not paying any taxes in Alberta while here unfairly puts the cost on all of us that live here.
If we implemented an HST similar to the GST program, low income households would still receive credit back (just like GST credit) to offset most (if not all) of any HST they pay.
The $600 in income tax savings we mentioned above for everyone else, is equivalent to $12,000 of taxable supplies consumed ($24,000 in a double income household where they each make over $50,000 of income).
Don’t forget that basic grocery and shelter do not have sales taxes, and if Andrew Scheer gets elected, neither will basic home heating.(https://twitter.com/andrewscheer/status/854364648388182016)
This income tax reduction of $600 to $1,200 would offset much of the sales tax you would pay, but would now start to charge non-Alberta resident visitors and workers.
The reason for an HST instead of a PST is that currently, an HST is required to be charged by all GST registrants across Canada. If you are a GST registrant, you are automatically an HST registrant.
For example, in my office in Red Deer, I have to charge my Ontario customers HST and send it in to the government even though my business is in Alberta.
An HST could reduce the potential for tax leakage out of our province by funneling it back to Alberta because of other retailers in other provinces requiring to charge it on things purchased outside of, or shipped to, Alberta.
Results
– a competitive corporate tax rate to attract investment and do it quicker than the original UCP plan;
– low personal income tax to attract wealthy individuals (and their tax residency) back to Alberta to make it their place of residence, again, quickly;
– removal of the inflationary carbon tax;
– insertion of a relatively low cost HST so that we can get back some of that transfer payment money from the residents of other provinces.
In Summary
– Reduce Corporate moderately and quickly.
– Reduce Individual moderately and quickly.
– Remove Carbon tax.
– Implement an HST.
I know that the slight mention of a sales tax in Alberta makes the hair on the back of your neck stand straight up, and for many conservative politicians, they would resign before suggesting it. However, even as a fiscal-conservative tax accountant like myself, I believe that if it is implemented properly with tax reductions elsewhere, it can add to the bottom line for the province.
I also think it can do so without being a burden to those that live here by taxing those that don’t.
———
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html
Daily Caller
Union Bigwigs Decline To Endorse Anyone For President Despite Rank-And-File Members Overwhelmingly Backing Trump
From the Daily Caller News Foundation
The International Brotherhood of Teamsters on Wednesday declined to make an endorsement in the 2024 presidential election just hours after releasing internal polling data showing that the workers it represents strongly favor former President Donald Trump.
Among rank-and-file members of the major union, 59.6% surveyed said they believe the Teamsters should endorse Trump, compared to just 31% voicing support for Vice President Kamala Harris, a more than 25-point gap that remained more or less unchanged after the union ordered a subsequent survey after the Sept. 10 presidential debate. Despite the poll results, the union refused to make an endorsement as there was “no majority support” for Harris and a lack of “universal support” for Trump, it revealed on Wednesday.
A Teamsters spokesperson did not immediately clarify why the union had different standards for the two candidates.
“The Teamsters thank all candidates for meeting with members face-to-face during our unprecedented roundtables,” Teamsters General President Sean O’Brien said. “Unfortunately, neither major candidate was able to make serious commitments to our union to ensure the interests of working people are always put before Big Business. We sought commitments from both Trump and Harris not to interfere in critical union campaigns or core Teamsters industries — and to honor our members’ right to strike — but were unable to secure those pledges.”
The union cited Trump’s refusal to commit to vetoing right-to-work legislation as part of its reasoning for not issuing an endorsement.
The Teamsters, which have historically supported Democrats and often donate to left-of-center causes, made an effort to court Republicans this election cycle. The union made a donation to the Republican National Committee, met with Trump, and O’Brien was even invited to speak at the Republican National Convention. Some on the right have resisted the union’s attempt to ingratiate itself among conservatives, like the Center for Union Facts which put up billboards outside the Republican National Convention calling the Teamsters “two-faced” over its history of liberal spending.
While Republicans were generally open to the Teamsters, the Democratic National Convention snubbed O’Brien by not allowing him to speak at the event, according to The Associated Press.
Harris is considerably less popular among rank-and-file Teamsters than President Joe Biden, who only trailed Trump by about 8 points in a survey ordered by the union prior to his withdrawal from the race. Union leadership met with Harris for a roundtable discussion on Monday, The Hill reported.
“We represent everybody from airline pilots and zookeepers, and we don’t just represent registered Democrats,” O’Brien said to reporters.
The Teamsters’ endorsement could have had a significant impact if it went to either candidate given the concentration of its members in the swing states of Michigan, Nevada and Pennsylvania, according to Reuters.
Daily Caller
Biden-Harris Admin’s Multi-Billion Dollar Electric School Bus Program Is A Huge Gift To China, House Report Finds
From the Daily Caller News Foundation
By Owen Klinsky
The Biden-Harris administration’s $5 billion Clean School Bus Program uses nearly 400% more taxpayer dollars per school bus and benefits the Chinese Communist Party (CCP), a House report revealed Tuesday.
The 51-page report from the House Committee on Energy and Commerce found promoting electric school buses and other electric vehicles (EVs) enriches the CCP as the EV supply chain is roughly 90% dependent on China, raising both national security and human rights concerns. It also highlighted immense expenses for taxpayers, with the average electric school bus under the first iteration of the Clean School Bus Program — the first of three iterations — costing $381,191, nearly four times that of a typical full-sized diesel school bus.
“It is clear the $5 billion Clean School Bus Program is overall a failure and, in many cases, a waste of Americans’ hard-earned taxpayer dollars,” Republican Congresswoman Cathy McMorris Rodgers, who chairs the House Committee on Energy and Commerce, said in a statement regarding the report’s findings. “The program, led by the radical Biden-Harris EPA [Environmental Protection Agency], props up a market that relies heavily upon a supply chain dominated by the Chinese Communist Party.”
Funded by the 2021 Bipartisan Infrastructure Law, the Clean School Bus Program provided the Biden-Harris EPA with funds over five years to “replace existing school buses with zero-emission and clean school buses.”
Kamala Harris led the Biden Administration's $5,000,000,000 EV school bus program.
After 3 years, just 60 buses are on the road.
That's over $83,300,000 per bus.
A vote for Kamala is a vote to waste more tax dollars on failed green programs.
— Daniel Turner (@DanielTurnerPTF) July 29, 2024
China currently accounts for approximately two-thirds of global EV battery cell production, while the U.S. manufactured just 7% as of 2022, raising national security concerns as the U.S. would likely have to depend on Chinese EV technology for its electric school buses, according to the report. Furthermore, the government-subsidized purchases of electric school buses under the Clean School Bus Program incentivize pre-existing human rights abuses in the EV supply, including the use of Uyghur forced labor in China’s Xinjiang region.
The report also identified limited range as an issue, with standard electric school buses from leading manufacturer BlueBird able to travel just 120 miles on a single charge, while some propane models can travel 400 miles before needing to refuel. The range problem can also be exacerbated by cold and warm weather conditions, with a study from the National Renewable Energy Laboratory finding electric transit buses lose roughly a third of their range at 25 degrees Fahrenheit compared to ideal conditions.
Electric school buses also increase the risk of fraud due to a lack of documentation requirements for contractors, with the EPA relying solely on self-certified applications and estimates created by applicants, according to the report. A separate July report from a Maryland county’s Office of the Inspector General resulted in millions of dollars in “wasteful spending.”
“The EPA launched the Clean School Bus program without sufficient safeguards and considerations for practical hurdles applicants may face. For example, the EPA did not require documentation for some of the required application information and allowed contractors enthused at the opportunity to receive federal funding to apply on behalf of unknowing school districts, some of which eventually withdraw from the program,” the report states. “The EPA failed to account for the considerable electric infrastructure upgrades that electrifying a school bus fleet could require, potentially leading to delays for schools in utilizing their new buses.”
The White House did not immediately respond to a request for comment.
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