Just be honest about it

By Medicine Hat News Opinon on October 31, 2019.

gslade@medicinehatnews.com@MHNGillianSlade

The concept of “political spin” is all too familiar but it appears details of the recent provincial budget have gone beyond that.

The UCP government has de-indexed tax brackets which will affect most Albertans with the equivalent of a small tax increase.

In the government’s 200-page budget document, which can be found online, you have to go all the way to page 149 to see the details and even then the “political spin” appears to be about trying to fool Albertans.

Under the heading of “Reducing Tax Expenditures” and an opening paragraph of “a commitment to get Alberta’s spending back under control” you would be forgiven for thinking it was about measures to reduce government spending.

We are told Alberta’s tax credits are higher than other provinces.

“Annual indexing increases these amounts automatically every year resulting in a significant annual tax expenditure for government.”

What that actually means is that it reduces government revenue.

“…. continuing to index these benefits is unaffordable for the time being… This measure (de-indexing) is estimated to reduce tax expenditures by about $20 million in 2019-20 … and $196 million in 2021-22. In total this measure is expected to save over $600 million by the end of 2022-23.”

What that quote actually means is that de-indexing will result it us paying more provincial tax and therefore increase government revenue. According to a Calgary economist the tax increase is the equivalent of a 0.3% sales tax or an average of $150 per family.

Why not just tell Albertans the government needs this increased revenue to address the deficit and the debt?

Breaking with the traditional position of applauding most Conservative government initiatives, the Canadian Taxpayers Federation issued a press release this week opposing the “hidden and regressive” practice of de-indexing – also called bracket creep – in the budget.

What is even more interesting is that Jason Kenney, wrote a newspaper column on Dec. 10, 1997 about de-indexing. He said it “pushes middle-income earners into higher and higher tax brackets, as their real incomes remain the same. For low and middle income families, bracket creep can suck enough money from the family budget to cause serious financial hardship.”

Bracket creep is what the Reform Party fought against, and former Medicine Hat MP Monte Solberg was very vocal about it.

Federally income tax was indexed to inflation in the 1970s. It was not until 1985 that Mulroney de-indexed it and 15 years later Chretien re-indexed it.

At the end of the day we now have a premier who traditionally was against de-indexing now slipping it into a budget and hiding it away on page 149.

In this very conservative province the strategy may have appeared less “sneaky” if the government had just been honest and up front about what was taking place. The case could have been made for the need for additional revenue instead of the appearance of trying to trick people into thinking it was about getting “spending back under control.” It has nothing to do with spending but rather taxing and increasing government revenue.

(Gillian Slade is a News reporter. To comment on this and other editorials, go to https://www.medicinehatnews.com/opinions, email her at gslade@medicinehatnews.com or call her at 403-528-8635.)

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