Alberta's tax rate and spending rate need to both drastically drop

It's that time of year again. Well, no, sorry, that's not true. It's a time in a year, and therefore it means that somebody in a position of authority in the Alberta government is musing about a provincial sales tax.

Unfortunately, this time the person in authority is one Mr. Jim Prentice, Premier of the province. (typically, the Premier is the one throwing cold water on the idea)

This is probably not a good sign: what the Premier says in the modern Westminster system seems to always come to pass. (Fortunately, Prentice has a less than stellar track record in this regard). So now it looks like we're going to be stuck fighting this nonsense again.

The reason for this musing by Prentice is the current dip in oil prices, which isn't expected to stay as low as they are for the future, but short term is expected to stay around $45/barrel for at least the 2015 budget year. This leaves the provincial government in a bit of a rough patch, seeing how provincial revenues fall $215 million for every $1 drop in the price of oil. As a result, the province is unable to keep up with the ludicrous spending promises its made in the past decade ever since Ralph Klein opened up the spigot.

Suffice it to say, the province has a serious spending problem: as Coleman Byfield noted last year, as the province claimed to post a "surplus" it was borrowing $5B and would have a debt load of $21.6 billion in 2017. (The provincial government famously came up with a new fake budget to hide all this: RBC pegged the 2013 deficit at $2.8B, the 2014 deficit at $355M). And that was the "rosy" budget before the price of oil took a nosedive faster than Danielle Smith's credibility. What are we spending all this dough on?

Well, the $5B was for the flood relief, new hospitals, and new schools. While the case could be made that the flood relief was a "one-time" expense (though the only thing funnier than those things always seeming to come up is the eco-freaks insisting that its part of "climate change"), the schools and hospitals certainly are not. Education and healthcare already combine for $19.3 billion dollars annually. That's $19,300,000,000. That's fifty-three million dollars a day. Sorry, but if in all that money you haven't budgeted for the buildings themselves, you're a bad planner and should be fired from your job (from AHS executive to public school superintendent). Even if you discount postsecondary education from the equation, we're talking $47,123,287 every single goddamned day being taken from productive working Albertans and funneled into wasteful education and healthcare systems which (especially in the latter case) utterly fail in every way shape and form of doing the job they are supposedly in the business of. And then it turns out they failed miserably at this while neglecting their capital budgets!

So ultimately, Alberta has a spending problem. A serious spending problem. The operational expenses alone were $40.432 billion dollars, plus another $5B for this capital spending nonsense. So the Alberta Government is spending $45,432,000,000 every year. That's $124 million bucks a day. The Alberta population is only 4.083 million, meaning that $30 every day from every Albertan is needed to keep this mammoth operation afloat. That's $11,000 annual per capita spending, and let's try to remember that this includes little bitty babies, homeless, and all that sort of jazz. It also doesn't factor in federal or municipal tax rates, this is just the provincial expenses. Alberta may be in a better position than other provinces, but just because they are complete basket cases certainly shouldn't mean we're excited to be a basket case alongside.

So naturally, this is the opinion of the morons over at the provincial NDP. Edmonton's 2nd most offensive politician Rachel Notley declared that the problem is just that Alberta isn't taking enough money from you to cover this $124 million a day spending habit. Way back in November she took umbrage with the provincial flat tax:

“No other province in the country has a flat tax. There’s a reason for it – it’s not a good idea.”
For those who aren't in the know, Notley is (again) completely wrong and out to lunch. No other province does it because their leadership is comprised of idiotic social justice warriors like herself: they hate the notion of basic fairness and equality that comes from the flat tax.

The beauty of the flat tax is quite simple, really. There's one "resource" that every person either rich or poor has in equal abundance: time. We all have 8760 hours every year in which to work, play, dance, shit, shower, screw, sleep, invest, paint, walk the dog, and play Dragon Age: Inquisition. It's up to every individual to decide how to best use those various hours of the year, and in the end the revenue-generating ones that benefit the economy are generally expressed almost perfectly in the price of their labour (this assumes, of course, that there aren't nonsensical things in the way like minimum wage laws or government industry regulations that impede on these activities. the flat tax serves as a great justification to ditch them, too). The thing that gets taxed equally is time. The Fraser Institute's famous tax freedom day becomes painfully clear in a flat tax world. When the flat tax is 10%, you work for the government for six minutes an hour and then you get the other 54. If the flat tax is 20%, you work for the government for 12 minutes and hour and the other 48 are yours. It is, in essence, the most fair of any tax system you could possibly devise. If you make $10,000 worth of paintings in a year or $10,000 worth of stocks in a year, the government takes $1000 and you take the other $9000. Rich people would of course still have to pay more in taxes: when Taylor Hall makes $73,170/hr, he is paying $7,317 of that to the provincial government (fun fact: Oilers and Flames players rule the NHL thanks to Alberta's tax system). The hapless liberal making $12.50/hr at Transcend Coffee only has to pay $1.25 an hour to the province in the form of taxes. But both him and the CEO of the company and the CEO of ATB and the nurse (again, that this is a government service sadly distorts this principle) and the MLA all have the same ruthless calculus: x% (currently 10%, this probably could drop to 8% without much fuss) of their time spent labouring goes to the provincial government.

In other words, the levithian juggernaut will consume only a certain fraction of your time. And your neighbour and your cousin and your competitor are having the same fraction robbed from their productive output. There are lots of arguments for the practicality of the flat tax. The Cato Institute talks about some of them here, if you're interested. But ultimately, the real success of the flat tax is that it is, unlike the "progressive" taxes favoured by the despicable likes of Notley and Kent Hehr, fair. (That's actual fairness, not SJW fairness, again it's important to see the giant difference.) Every single person is robbed by the provincial government of the exact same amount: months of their lives spent working and labouring only to have the fruits of their labours gobbled up by lazy unionized teachers and nurses, thrown away on whiny special interests. Nobody gets off (I'm 100% against any exemption for lower income earners) and everybody pays their fair share (as in, the exact same share anybody else has to pay).

The sales tax being floated by Prentice at least has the redeeming feature that its a better tax than Notley's progressive income tax. The sales tax's role as the tallest midget of the taxation world is generally well deserved (if not 100% true), but the main issue here in Prentice's insistence that it be a new tax, and his silly claim that the problem with the government coffers is one of revenue rather than expenses. If Alberta has a revenue problem, it is that it has been taking in far too much revenue over the past decade and change, and because it was awash in cash it decided to spend that cash on social programs. The government should never be spending on social programs. If the plan is to bring in a sales tax to 100% replace the provincial income tax then there is perhaps some merit to it.

If Prentice wants to raise a new tax, there is only one option any real Albertan would reply with: fuck off and die.

As an additional, purely aesthetic matter, bringing in a provincial sales tax would irreparably harm a certain spirit in the Albertan character: we would lose one of the key visible symbols of the right-wing superiority to the socialist in the form of no taxation. Not having a PST makes us special, it's a good thing to not charge taxes, and it was something that we could hold against the other inferior provinces to remind them that Alberta and its conservative governments are simply better. No sales tax also, as any astute traveler should be aware, puts us in the fraternal brotherhood of no income tax jurisdictions across North America: along with Alaska, Colorado, Delaware, Montana, New Hampshire, and Oregon, we Albertans got a special consideration when we travel because of our cherished no-sales-tax status. Prentice would take this away from us (note that Washington State is quick to pay attention to things like the HST, so there wouldn't be much wiggle room here). Raising a new tax that would harm Albertans both at home and abroard? Under absolutely no circumstances would that be good for Albertans, the productivity of the province, or fairness.

Hey, Danielle, isn't that one of the things you were supposed to be stopping by jumping ship?