Three things to know about taxation in Alberta:
- Economic studies have shown that consumption-based taxation is better than income taxes since the latter impedes investment and savings. The HST in Alberta would bump up personal tax exemption to $57,250 per individual, lower the personal income tax rate to 9 percent, and lower the general corporate income tax rate to about 8.4 percent. It would encourage saving and investment, and improve Alberta's competitiveness (see studies by Professor Bev Dahlby, for example, on the marginal cost of raising revenue).
- A province like Alberta attracts tourists to well-known sites like Banff, Jasper, Calgary Stampede, and the West Edmonton Mall. It also attracts short-term workers who do not pay income taxes in the province. Almost 10 percent of Alberta HST revenues would be paid by non-Albertans who benefit from government spending on roads, highways and other public services.
- Alberta relies on volatile revenues that complicate fiscal planning. HST revenues are less volatile than current own-source revenues in Alberta: about two-thirds less volatile than personal and corporate income taxes and almost 75 percent less volatile than natural resource revenues.
Three myths about the adoption of a sales tax in Alberta:
Jack Mintz is the Director and Palmer Chair in Public Policy at the University of Calgary School of Public Policy.