Fear and Loathing in Alberta (Over the PST)

My latest Calgary Herald column looks at the merits of shifting away from taxing income and toward taxing consumption and why it is that Alberta politicians are so afraid to make the case:

For what it's worth, I believe Premier Alison Redford when she says the March  7 budget won't usher in a provincial sales tax.
The premier seems to be growing frustrated over the repeated questions about  the possibility of a PST at some point in the future. Last week, when asked the  question, Redford snapped, "Did I say it on Tuesday? Did I say it on Friday?  We're not introducing a provincial sales tax, period. I'll say it again tomorrow  if you'd like."
If that was the only time you've been exposed to the premier's response to  the question, you'd probably wonder why there was any ambiguity - she sounds  pretty unequivocal. But in the very same scrum with reporters, Redford refused  once again to close the door all the way.
When asked if she had any intention of introducing a PST during her term as  premier - in other words, beyond the upcoming budget - Redford simply replied,  "I don't see that there's a reason for that."
If the premier is growing exasperated over having to answer the same question  time and time again, she might want to think about her responses. For example,  "not now, not ever," might be an effective way of responding if the goal is to  leave no doubt, thus precluding any future questions on the matter.
Redford was just as vague last month when she hosted a teleconference with PC  party members.
When the topic of a PST came up, Redford had an easy opportunity to close the  door on any suggestion that she might be inclined to bring one in.
Instead, she offered this, "It's been a really important part of the  conversation that I think Albertans have started to have . . .
And I think there's a place for that conversation."
Compounding the situation is the fact that the recent Alberta Economic Summit  featured numerous speakers making the case in favour of a PST.
Given that the premier's office was directly in control of the invitations  for that summit, it's not unreasonable to wonder if that was by design.
But the biggest reason for the uncertainty around the premier's position is  that she has simply failed to articulate one. The premier has certainly  indicated an unwillingness to implement a PST, but we have no idea if that's  because she thinks a PST is bad policy, or that she is simply afraid of the  political repercussions.
If it's the latter, the premier has good reason to be afraid. A poll released  last week shows that almost three-quarters of Albertans oppose a PST and  approximately the same number oppose any move to change the law requiring a  referendum on the matter.
If it's the case that the premier and other Alberta politicians would support  a sales tax if it was politically safe to do so, then it suggests we're being  ruled by political cowards who would rather chase the polls than try to shape  them.
In a perfect world, we'd all support a PST - the debate would be between  adding a PST to the status quo and reducing other taxes to make way for a PST.  It's unfortunately the case that policy is not always guided by the best  evidence, but perhaps nowhere is that more evident than the approach in Alberta  to sales taxes.
There is a considerable body of evidence indicating that consumption taxes  are both the most efficient and least damaging forms of taxation. It should not  follow that it is also the least popular. In fact, many brag about Alberta being  sales-tax free (forgetting that we pay the GST), as though that confers upon us  some sort of advantage.
To cite just one example, University of Alberta economists Bev Dahlby and  Ergete Ferede recently demonstrated that lowering the corporate tax rate from 10  to five per cent and introducing a five per cent harmonized sales tax (HST)  would produce a per-capita economic gain of $19,300.
Redford is right to say that there is a place for this conversation. Her  cynical approach to the issue and her failure to explain her position to  Albertans help to ensure that a real conversation remains as elusive as  ever.