CALGARY, Alberta, July 20, 2021 (GLOBE NEWSWIRE) – The Government of Alberta could reinstate personal income tax at a 10% rate and restore “Alberta Tax Advantage” while incurring a loss. modest revenue, a new study published today by the Fraser Institute, an independent, nonpartisan Canadian public policy think tank.
Professor Ergete Ferede said: “If the Alberta government reinstates a flat 10% tax rate, the next increase in economic activity will include increased start-ups, more business startups and investment levels. higher, would help mitigate a relatively modest loss in tax revenue. economics at MacEwan University, senior fellow at the Fraser Institute and author of What if Alberta reverts to a Fixed Tax System?
The Government of Alberta in 2015 replaced the province’s single 10% personal income tax — also known as a flat tax — with a “progressive” tax system that now includes five different tax rates and The highest tax rate is 15%.
According to the study, if Alberta gradually reinstated its income tax rate of 10% over four years, the provincial government would collect about $16 million less in personal income taxes in the first year after the reform. . At the end of the fourth year, the personal income tax loss will total about $1.36 billion — or about 9% less revenue than the current forecast.
However, the tax reduction would likely increase economic activity in the province, which in turn could help offset the loss of tax revenue.
“By restoring Alberta’s Tax Advantage, the government can help stimulate economic activity, which will increase the well-being of Albertans during the COVID recovery and beyond,” said Ferede.
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The Fraser Institute is an independent Canadian public policy research and education institution with offices in Vancouver, Calgary, Toronto and Montreal and ties to a global network of researchers in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by researching, measuring, and widely communicating the impact of government policies, entrepreneurship and their choices for happiness. To protect the Institute’s independence, the Institute does not accept government grants or contracts for research. Visit www.fraserinsnge.org
https://financialpost.com/globe-newswire/fraser-institute-news-release-alberta-can-regain-tax-advantage-by-reinstating-10-flat-tax | Fraser Institute Newsletter: Alberta can regain tax advantage by reinstating flat 10% tax rate