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UCP Tax Cut Hits the Target but Misses the Mark

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7 minute read

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

CEO | Director, Canadian Tax Advisory CGL Strategic Business & Tax Advisors With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://www.CGLtax.ca/Litzenberger-Cory.html

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Environment

Bjorn Lomborg shows how social media censors forgot to include the facts in their fact check

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From lomborg.com

Dr. Bjorn Lomborg is president of the Copenhagen Consensus Center, and visiting fellow at the Hoover Institution, Stanford University. The Copenhagen Consensus Center is a think-tank that researches the smartest ways to do good. For this work, Lomborg was named one of TIME magazine’s 100 most influential people in the world. His numerous books include “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet”, “The Skeptical Environmentalist”, “Cool It”, “How to Spend $75 Billion to Make the World a Better Place”, “The Nobel Laureates’ Guide to the Smartest Targets for the World 2016-2030” and “Prioritizing Development: A Cost Benefit Analysis of the UN’s SDGs”.

The heresy of heat and cold deaths

A group of campaign researchers try hilariously, ineptly — and depressingly —to suppress facts

TL;DR. A blog, claiming to check facts, does not like that I cite this fact: the rising temperatures in the past two decades have caused more heat deaths, but at the same time avoided even more cold deaths. Since this inconvenient fact is true, they ignore to check it.  Instead, they fabricate an absurd quote, which is contradicted in the very article they claim to ‘fact-check’.

166,000 avoided deaths

Cold deaths vastly outweigh heat deaths. This is common knowledge in the academic literature and for instance the Lancet finds that each year, almost 600,000 people die globally from heat but 4.5 million from cold.

Moreover, when the researchers include increasing temperatures of 0.26°C/decade (0.47°F/decade), they find heat deaths increase, but cold deaths decrease more than twice as much:

Or here from the article:

The total impact of more than 116,000 more heat deaths each year and almost 283,000 fewer cold deaths year is that by now, the temperature rise since 2000 means that for temperature-related mortality we are seeing 166,000 fewer deaths each year.

Climate Feedback

However, this is obviously heretical information, so the self-appointed blog, Climate Feedback, wants it purged. Now, if they were just green campaigning academics writing on the internet, that might not matter much. But unfortunately, this group has gained the opportunity to censor information on Facebook, so I have to spend some time showing you their inept, often hilarious, and mostly nefarious arguments. The group regularly makes these sorts of bad-faith arguments, and apparently appealing their Facebook inditements simply goes back to the same group. It is rarely swayed by any argument.

They never test the claim

Climate Feedback seemingly wants to test my central claim from the Lancet article that global warming now saves 166,000 people each year, from my oped in New York Post:

But notice what is happening right after the quote “Global warming saves 166,000 lives each year”. They append it with something that is not in the New York Post. You have to read much further to realize that they are actually trying — and failing — to paste in an entirely separate Facebook post, which addressed a different scientific article.

It turns out, Climate Feedback never addresses the 166,000 people saved in their main text. “166” only occurs three times in the article: twice stating my claim and once after their main text in a diatribe by an ocean-physics professor, complete with personal insults. In it, the professor doesn’t contest the 166,000 avoided deaths. Instead, he falsely claims that I am presenting the 166,000 as the overall mortality impact of climate change, which is absurd: anyone reading my piece understand that I’m talking about the impact of temperature-related mortality.

Perhaps most tellingly, Climate Feedback has asked one of the co-authors of the 166,000 Lancet study (as they also very proudly declare in their text). And this professor, Antonio Gasparrini, does not only not challenge but doesn’t even discuss my analysis of the 166,000 avoided deaths.

Climate Feedback not only doesn’t present any reasonable argument against the 166,000 avoided deaths. It has actually asked one of the main authors of the study to comment and they have nothing.

In conclusion, Climate Feedback simply has no good arguments against the 166,000 people saved, and yet they pillory my work publicly in an attempt to censor data they deem inconvenient. . That academics play along in this charade of an inquisition dressed up ‘fact-check’ is despicable.

Rest of Climate Feedback’s claim is ludicrously wrong

So, beyond the claim of 166,000, Climate Feedback is alleging that I say the following: “those claiming that climate change is causing heat-related deaths are wrong because they ignore that the population is growing and becoming older.”

This is a fabricated quote. I never say this. Climate Feedback has simply made up a false statement, dressing it as a quote of mine, even though I never claimed anything like this. This is incredibly deceptive: it is ludicrous to insist that I should argue that it is wrong to claim “climate change is causing heat-related deaths.” I simply do not argue that “climate change is not causing heat-related deaths”

Up above I exactly argued that climate change causes more heat deaths. My graph shows that climate change causes more heat deaths.

And I even point out exactly that the temperature increases cause heat deaths in my New York Post piece:

“As temperatures have increased over the past two decades, that has caused an extra 116,000 heat deaths each year.” Sorry, Climate Feedback, but the rest of your claim is straight-out, full-on stupid.

Evaluation of Climate Feedback’s review

So Climate Feedback is simply wrong in asserting that I somehow say climate change is not causing heat-related deaths — because I do say that, even in my New York Post article:

Climate Feedback doesn’t show anywhere in their main text how the 166,000 avoided deaths are wrong. They even ask one of the main authors of the study, and that professor says nothing.

Conclusion

Climate Feedback’s deceptive hit job is long on innuendo and bad arguments (see a few, further examples below). But the proof really is in the pudding.

They make two central arguments. First, that my claim of “Global warming saves 166,000 lives each year” is incorrect. Yet, they never address this in their main text. And while they get information from one of the main authors of the Lancet study that is the basis for the 166,000 lives saved, they get no criticism of the argument.

Second, they assert that I somehow say that it is wrong to claim climate change is causing more heat-related deaths, which is just ludicrous because I make that very point, even in my New York Post article:

Verdict: Climate Feedback is fundamentally wrong in both their two main claims.

Additional point: It really shouldn’t be necessary to say, but you can’t make a ‘fact-check’ page, write page after page of diatribe, ignore the first main point and bungle the other main point, and then hope at the end nobody notices, and call my arguments wrong. Or, at least, you shouldn’t be able to get away with such nonsense.

Two examples of the inadequate arguments in the rest of Climatefeedback

Lomborg doesn’t have a time machine

Climate Feedback asks professor Gasparrini, co-author of the Lancet study above. He doesn’t cover anything on the 166,000 deaths avoided. Instead, his text entirely discusses a 2016 WSJ article where I used his 2015-article but he criticizes me for not citing his 2017 article:

The reason I didn’t cite his 2017-article is of course that I didn’t have access to a time machine when I wrote my article in 2016.

Indeed, I have corresponded with Professor Gasparrini several times later about his 2017-article. And yes, his 2017-study indeed shows that at very high emissions, additional heat deaths will likely outweigh avoided cold deaths towards the end of the century. But his study also shows that all regions see additional heat deaths vastly exceeded by extra avoided cold deaths from the 1990s to the 2010s — the exact point I’ve made here.

Serious academics take into account population growth and aging

In a refreshing comment, Climate Feedback asks Philip Staddon, Principal Lecturer in Environment and Sustainability from the University of Gloucestershire to chime in. He says, that I’m wrong to criticize the lack of standardization from population growth and aging, because clearly “all serious academic research already takes account of population growth, demographics and ageing”:

I, of course, entirely agree with Staddon, that all serious academic research should do that. But the research that I have criticized has exactly not done so, resulting in unsupported claims. So, for instance, in the Facebook post that Climate Feedback discusses, I show how CNN believes that a study shows a 74% increase caused by the climate crisis:

This is based on not adjusting for population and age, and is actually from the press release of the paper (and in table S6 in the paper).

Likewise, Staddon might have noticed that a very high-profile editorial in the world’s top medical journals made that very amateurish mistake. They argue that temperature increases over the past 20 years have increased deaths among people 65 and older:

But they cite numbers that are not adjusted for age or population — indeed the world’s population of people above age 65 has increased almost as much:

I absolutely agree with Principal Lecturer Philip Staddon on the necessity of making sure that good arguments in the public sphere are adjusted for population and aging before blaming climate. Unfortunately, they often aren’t

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COVID-19

Ethics prof at one of Canada’s oldest universities on temporary paid leave for stance against forced vaccinations

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Huron University in London, Ontario, was incorporated way back in 1863 as one of the founding colleges of Western University.  Western is one of the largest universities in Canada.

On the University’s website under academic objectives, Huron University strongly encourages “critical thinking through excellent teaching and research”.  But it appears critical thinking may have landed a university ethics professor in a career ending dilemma. Dr. Julie Ponesse has been teaching Ethics at Huron for 20 years.  Dr. Ponesse says the University of Western Ontario has barred her from campus and put her on temporary paid leave for taking an ethical stance against the University’s vaccine policy.

Here is the first measure of that policy as highlighted on the University website.

  • Mandatory Vaccination on Campus: Huron and its affiliate partners are implementing a vaccination policy which will require proof of vaccination or have an exemption in order to come on campus, including living in residence. Those with an exemption must be tested for COVID-19 twice weekly. There is no testing option for those who choose not to be vaccinated. Those without proof of vaccination or an exemption will not be permitted on campus.

Professor Ponesse says just a few days before the school year began, she was mandated by her employers to take the vaccine immediately.  As an Ethics educator she decided it was her job to teach her students it’s ethically wrong to force people to take a vaccine.  Instead of lining up for the jab, Dr. Ponesse went to her office and recorded a video which has now been seen across Canada tens of thousands of times.  At the end of the video a statement appears indicating Professor Julie Ponesse was dismissed by her employers on September 7.

The video is being shared and commented on by Canadians from coast to coast, in various social media platforms.  It’s a fascinating discussion on ethics in a terribly confusing and controversial time, by an experienced ethics professor who has courageously put her ethics ahead of her career.

The video has been taken down by both Facebook and Twitter for statements Ponesse makes about the effectiveness of vaccines.  This video was reloaded to Facebook.  Supporters of Dr. Ponesse have also posted it to Instagram.  We’ve posted two links in case one is taken down yet again.

 

 

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