The Canadian Taxpayers Federation recently made some recommendations to Finance Minister Eric Cline regarding the upcoming provincial budget. Our main message is "It's Time To Tackle The Total Tax Take." By making the message alliterative, we hope to make it more memorable, because politicians often forget that there is only "one taxpayer" when they make their plans.

The income tax relief the government has been offering is welcome and very much needed, but much of the cost is being borne by property taxpayers because the province has off-loaded onto municipalities and school boards - forcing them to hike property taxes. Since 1985 property taxes have risen by almost 5% per year. In hard-pressed rural areas school taxes have risen by 56% since 1992. This tax relief shell game has to end.

There is also talk of increasing the PST in order to "pay for health care, etc." Saskatchewan people can't afford a tax hike, but a government that has tens of millions to spend on board plants, hamburger processors, and meat packing obviously can afford to cut low-priority spending. Here is what we told Finance Minister Cline about reducing taxes:

§ Do NOT increase the PST. The government should be looking for cost savings to cut taxes, not excuses to raise taxes. A PST increase will reduce vital economic activity.
§ More income tax relief. Provincial income taxes should be indexed to inflation (like other provinces and federal taxes), and the basic personal tax credit - the amount taxpayers earn tax-free each year - should increase to $10,000. Over three years the tax-free amount should increase to $12,000, and the tax brackets should be combined into a single rate of 11%.
§ Reduce school taxes by 40% over the next four years ($240 million), starting with a reduction of 10% this year ($60 million). We repeated our usual call for a comprehensive public review of the archaic property tax and school tax system to make it more flexible and fair. Maybe this year it will finally happen.

How do we pay for this tax relief Here is what we suggested to Minister Cline:

§ Set spending priorities. Reduce the budgets of all government departments (except the priority areas of Health, Education, Highways, and Agriculture) to 1998-99 levels. This will achieve savings of at least $200 million.
§ Make better use of Crown assets. Sell the necessary amount of Crown assets, including liquor stores, and open up ownership of the five commercial Crowns to private shareholders, with the goal of paying down the provincial debt and producing interest cost savings of at least $120 million over the next two years. These savings should be registered in a "Future Fund" account that is dedicated to funding schools and reducing school taxes.
§ No more Spudcos! A Business Subsidy Elimination Act should be enacted to put an end to direct government investment in private business.

The total tax burden for Saskatchewan people is about 25% heavier than the Canadian average (according to the Dominion Bond Rating Service). That is one indication of why we need to Tackle The Total Tax Take. There is no room to raise taxes in the upcoming budget, but there is room to reduce non-priority spending. Instead of trimming the fat in meat packing plants, our politicians should be trimming the fat in government.