Last week Finance Minister Ron Leipert let the word “sales tax” pass his lips without the word “never” or “no” preceding it. As has become tradition on Alberta, this generated all kinds of fun headlines and only days later the same words passed Premier Redford’s lips with “NEVER” in close proximity.
A couple points.
First, when an Alberta politician suggests that a discussion about sales taxes is warranted, the reaction is similar to what you’d get if someone broke wind in an express elevator. This is probably not healthy – the reaction to sales taxes I mean. On the one hand, consumption taxes are superior to income taxes so a debate is worth having. On the other hand, with RRSP, tax free home ownership, RESPs, DPSPs, and the new PSPPs, our income tax is excludes the savings of all but the most wealthiest Canadians(unfortunately though, the wealthiest of Canadians provide a disproportionate amount of funds for new investments). All of which is a long way to saying that this debate is worth having. And I was glad to be part of that debate at a recent School of Public Policy conference on the subject of sales taxes, and I look forward to the release of the conference papers.
Second, what in the world are we talking about taxes for? Alberta has a spending problem, not a revenue problem. Every minute Alberta politicians spend talking about taxes – new, old, higher, lower – is a minute they are NOT talking about our spending problem. And that’s not good. In the 1990s Alberta dealt with its spending problem – it cut per capita spending by about a fifth. Only then did it cut taxes by introducing a revolutionarysingle rate tax (full disclosure: I worked for Stockwell Day during this time). So enough with the distractions, lets get on with talking about our spending problem.