Jack Mintz study touts revenue-neutral, 13 per cent sales tax for Alberta - Macleans.ca

Jack Mintz study touts revenue-neutral, 13 per cent sales tax for Alberta


CALGARY – A Calgary tax policy expert says Alberta should bring in an eight per cent sales tax and combine it with the five per cent GST.

Jack Mintz, from the School of Public Policy at the University of Calgary, said a 13 per cent harmonized sales tax could end up being revenue neutral for the province and make Alberta a more attractive place for business and investment.

He, along with co-author Philip Bazel, released a report Tuesday on the effects an HST could have on Alberta citizens, government revenue and the province’s business environment.

“Simplifying it is saying what we have is a proposal here that is not just introducing a sales tax. With the significant reduction in personal income taxes, most people are going to be taken off personal income-tax rolls under our proposal,” Mintz said.

Mintz said the proposal would include raising the personal income-tax exemption to $57,250 from $17,593 for each Alberta resident, more than making up for what Albertans would pay with an HST.

“Instead of 70 per cent of people paying personal income taxes in Alberta only 30 per cent of people would pay personal income taxes in Alberta,” said Mintz. “We would also introduce a low-income HST credit which would shelter low-income people from paying more tax.”

Corporate taxes could also be cut.

“The corporate income tax rate would be reduced from 10 to 8.43 per cent which would be the lowest in Canada.”

Mintz said Alberta is currently losing $800 million a year in taxes not being collected from tourists visiting the province and for non-residents who are working in Alberta but listing another province as home.

He said he understands that the idea of introducing a provincial sales tax, which Alberta has never had, will be a challenge to sell to the general public.

“I know people have this belief that it is such a great thing not having a provincial sales tax but we’re actually out of date. That’s an old concept,” he said.

“You go back to 1950 and there wasn’t a single value-added tax in the world and now over 140 countries have these things. It’s a very good source of revenue and stable.”

An HST was introduced in British Columbia, but proved hugely unpopular and was eliminated in a referendum in August 2011.

Mintz said it has had no problem in Ontario, where the HST is 13 per cent and in Atlantic Canada, where the rate is between 13 and 15 per cent.

Alberta’s Municipal Affairs Minister Doug Griffiths rejected the notion of having one in Alberta.

“It hasn’t come up once in a single solitary meeting,” he said Tuesday. “There has not been one discussion of a sales tax.”


Jack Mintz study touts revenue-neutral, 13 per cent sales tax for Alberta

  1. Listen to these socialists. “…$8 billion in a revenue neutral way.” Ha, ha, ha. Neutral to everyone except taxpayers! Their brains are in neutral. Just cut spending! The more you cut, the more taxpayers save.

    • Mintz is a right-wing economist…

    • If you reduce the income tax by a similar amount, it is revenue neutral. That’s what Mintz is talking about.

  2. Snirk, chortle….

  3. This is exactly the right thing to do. An 8% VAT harmonized with the GST could replace most of the income tax revenue AB currently brings in. They could increase the basic examption – already the highest in the country, to at least $30,000, and slash the 10% income tax rate at least in half, and possibly lower. Of course it makes too much sense and will therefore never happen.

    • Actually, I see what Mintz is proposing is raising the personal exemption up to $57,000, and leaving the rate at 10%. That is also a good suggestion. Personally I’d prefer to see the exemption somewhat lower, and the rate reduced. IN any case, I don’t live there, so I’ve got no stake in it. And since it will never happen anyway, as people will resist change for the sake of resisting it, it’s all moot.

  4. Once again, with Mr. Mintz, bullshit is expected to baffle brains. His eloquent, but highly misleading, posturing around BC’s HST led to its eventually being repealed here.

  5. when Ontario brought in HST I personally never saw my income tax refund change at all, all I saw was I had to pay 8% more for everything I bought at a store….

    • What? You didn’t pay the 8% PST before? And the bottom income tax rate did fall from 6.05% to 5.05%. If people are this unobservant, it’s no wonder any attempt at tax reform fails.

      • when the final tally is done there is VERY LITTLE difference in the personal exemption or the refund one receives. I lived the experience and have the paperwork to back up my facts, you do not. You don’t even live in Ontario so why are you even commenting when you weren’t here to experience the change to HST? The biggest difference is how much MORE one pays for goods and services after the HST was brought in.

        • I live in Ottawa. I have lived here for almost a decade. I could have sworn Ottawa was in Ontario, but I’ll check the map just to be sure. I also work in the tax field, so I am more than aware of how Ontario income taxes and sales taxes work.

          You want facts to back up what I’m saying? The facts are already in your possession. Take a look at your ON428 tax forms from 2009 and 2010. Go to Step 2 on Page 2. There, you can see the Ontario income tax brackets. Now here’s the hard part: In 2009, the bottom tax rate was 6,05%. In 2010, it was reduced to 5.05%. If you’re comparing refunds from one year to the next, it is no wonder you don’t notice anything. Refunds are affected by all kinds of factors from year to year.
          As for prices, we paid 8% PST and 5% GST until the HST was brought in. Now we pay 13% HST. 5 + 8 = 13. The only things that went up noticably were gasoline, utilities, and the handful of services that were previously PST-exempt. Everything else had the 8% PST applied to it anyway.

          • you’re mixing fact with opinion and your logic is flawed but i don’t really care. I know I am right, you are wrong. end of discussion.

  6. Just another break for Oil

  7. Taking more money from most people and giving it away to those who already pay less is not “revenue neutral”.

    It’s classic socialist tax-and-spend.

    Better to have just a 5% add-on to the GST and no fiddling with tax rates.

  8. At least he’s not talking about a separate PST, with separate provincial administration.

    The cost of administering a 13% GST is trivially higher than the cost for a 5% GST.

  9. Conservative tax and spend

  10. Here is a novel idea: reduce government spending! Leave Alberta alone. We pay enough taxes and don’t need more.