The economy and budgets

 

Word is that Alberta’s economy is on the upward swing. There are some who haven’t felt the effect (other than the very high price for gasoline) but that doesn’t mean it isn’t true.  In fact, there is a lot of activity in the oil patch just to the west of us in Fox creek.

A lot of people who don’t know, or maybe who just don’t want to know, blame the downturn on the NDP. While they have a small part in it, mostly it is the low price for oil and natural gas and the lack of pipelines to tidewater.

The NDP has run up debt as the party tries to fix some of the deficiencies of former governments. Past governments have postponed infrastructure work in order to balance their budgets. This just puts the debt on the backs of our children and future generations.  Some people would like to continue doing that.

Other political parties have suggested that this work should be done when the economy is booming. However, that costs us taxpayers a lot more because materials and labour costs are a lot higher then. The solution would be to put aside money when the economy is booming (something the PCs didn’t do) and then spend it when times are bad (sort of like now).  This gives us taxpayers more bang for our buck as well as helping to stimulate the economy.

But here’s the thing: economists (real economists) have shown us that if we had the same tax structure as BC or paid the same as BC for services we wouldn’t even have a debt, that we could balance our budgets. Let’s look at these two options.

Ralph Klein sort of did the latter. He had government employees take a wage cut. However, he continued to give tax breaks to large corporations and the wealthy. For instance, in personal taxes, he cut the upper two tax brackets from about 11.5 per cent and 12.5 per cent to 10 per cent.  At the same time, he increased the lower two brackets from about seven per cent and nine and a half per cent to 10 per cent. Then after balancing the budgets, in part by dumping more burden on municipalities and cutting budgets, especially infrastructure, he went back to the way things had been before which led to more deficits and wasted tax dollars.

So, if we were to ask our public servants, including MLAs, to take decreased wages and/or benefits, we also owe it to them to spend those savings more wisely.

As far as tax structure, BC has a sales tax. BC also has a graduated personal tax system similar to what AB had before Ralph helped the wealthy at the cost of the poor. For instance, if your taxable income is less than approximately $60,000 a year, you pay more taxes in Alberta than in BC. Over $80,000 and you pay more taxes in BC than AB.

Everyone thinks a sales tax is absolutely taboo but if you go to any other province or most states, you help their economies by paying their sales taxes. They don’t help us because we don’t have a sales tax. Just saying.

There is more to it all than just this but these are the most obvious differences. What I’m mostly saying is that there are at least two ways we could balance our budgets and still pay for our infrastructure deficits instead of continuing to pass them on to future generations.

Sometimes if we want things to change for the better, we have to make some changes, too.

Eugene Eklund

Whitecourt, AB