AB won't send energy windfall to rest of Canada

[sutherland]

I paid about $2500 to my friendly Albertan government last year and now, out of the goodness of their hearts, they're going to give me $400 back.  Misguided alturism at best as I said before, but it is still a tax refund and I have serious problems with ANYONE trying to "tax" a rebate of taxes that were already paid!

Are EI and CPP benefits refunds of taxes paid? Hardly. They are benefits paid by government and they are taxable. You could argue that they were a tax refund if they went only to people who paid taxes and that the 'refund' could not exceed the amount of tax payable. However, the checks go to all people regardless of the amount of tax actually paid. For that reason, the $400 is clearly a government benefit and potentially taxable.

That said, Martin may make a political decision to forego the tax on these monies, however, that would mean that the federal gov't is giving Albertan's a special deal on taxes and the implications for other provinces could be huge.

<{POST_SNAPBACK}>

Well, you and I both ought to know that "taxable income" is whatever definition suits the federal government. So continuing an argument over what should constitute taxable income is pointless.

As I said originally, the rebate program as it stands now is a bad idea, not least because people outside Alberta are now dreaming up ways to change the definition of "income" just so they can grab an undeserved piece of the pie. To be frank, the Albertan government and in particular Klein are fools for gifting the ROC such an opportunity to grab another $300-odd million of our money.

A much more sensible move would have been to cut the income tax rate by two percentage points (to eight percent). And for the extra benefit of low income earners, the government could double the basic exemption to $25,000. That would be about the same cost as the Prosperity Bonus. And there would be no way the federal government could legitimately try to take a piece of a province's tax cut - it would just be less tax paid in the first place.

I would hope that if Martin were to try to tax the Prosperity Bonus money then Klein might be sensible enough to realize his mistake, end the bonus scheme and just cut taxes. That would end the issue.

[theloniusfleabag]

Dear Sparhawk,

That said, Martin may make a political decision to forego the tax on these monies, however, that would mean that the federal gov't is giving Albertan's a special deal on taxes and the implications for other provinces could be huge.

In this case, at this point in time, no other province is in a position to contemplate such problem.

Perhaps one day Cod Liver Oil may overtake Crude in price per barrel, but it may be a while. I'll bet we'll see the 'second coming' first. (btw, why won't anybody admit it takes men longer to come the second time around?)

[Riverwind]

That said, Martin may make a political decision to forego the tax on these monies, however, that would mean that the federal gov't is giving Albertan's a special deal on taxes and the implications for other provinces could be huge.

In this case, at this point in time, no other province is in a position to contemplate such problem.

I was thinking of opportunities for creative accounting that could be used to transfer federal tax into provincial coffers.

[mcqueen625]

And why would he. That money was earned by Alberta not the rest of Canada, so why should they share. Martin just signed onto deals with Newfoundland and Nova Scotia whereby they do not have to share their oil wealth, and they even get to keep their share of equalization grants, which is not fair to provinces like NB and PEI, and the other so-called have-not provinces. I never believed that Quebec was a have-not province, especailly since they keep talking as if they could survive on their own. If they can survive on their own, why are they continually asking for more and more from Ottawa, and getting it, along with equalization payments.

If I were an Albertan I would be encouraging Ralph to have a referendum to separate from Canada before Ottawa attempts another raid on their treasury, like happened in the 70's under Trudeau. I would put nothing past Martin and his Cabinet, and I'm sure that Layton would go along with anything Martin proposes.