October 31, 2016

Opinion: Let’s bring back Alberta’s single-rate income tax

Paige MacPhersonAlberta CTF Director

(Paige MacPherson is Alberta Director of the Canadian Taxpayers Federation. This op-ed was published in the Calgary Sun on Wednesday, October 26, 2016.)

If Albertans want to regain the province’s prosperity, they need not reinvent the wheel. They can simply look to the good ideas in Alberta’s recent history, like the single-rate income tax.

The single-rate tax made Alberta’s income tax system the simplest in Canada. It offered tax relief to Albertans at the top and bottom of the income spectrum. For years, Alberta experienced rapid economic growth.

Today, aside from the (thankfully) unending debate over the government’s disastrously unpopular carbon tax, much of the discussion of policy in Alberta has been replaced with discussion of political personalities.

However, two political parties’ policy conventions are coming up. The Wildrose Party is holding its Annual General Meeting on October 28 and 29 in Red Deer. The PCs are holding a Policy Conference in Red Deer on November 5 and 6. 

Policy proposal #25 in the Wildrose 2016 Policy Resolutions Book is to “…restore the Alberta Advantage by reintroducing a single rate flat tax.”

It would be commendable of any government of to bring back the single-rate tax. It was equitable and simple ,so simple that had the feds also adopted it you probably wouldn’t have to hire an accountant to do your taxes.

The single-rate tax was brave and innovative when it was proposed. It was a major flank of the Alberta Advantage.

That advantage is now gathering dust alongside Alberta’s AAA credit rating, low unemployment rate, balanced budgets and “zero” provincial debt balance.

There’s no reason we can’t dust some great ideas off in an effort to regain prosperity.

Any talk of the single-rate income tax needs to start by clearing up a major misconception, a misconception repeated in the Wildrose Party’s proposal.

Alberta’s single-rate income tax wasn’t actually a flat tax.

With a true flat tax, you would pay tax on your first dollar earned. With the single-rate tax, Albertans didn’t pay a penny of tax on any income under $17,787 in 2014.

Alberta’s single-rate income tax was decidedly progressive, yet was fair for all tax filers.

Mark Milke, author of a 1998 Canadian Taxpayers Federation report to the government recommending a single-rate tax, noted in the Calgary Herald that income tax-paying Albertans who earned less than $50,000 “paid just nine per cent of all provincial income tax revenues in 2012 – the lowest ratio in the country.”

At the top end, 18.9 per cent of Alberta tax filers earning over $100,000 “paid 58 per cent of provincial income taxes – more than in any other province.”

Low income Albertans should be given a tax break. The single-rate tax with a high personal exemption – alongside no sales tax – did just that.

The government’s carbon tax, for which the rebates do not cover all costs, will actually hurt Alberta’s working poor – making it a genuine concern for tax fairness.

The single-rate tax also provided incentive for hard work without penalty. As Stockwell Day, who, as finance minister, introduced the single-rate tax, said it meant “hardworking Albertans could work an overtime shift, or increase their education, and not get shoved into a higher tax bracket.”

Bringing back the single-rate income tax would be a step toward making Alberta more attractive place to live. It’s great to see a political party discussing it, and members of that party should endorse it. It would be even better if the government would bring it back.

With the PC convention upcoming, they too should make note of the success of the single-rate tax and put its revival on their agendas.

What matters not for taxpayers is which party is in power. What matters is which policies are imposed.

The single-rate income tax was and is good policy. It’s simple. It’s fair. And it’s one of Alberta’s exceptional ideas that we shouldn’t lose sight of in tough times.    


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commented 2016-12-02 00:39:39 -0500
There should be no such thing as any kind of income tax or any other theft directly off of persons wealth or paycheck… There should only be a consumers tax based upon what you buy and that will definitely hold the government in check because if their taxes are too high they don’t receive anything in the form of taxes because people just won’t spend money.
commented 2016-11-17 12:51:52 -0500
I can remember back when entrepreneur Peter Pocklington suggested a flat tax rate not only in Alberta but Canada-wide. At least the idea itself still makes sense. The poor should be exempt from income tax to a certain level, but the rich should not have to pay a higher rate. The same rate should apply to everyone, about an exemption level. And income taxes should not be deducted at all until that level is reached – the lower classes need that money up front. Why wait for a revenue Canada audit or tax file? This stuff is so simple that even i could create a basic spreadsheet to implement it!
commented 2016-10-31 22:34:27 -0400
It is totally fair and equal. And before the trolls start whining , the basic exemption means the people who make less pay nothing.
commented 2016-10-31 15:47:57 -0400
Like BILL said , first a women rapes us then a man ( I use that term lightly) from the east rapes us
commented 2016-10-31 15:44:50 -0400
Greedy socialist parasites think the money we earn belongs to them. Ralph Klein had it right with the flat rate AB tax. Nobody complained because it worked.
commented 2016-10-31 15:16:35 -0400
I’m all for it.
(It’s an idea that’s so crazy it just might work)

While we’re on the topic of taxes…..
NO Carbon tax or anything resembling anything to do with: carbon trading, carbon taxing, carbon levies, carbon fees.

Here’s an idea that I’m sure the socialites will jump on board with. How about the NDP collect their carbon taxes through crowd sourcing? Its totally fair. Those that truly believe we can reduce the Earth’s temperature by collecting taxes can participate voluntarily. Put up or shut up, I say.
commented 2016-10-31 15:15:29 -0400
If we had an operationally constitutional government Provinces would not be allowd to tax indirectly. . Two levels of government ravaging an individual’s income is obscene.
commented 2016-10-31 15:05:37 -0400
Alberta was the only province that had a single tier tax rate that ensured that EVERYBODY contributed equally!!!
Rewarding lower income earners with lower tax brackets is a joke and just breeds an entitlement mentality.

Each and every person should contribute an equal percentage of their income for taxes.