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Tom Monto

Alberta sales tax - a gift to the rich

Recently I was involved in a discussion on how proportional representation would put a small party in control behind the scenes and how if such a small party wanted it could force in a provincial sales tax.


I responded thusly:

Much as I want to see the Alberta government address its problems in new ways and I believe PR would help it do that, I would not be in favour of PR if it actually meant that 10 to 20 percent of the people who want a provincial sales tax would be in the driver's seat.


While PR is sometimes known as minority representation, that is not the way it operates - it is majority rule, not minority rule. (Our present system - First past the post - is said to provide majority rule but it actually doesn't. Between a third to a half of each of our MLAs and MPs are elected with less than half the voters in their districts.)


Minority rule can so easily backfire. Among the retrograde steps it may produce would be the imposition of sales tax, by the way. (more on that below)


I read somewhere that a minority government (including the ones produced by PR) ,although wanting to postpone its downfall, will not be forced to do something that is totally against its ideals. For if so, why be in power? Of course there are no hard and fast rules in politics.


From what I understand about BC politics, the NDP government in BC (unfortunately) was not ready to pursue PR. And the Greens was big on it. But the NDP could not be pushed enough to bring in PR. It did though hold a referendum.


And that is how minority governments operate generally - they can be pushed to make small moves (or appear to make moves) to placate a junior partner but not to do something they really don't want to do. That is the nature of compromise that so many want to se their politicians practice.


The same, I think, would hold true for sales tax. If a major party is lukewarm about it, it could be pushed by a junior party. But a party holding minority government status that is against it (because it wants to be re-elected!) would not be pushed to just bring it in.


And junior parties have to watch - their political futures often suffer from propping up a minority government . Bob Rae's NDP suffered from making secret deal with the Liberal government. Anything it did that was unpopular it blamed on the NDP.


Minority governments often - not always but often - turn into majority governments - sometimes at the cost of their junior partner.


Now of course COVID has put everyone - except mask manufactures and vaccine makers - into debt, but it has hit Alberta the hardest because of its historical "spend it while you got it/ pretend the boom will continue forever" "build hospitals lay off nurses" strategy.


But it was noted a few years ago that Alberta would not be running a deficit if it had the personal income tax structure of its neighbour, Saskatchewan, which itself was imposing one of the lightest tax "burdens " on taxpayers in Canada.


if Alberta has fiscal difficulties, it is due to the fact it does not have a very progressive income tax. - it taxes the middle people at a rate not much less than the super wealthy. A sale tax imposes high administrative costs for shopkeepers and hits the consumers. The government is trying to get the economy going again and then talks of putting a tax on consumption. Strange.


Sales tax is imposed more on working families than the wealthy. Why? Because working families spend their money about as fast as they get it -- wealthy save more. It's just a fact.

I know Alberta not having a sale tax bugs others, but that they have sales tax and we don't is the difference they made, not what we did.


The province could work without it if it had

proper sales tax or

more lucrative royalty taxes, or

more inheritance taxes or

more government businesses that make money - the government hid how much money it made off its government liquor stores but it was a sizable chunk. Some things like utilities are natural monopolies and profit machines - why not have goveenment ownership?


There are many better ways than sale tax to raise Alberta government income .


Minority rule - whether through minority governments or unfair voting systems - is to be avoided, not encouraged.


Thanks for reading.

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