Saturday, October 31, 2009

My Stop the Cuts letter.

Dear Brian Mason, Minister Hancock and Premier Stelmach:

Albertans have sacrificed and worked hard over the past fifteen years to help eradicate our provincial debt. They did so because they knew that future payments on that debt would pose a risk to the quality of services the Alberta government provided in the future.

Now that Alberta is debt free and has gone through a significant boom, we expect that Alberta will have the highest quality public services in the country. We deserve it.

Reacting to plummeting energy prices by slashing funding will only jeopardize our future prosperity.

Our long term prosperity is dependent on developing creative and critical thinkers who are committed to working together to solve the problems of society. The only way to build that citizenry, is through a world class public education system, where students have the supports and opportunities to develop to their full potential.

Education funding cuts puts that future at risk! Now is the time to make the wise investments, the ones that will pay off for years to come. The future is so uncertain - we need to do everything possible to ensure that Alberta is ready for it.

As a concerned Albertan, I urge you not to cut funding for our schools.


Jonathan Teghtmeyer

If you care about the future of education in Alberta, and the future of Alberta in general. Take 5 minutes and send your own message at

Tuesday, October 27, 2009

Just for Scott Hennig

Canadian Taxpayers Federation does a good job looking out for Alberta's elite. The Alberta Director Scott Hennig, told me on Twitter that Alberta has progressive taxation:

scotthennig @atypicalalbertn But we already have progressive taxation, thanks to the Basic Personal Exemption

Let's be honest Scott, it looks pretty flat to me:

Save the economy - get rid of the flat tax

In my post yesterday, I examined provincial personal income taxes for a variety of income earners. I realise now that I wasn't clear on my main thesis.

The primary point I wanted to make is that flat tax systems extraordinarily benefit high income earners - and do so at the expense of middle class workers.

My analysis showed that an Albertan earning $40,000 pays 40% more in income tax than her counterpart in British Columbia. At the same time, the Albertan making $200,000 pays 18% less than a similar west-coaster.

But let's also keep in mind two important considerations.

Dollar for dollar, that high income earner is saving $4,000 out of his $200,000 while the low income earner is paying an extra $700 out of $40,000. Who do you think notices that difference more?

Secondly, my calculations do not include deductions. How much tax do you think that $40,000 earner is deducting because of RRSPs, political contributions or investment dividends? Now, how much do you think that $200,000 earner is deducting?

But, more importantly let's think about the impact on the economy. Plain and simple, economic activity is generated by spending. The healthiest thing for us, economically speaking, is to have people spend money and to have them spend it locally. By injecting cash into the local economy, local people have jobs - local people with jobs means more people spending money locally.

Cash in the hands of working people gets cycled around the economy and spent over and over and over again - generating economic activity.

Cash in the hands of the wealthy doesn't get spent as much. A greater percentage of their money is saved or invested - removed from the local economy.

It makes much more sense to shift the tax burden from the working class and move it towards the wealthy. First off, they can afford it more and secondly they will benefit indirectly from the economic activity generated by the spending of the working class - whether its because of bonusses, businesses or returns on investments.

It's time that Alberta got rid of the flat tax, for the benefit of all of us.

Monday, October 26, 2009

Debunking the low taxes myth.

Albertan premiers have for a long time convinced Albertans that Alberta is the tax haven of North America. The last guy we had loved to talk about the Alberta advantage. The new guy wants us to think we have the freedom to achieve and tells us things like, "we have very low tax rates for people working in the province."

Either one of two things are happening for Premier Stelmach: he is trying to mislead us or he has no sense of what "working" people make.
He must not be talking about people who make between 30 and 80 thousand dollars a year. Because they could move to BC or Ontario and pay less in taxes.

This graph shows the amount of provincial personal income tax paid in 2008 by someone making $30,000, $50,000 and $70,000 of taxable income. If you're making $40,000 in Alberta you would pay $2,383.90 or 6% of your income to the province. Meanwhile, in BC you would be paying 4.2% and in Ontario you're paying 5%. (All data is calculated from Revenue Canada tax returns with only the personal deduction claimed)

In fact, as income levels rise, Albertans pay more tax than Ontarians until they start making $80,000. British Colombians save on taxes until they start making over $120,000.

The main reason for this, of course, is that Alberta has a flat income tax rate, while BC and Ontario have progressive tax rates. In fact, Alberta is the only province (and one of only a few jurisdictions) to have a flat tax.

We have it because we were duped.

In 2001 King Ralph moved Alberta to a flat tax and combined it with a tax cut. We bought the idea of a flat tax, because we liked the tax cut that happened to come with it. In actuality, the ones who really save with flat taxes are the wealthy.

To further support my claim that Alberta has revenue issues, this chart shows the 2008 personal income tax paid in 6 provinces, depending upon a person's taxable income.
In all of the other provinces as an individual's income level rises, the proportion taken for provincial taxes also rises. Except for Alberta, represented by the blue line, where the more you make the more you save.

There is an Alberta advantage alright - it's just felt most by those people who make the most money. Here are the tax levels for people earning $150,000 and $200,000 in the various provinces:
So while the Albertan making $40,000 is paying $693 a year more in taxes than his counterpart in BC, the Albertan who makes $200,000 is saving $3,874.
This provides for me two interesting alternatives. We could cut taxes for 6 Albertans by raising taxes on one siginificantly wealthier Albertan with no affect on the treasury. Or we could tax him at a level that all of the other provinces deem to be fair and save our public services.

Tuesday, October 20, 2009

Inspiring Education and religious fanatics: not what you might expect.

So, I come to my computer this evening to make a post, after a fair hiatus, about Inspiring Education. Rusty to the process, I mistype the address into the explorer bar and end up at It didn't take me long to determine that I would have to include my stumble onto this site as part of my post. But I'll get there later...

Now, anyone who was at The Inspiring Education Fall Forum knows that Bridget Ryan has the uncanny ability to use every conjugation of Inspire known to man. And, they also know where education should go over the next 20 years.

The big question is, how will we reconcile the fact that everyone leaving Northlands today had a slightly different image of that future?

First off, the team and everyone involved needs huge commendations for putting together an incredible environment where Albertans could get hopeful about our future and the potential we have as a society. It was about building the society of our dreams by ensuring that our children grow to their greatest potential. It was inspiring and there were some fabulous things said.

But we need to be clear, there was no synthesis of ideas from table to table and there were no ratifications of ideas or suggestions. There was no collective voice of Inspiring Education developed.

This is not a criticism of the process, it is merely an observation of the outputs. An important observation.

Over the next few months we are going to be in the process of rewriting the legislation that oversees education in Alberta. There is going to be a great deal of talk about what the system should look like and who should be doing what and how they should do it.

Beware the advocate who says that "Inspiring Education told us ___________."

Even (or perhaps especially) if that person is from the Government of Alberta or, for that matter, the Alberta Teachers' Association.

As valuable, authentic and informative as the process was, it was not a decision making body and it wasn't a referendum on policies - and that is exactly how it was intended. Government is not about to allow itself to be fenced in by what Inspiring Education said, and therefore nobody should be able to use it as a mantle to hang their own biases or agendas.

In the end, the process did exactly what it should. It gave people an opportunity to dust off their binoculars and peer into that perfect world down the road and to feel confident talking about what their vision for education in Alberta is, which is what these next few months are all about.

We need this dialogue and the government still needs to hear your thoughts, because some one needs to counter the more radical points of view out there.