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Why Albertans deserve a tax cut in 2005

Author: John Carpay 2004/12/30
The pre-tax income for the average Alberta family has grown 54% in eight years, but Alberta's politicians have hiked spending by 91% during the same period. In other words, the budget of Alberta's politicians is growing faster than the budgets of Alberta's households.

In the past eight years, Alberta's spending on government programs is up by an amazing 91%, rising from $12.7 billion in 1996 to $24.2 billion in 2004. When you consider Alberta's 15% population growth and 23% inflation during the past eight years, a 91% increase for the budgets of politicians is still huge.

In contrast to this 91% increase, the average Alberta household saw its pre-tax income rise from $51,900 in 1996 to $71,000 in 2002, and a projected $80,000 in 2004. Alberta families now earn 54% more than they did eight years ago, in contrast to Alberta politicians whose spending is up by 91%. When you factor in Alberta's population growth and inflation, this means the average family's earnings are up by 26% in real terms, while per-person spending on government programs is up by 34% in real terms.

This gap between 26% and 34% begs the question: if Albertans managed to make ends meet with a 26% increase in their pre-tax earnings, why couldn't our politicians have done likewise Why did they increase the size of government by 34%

If Alberta's politicians had increased their budgets in line with increases to household income, Albertans would be keeping an extra $1.5 billion in their pockets this year. Abolishing the $1,056-per-year health care premium tax plus half of the provincial property tax would be one way of cutting provincial taxes by $1.5 billion.

The politicians' never-ending greed for more revenues begs the question of who has a valid first claim to your earnings: you or the government

Income is earned because people work, buy, sell, farm, manufacture, invent, trade, invest, explore, develop resources, take risks, set up new businesses etc. Every day, millions of individuals make choices about what to buy, where to work, how to run their businesses, which new products to develop, which services to provide, and where to invest their money. Wealth is created by workers and managers, investors and businesses, buyers and sellers, inventors and manufacturers, all of them together making billions of voluntary decisions.

If government is our master, and we its servants, then government certainly has a valid first claim to all income earned by people. It would then follow that government has to "pay for" tax cuts which it can't "afford" because lower taxes "cost" too much. But if wealth belongs first to the Albertans who created it, then tax cuts cost nothing, are always affordable, and don't ever need to be paid for.

After hiking up program spending by 91% in eight short years, the Alberta government is still swimming in money as it enters 2005. Total tax revenues of $28.6 billion this fiscal year amount to almost $9,000 for every man, woman and child in Alberta, or $36,000 in provincial taxes for a family of four.

It's our money, we've earned it, and greedy politicians are taking too much of it to pay for a 91% increase in their budget. That's why Albertans deserve a tax cut in 2005.

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