$1,187,953,111 and counting… that is how much money Alberta could have collected since April 1, 2014 if the province had implemented a progressive income tax. Did you know that Alberta is the only province in Canada that has a flat rate income tax? This might come as a surprise to you. We often hear that as a province, we don’t have the money to pay for essential social services and poverty reduction initiatives that directly affect women. What options are there for the provincial government to increase revenue?
To answer this question, Public Interest Alberta is coordinating the Alberta Could Campaign to advocate for a progressive income tax and fair corporate taxes. This tax structure would give the provincial government a stable revenue to invest in important public services that benefit all Albertans.
What is flat rate income tax?
Since 2001, all taxpayers in Alberta, regardless of income bracket, pay the same provincial tax rate of 10 percent. This means that high-income Albertans pay less tax than other high-income Canadians and most low- and middle-income earners are actually paying more in income taxes than residents of BC and Ontario. For example, a person who makes $60,000 a year in Alberta will pay $1,000 more in income tax than if they lived in BC. Meanwhile, someone with a taxable income of $1 million would pay $41,000 less in Alberta than if they lived in BC. (Public Interest Alberta 2014).
Women in Alberta are disproportionately impacted by the flat tax as they earn only 68 percent as much as men. Low-income earners have very little expendable income after their basic needs are covered; however they are taxed at the same rate as high-income earners who have more expendable income.
What is progressive tax?
In a progressive tax system, used by every other Canadian province, the provincial tax rate varies based on a person’s income. Those with lower income levels pay a lower rate of provincial tax, and those with higher incomes pay a higher rate of income tax.
The Alberta Could Campaign proposes a Progressive Personal and Corporate Income Tax:
- 10% for taxable income between $0-$100,000 (95% of Albertans)
- 13% for taxable income between $100,000-$150,000 (3% of Albertans)
- 15% for taxable income above $150,000 (2% of Albertans)
- 12% Corporate Tax (for corporations with more than 50 employees)
What could progressive tax mean to women?
A progressive tax system would provide government with increased tax revenue, with more being contributed by those who can afford it. This tax revenue, in turn, can be re-invested into social services and poverty reduction.
What services could be funded with the increased revenue?
- Create more quality childcare spaces.
- Increase investment in healthcare.
- Implement recommendations of the Provincial Poverty Reduction Strategy.
- Support programs and policies that promote education and skills training in industries where women are traditionally underrepresented.
- Increase Family and Community Support Services (FCSS) funding.
What services would you like to see funded by increased revenue from progressive tax?
You can find more information about the Alberta Could campaign at albertacould.org.