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.
– 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.
– 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
Pop Quiz: You Know You’re A Woke Punchline When…
“Do unto others as you would have them do unto you.” They can be powerful words to live by. Live-and-let-live has underpinned much of the Judeo/Christian tradition. It also informs many of the world’s other religions. For secular people the sentiment works just as well.
If you want to be loved and respected then you must extend love and respect in equal measures to those of whom you’re not all that fond. It is both a brake on hubris and an inspiration to our “better angels”. While that balance has been observed more in the breach than in the commission at times, live-and-let-live nonetheless still provides a path to mutual co-existence.
There was a time when that balance guided society. Or, as they like to say, the Good Old Days. Now, the needle monitoring live-and-let-live swings like a Hillary Clinton polygraph. If you’re with safe-space generation, no micro aggression is too small, no affront to LGBTQ-2 too slight to put off national calamity, no enemy too small to squash.
Woke causes replace empathy in the daily conversation. Why? Journalist Michael Shellenberger says apocalyptic behaviour “provides psychological comfort to secular Western people who have gradually abandoned traditional religions. For over a century, sociologists and psychologists have documented rising rates of depression and anxiety… Is it a coincidence that the people who said Western civilization was unsustainable are making it so?”
Not everyone has succumbed. How can you tell? In the spirit of comedian Jeff Foxworthy’s “You might be as redneck if…” here is your guide to discovering if you have become a Woke punchline.
If you’ve forgiven Japan and Germany for the atrocities they inflicted on the world in the 1940s but you can’t get past Sir John A. Macdonald putting the railway through the land of the Sioux, Blackfoot and Lakota… you might be a Woke punchline.
If you are concerned about world over-population but you’re nagging your kids about when they will make you grandparents… you might be a Woke punchline.
If you’re so sensitive about killing animals for food that you go extreme vegan but then attend a Pro-Choice rally in a T-shirt bragging about how many abortions you’ve had…you might be a Woke punchline.
If you’re in favour of Trudeau’s aggressive immigration policy but then your kids say they can’t afford to buy a home in a large Canadian centre… you might be a Woke punchline.
If you try to convince friends at a dinner party that Trudeau’s Carbon Tax really does fight global warming but your monthly hydro bill triples… you might be a Woke punchline.
If you think Trudeau family friends are the best people to investigate him ignoring CSIS warnings about China but you think Pierre Polievre is a little too cozy with the international forces of Qanon… you might be a Woke punchline.
If you believe Doug Ford is trying to dismantle free healthcare but then act indignant with the boys at beer-league hockey that you can’t get your knee fixed for over two years… you might be a Woke punchline.
If you think Stephen Colbert is still funny, but think that Bill Maher is now sounding like a January 6 insurrectionist… you might be a Woke punchline.
If you think banning Muslim and Sikh symbols is racist but Quebec doing the same is their cultural right… you might be a Woke punchline.
If you think the B.C. government will cure drug addiction by giving addicts a cozy place to shoot up but you tell people at work that you can’t go downtown anymore for all the junkies blocking the Starbucks entrance… you might be a Woke punchline.
If you firmly believe the prime minister is trying to keep a lid on inflation but you protest that Galen Weston is gouging you on food prices… you might be a Woke punchline.
If you donate to Save The Children but then buy a $350 pair of running shoes made by children in Asian sweatshops… … you might be a Woke punchline.
If you think career criminal George Floyd is a martyr but Egerton Ryerson is a genocidal racist… you might be a Woke punchline.
If you think today’s academic standards aren’t what they once were but then you go to school to berate the teacher for not communicating the curriculum properly to your indulged child… you might be a Woke punchline.
If you get to the bottom of this column without recognizing yourself in any of these contradictions… you might be a Woke punchline.
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Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. Inexact Science: The Six Most Compelling Draft Years In NHL History, his new book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via http://brucedowbigginbooks.ca/book-personalaccount.aspx
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