Premier Klein mused earlier this week about giving Albertans some of their own money back in the form of "rebates" to ease the pain of high gas prices.

But less than two months ago, Premier Klein introduced a budget which left in place most of the tax increases he imposed in 2002. Letting Albertans keep more of their own earnings is obviously not Premier Klein's priority.

So what's wrong with rebates Don't rebates put money back in Albertans' pockets

It's true that rebates let Albertans make their own choices about what to do with their own money: save more, invest more, give more to charity, or spend more. That's better than having politicians and bureaucrats decide, because nobody spends someone else's money as wisely as he spends his own money. If the choice is between letting an Albertan keep $100 of his own money or giving an additional $100 to politicians, the former is better.

Premier Klein, his government swimming in Albertans' money, can easily cut taxes. Albertans need more money in their own pockets, to deal with high fuel prices and other challenges which life throws our way.

Tax cuts are better than rebates for three reasons.

First, rebates invariably result in political manipulation, because it's politicians who decide the size of the rebate, how long it will run for, who will get it, and when the next election will be called. Rebates may run for a month or two or three, or not until next year . . . only the politicians know. Rebates can be distributed unfairly. For example, in 2001 some Alberta families with teenagers working part-time jobs received several rebate cheques, bearing no relation to the cost of heating a single home.

Second, lower taxes provide a predictable basis on which individuals, families, investors, and businesses can base their financial decisions. Businesses, investors and consumers look at tax rates when they make their decisions and set down their budgets. But rebates, being temporary and political, do not provide a foundation for investment, job creation, and business expansion. Rebates don't empower families to make lasting decisions to increase their saving, spending or charitable giving. Rebates don't help businesses to expand, take risks, or hire more people. Only tax cuts will do that.

Third, rebates are costly to administer. In contrast, reducing taxes does not create any new administration costs. Abolishing the health care premium tax would save the Alberta government $13 million per year in administrative costs - enough money to purchase four MRI machines. In short, lower taxes mean less bureaucracy, but rebates require more bureaucracy.

If Premier Klein's only choice was between letting Albertans spend rebates or letting tax dollars be spent by politicians and bureaucrats, the former would be better than the latter.

But there is a better way to empower Albertans to cope with high gas prices and other challenges: lower taxes so Albertans keep more of their own hard-earned money. Not only will this help us fill up our tanks with gas, but it will enhance Alberta's economic advantage as we compete for investment and jobs in a global economy.