Tax REform....

At lunch time yesterday I heard this story.  IT is a proposal to introduce a Provincial goods and service tax to Alberta in the name of reducing corporate and personal income taxes.

Now I am not opposed to consumption taxes.  I think they have a role in the tax system.  But this proposal is not the right solution for Alberta at this time.  In fact this proposal would COST people at the lower end of the spectrum, the people currently not paying income tax at all money.  It would, in fact RAISE their taxes.  And I can almost guarantee that the proposed tax credit would be less than the amount people would pay out over the year.

The better cure for the Alberta tax system is to dump the (very bad, benefits the high income earners) flat tax and return to a graduated tax system.  And then maybe you can legitimately raise the personal exemption so more Albertans are not paying income tax (although I would question raising it as high as they are suggesting).


But in the end it is pretty much political suicide in Alberta to try and introduce a consumption tax.  So I suspect this will go on a shelf somewhere and collect dust.