Enterprise Saskatchewan wants to boldly go where this province has never gone before. The idea is simple: tax personal and business income at ten per cent, regardless of how much income is earned.

The concept of a low and single rate of taxation has been gaining speed over the past few decades. Most recently, former Soviet states adopted single rates of tax, also known as flat taxes. Estonia led the way with a 20 per cent tax in 1994. Roughly 20 nations have followed in the years since.

Closer to home, Albertans got on the single-rate tax bandwagon in 2001 when the province implemented a 10 per cent rate. Some may have seen this as a risky move since Ralph Klein’s mission to eliminate Alberta’s debt was still far from complete. As it turned out, debt repayment only increased under lower taxation. Moreover, year after year, thousands from Saskatchewan and elsewhere poured in to benefit from the “Alberta advantage.”

After eight years of progress on both personal and corporate tax rates, Saskatchewan may finally be able to catch up. Alberta is spending recklessly and is strongly considering increasing taxes to balance the books. Meanwhile, Saskatchewan is paying-off debt, and, by keeping consistent royalty rates for oil, has become a far preferable jurisdiction for drilling. The move to match Alberta’s ten per cent personal and business tax rates will only keep this momentum going.

What Enterprise Saskatchewan suggests is that the province continue to reduce taxes, lowering business and personal tax rates to ten per cent over the next three years. The agency’s recently released annual report says that their motivation is to entice people to live and work in Saskatchewan. Lower tax rates will also give current residents more disposable income to save, invest or open a business.

Enterprise Saskatchewan expects government revenues will actually increase under the plan due to the economic stimulus created by these tax breaks. Although some will suggest this concept seems counter-intuitive, the province’s recent history confirms it. Saskatchewan’s business tax revenues were less in 2005 than they were in 2008 even though the rates had dropped by five per cent.

Some argue that a universal ten per cent rate would mean the rich won‘t pay their share. Of course, this is not true because effective rates are actually progressive for all incomes, thanks to the basic personal exemption of $13,269.

Consider: under a ten per cent rate of taxation, someone earning $20,000 would pay $673 in provincial income tax, just 3.4 per cent of total income. A wage earner of $40,000 would pay $2,673 for an effective tax rate of 6.7 per cent. At $100,000 of income, $8,673 would be taxed, an effective rate of 8.7 per cent. Does this sound like the rich not paying their share?

Saskatchewan cannot afford to stand still. British Columbia’s already low business and personal income taxes have been dropping, with plans to go further whenever the economic climate allows. Manitoba also dropped their business tax on July 1, matching Saskatchewan’s rate of 12 per cent. And New Brunswick has plans to drop their business tax to eight per cent by 2012, the lowest in the country.

Now that our province has become an economic hot spot, will we seize this time to be best in the west or float in mediocrity? The choice rests with the provincial cabinet. But clearly they’ve been given good advice. As ideas go, a lower and single rate of tax is a perfect ten.