Wednesday, February 13, 2008

Real Tax Relief for Albertans part I

A Wildrose Alliance government would

- eliminate health care premiums within 30 days of being elected

- raise the basic personal exemption amount to $20 000

- cut the provincial corporate rate from 10% to 8%

- built the Heritage Trust Fund to the point where the investment revenue can replace personal tax revenue

These four principles, together with our call to restrain spending growth to levels more comparable to other Canadian jurisdictions (the P"C" govt is currently spending almost 40% more per person than big government Quebec), form the core of the Wildrose Alliance economic plan, and it is so defensible I believe even Paul Krugman, the most able and articulate of the "left leaning" economists (there aren't many), would approve of it.

The immediate elimination of health care premiums and the raising of the basic personal exemption amount would mean that an individual earning $21 000 a year would save $528 a year in health care premiums and $456.50 in taxes. That's $984.50.

Ladies and gentlemen, $1000 in savings makes a serious difference to someone making $21 000 a year. I know because I've been there. My first degree majored in philosphy (minor: ancient history) and after graduation employers weren't exactly beating down my door to give me a cushy job (I believe demand for philosophers follows a long wave Kondratiev cycle: every 2000 years everyone's got a have one on the payroll, but the late 1990s was not such a time!) I took a job at a sheet metal shop, and after faithfully showing up every weekday at 7 AM for a year I asked for and got a raise from $8 to $8.50 an hour. I'd totaled my car just a couple months after graduation and had to get a new one in order to get to work so had car payments on top of my rent to deal with. It wasn't easy. I couldn't even rustle up the $100 I needed to apply to Stanford Business School. If I had been certain to be admitted, then, yes, I could have begged for, borrowed, or stolen $100. But I didn't feel I could justify it if my probability of admission was 10%, and it wasn't until I got my GMAT score in March (too late for Stanford) that it become apparent my chances would have likely been better than 50% (I scored 770, or 99th percentile in the quant AND 99th percentile in the verbal).

All the above to say that another grand would have made a huge difference in my life. A bigger difference than anything the NDP has to offer. The Alberta NDP say they are going to take "big $$$" out of politics (except for union $$$, of course) and implement their green plan. I think back to when I was struggling financially and ask myself whether I would rather have those NDP promises or $1000 in hand and I don't think I'm unusual in picking the cash! Today, it isn't even an either/or, since free market supporting economists readily concede the need for government environment measures (an argument I'll get to later) and as for "big $$$", the politician in my riding who can't scrape enough money together to get his message out is most certainly not Ray Martin! I'd say I'm running my campaign out of the back of my car, except that I don't even have a car!


Mark said...

Your argument elides any Albertans who have responsibility for more than themselves. A low-income family would probably prefer free child care to a measly tax break. What about them?

Brian Dell said...

Hi Mark!

Obviously, a family will prefer a free goverment service worth $10 000 to a $2000 tax cut. However, what I'm comparing to is what the NDP is offering, and the Alberta NDP has never called for free child care.

The NDP is in fact campaigning on
- rent controls and aid for seniors
- high royalties
- spending on "green" projects
- getting "big $$" out of politics

None of these things really help poor families. Rent controls are unsustainable over the long term, and discriminate against newcomers for no particular reason. What is hurting seniors now is the cost of living. They are on fixed incomes. But the solution to that is slower wage inflation and increasing government spending will just make the inflation worse. Careful thought about who pays and who benefits is required. The other planks also do not necessarily do anything for the poor. The economy is a complex thing, and many of the measures favoured by the NDP do not have the outcomes they like to think. That said, their conscience is in the right place.