Monday, July 16, 2007

Tax cuts and a *slight* correction...

Is Premier Stelmach ready to make some tax cuts?

According to Sunday's Calgary Sun, he's thinking about it (no link, sorry).

Now, as part of a Stampede sitdown gab with Premier Ed, the new provincialmain man is also talking about next spring's budget, which will likely include tax relief, including the province possibly matching Ottawa's $100 monthly cash for kids.

...

Ed says his tall foreheads are now looking at the implications of lowering the province's 10% flat tax rate or raising the amount of income you can make before beginning to pay Alberta taxes.

Either way this is good news.

While we would certainly favour broad-based income tax relief (like cutting the 10% rate or increasing the basic personal exemption) we wouldn't turn down $100 per child per month either.

But beyond either of these, it's the health care premium that has to go first.

In today's Calgary Sun, we say as much.

Correction: There's a slight problem with one of the quotes in today's Sun story, regarding numbers. When I'm ranting I occasionally talk a bit quick, so some reporters struggle to write as fast as I talk. But my last quote should probably read:

"Hennig said health-care premiums are $1,056 a year for a family, which can be a sizable amount for those struggling to make ends meet.

'At the $35,000 level, it's like a 4-point addition your income tax, whereas when you're making $135,000, it's maybe one or two points.' "

I was talking about how the health care premium is regressive and how on your after-tax income the health care premium is more if you have less income and less if you have more income.

Example:
Before-tax income: $35,000 [assuming a married single-wage earner family]
After-tax income: $29,000 [roughly]
% of their after-tax income that goes to Alberta health care premiums: 3.6%

Before-tax income: $135,000 [same assumptions]
After-tax income: $94,000 [roughly]
% of their after-tax income that goes to Alberta health care premiums: 1.1%

So, the original point I was trying to make was that an additional 4% (3.6%) of your income going to taxes is like a 40% increase in the 10% single-rate income tax here in Alberta.

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