Calgary Tax System

[DizzyEdge]

I'm not too knowledgeable in this area, but I alway here the lament that the inner city pays for the burbs, old folks have to move out of their homes cause they can't afford the high taxes, etc etc etc.
Is the system broken? Is there a better way to change the ratio? Should the burbs pay more? How much?

[1ajs]

Originally Posted by DizzyEdge

I'm not too knowledgeable in this area, but I alway here the lament that the inner city pays for the burbs, old folks have to move out of their homes cause they can't afford the high taxes, etc etc etc.
Is the system broken? Is there a better way to change the ratio? Should the burbs pay more? How much?

i know in winnipeg the burbs subsidize the core
in calgary i think is flat. basicaly its based on what your home is worth and how close you are to lrt ect

[DizzyEdge]

It typically is flat here, however the argument usually goes that there's so much infrastructure cost for a new communinity, so taxes overall go up, and due to high property values in the inner city, those owners pay more of the bill. I'm wondering if you should pay more based on how much your land costs to service, vs the value of the lot?

[1ajs]

Originally Posted by DizzyEdge

It typically is flat here, however the argument usually goes that there's so much infrastructure cost for a new communinity, so taxes overall go up, and due to high property values in the inner city, those owners pay more of the bill. I'm wondering if you should pay more based on how much your land costs to service, vs the value of the lot?

f your land is worth more then you should pay taxs on that fair market value simple as that...

and new construction thats what all the levy's are for....

i'm going of memory from a conversation in calgary construction from 2006.... lol

[Boris2k7]

Originally Posted by 1ajs

f your land is worth more then you should pay taxs on that fair market value simple as that...

and new construction thats what all the levy's are for....

i'm going of memory from a conversation in calgary construction from 2006.... lol

No, no, no, that's not the way to do it. That's what we have right now. It sucks because all the core areas of the city are uber-expensive

Taxes need to be based on land usage, not property value. A person living in a 700sqft condo on top of a 20 story building should be paying way, way less than a person in a 2000sqft home in the burbs. It would also protect existing landowners from rapid increases in their taxes, which could really help with our aging population.

[chenmau]

What about paying based on lot size?

[DizzyEdge]

That's generally the idea I like, the only thing that might complicate it is when you demo a house in the inner city and build a condo, you likely need upgraded services to the site, or does the developer pay the city for that?

[freeweed]

Originally Posted by Boris550

Taxes need to be based on land usage, not property value.

Bingo. Not land value, this makes far-flung houses on crappy land attractive. Not lot size, this mucks with the true cost of servicing high-rise buildings.

Base the damn thing on what it actually COSTS to service it. Roads, water, hydro, sewer, you name it. Work out some sort of approximate cost based on lot size and usage combined.

Of course, basing taxes off of what a person actually USES in return is contrary to most of our existing tax system - else unhealthy people would pay a lot more for healthcare, and frequently unemployed people would pay far more in UI premiums. Imagine non-smokers getting an income tax break. Or childless couples paying nearly nothing in education tax.

The rest of the world would disagree with me, but I'm all for a user-fee driven (or at least weighted) system. And property taxes are the FIRST thing we should run this way.

[DizzyEdge]

You brought up 3 interesting cases:
Land Use - Property taxes
Non smokers - Health Care premiums
Childless couples - Education tax

I would say go more user fee for the first 2, but not the last, why? Because it's in society's interest to make better use of land, and have people not smoke, but it's not in society's interest for couples to have less kids (well perhaps that's up for debate

I like the idea of bonuses for people who do right

So it's not that people in the burbs would get a penalty, it's that they wouldn't be able to take advantages of bonuses for being efficient with the land use.. although in a way it's all kinda the same thing.

[freeweed]

Originally Posted by DizzyEdge

it's not in society's interest for couples to have less kids (well perhaps that's up for debate

It's very much up for debate. One of the biggest generators of sprawl is the fact that our population keeps growing and growing and growing. Just as it's valid to say our cities cannot sustainably grow outwards forever, our population cannot also sustainably increase forever. It could be argued that we're at the point where we should be aiming for zero population growth. Of course, what this does to the economy is another matter, especially when you look at the demographic shift such as the Boomer retirement about to happen.

Personally, as a childless person I'm all for paying education taxes - it is definitely in society's best interest to keep these kids educated, and it's not like people will stop breeding simply because school costs more. They'll just have the kids, and we'll end up with a huge uneducated society. Not good for anyone, really.

There's a big difference between trying to modify people's behaviour through government policy (tax breaks for non-smokers), and using government policy to improve society as a whole (forcing everyone to pay education tax). I'm generally for the latter and not much of a fan of the former. Distinguishing between the two is a lifelong philosophical game, however.

[yads]

Taxing people based on user fees is virtually impossible. How do you determine how many city services a resident actually uses? Are we saying that every inner city resident uses less city resources than every suburban dweller?

[dubiousmike]

Originally Posted by yads

Taxing people based on user fees is virtually impossible. How do you determine how many city services a resident actually uses? Are we saying that every inner city resident uses less city resources than every suburban dweller?

Gas meters, electrical meters, water meters, traffic counters.

edit: Also, we should take into account the capital costs of building infrastructure into suburban communities.

And yes, suburbanities are a far greater strain on infrastructure (per capita) than urbanites. I feel pretty comfortable saying that, but it's nevertheless anecdotal. I'm hoping someone out there has hard data.

Someone?


edit: I should have been clearer. You're right, a user-pay system would be impossible to administer, but there are far better ways to calculate property taxes based on actual infrastructure use.

[DizzyEdge]

Originally Posted by freeweed

It's very much up for debate. One of the biggest generators of sprawl is the fact that our population keeps growing and growing and growing. Just as it's valid to say our cities cannot sustainably grow outwards forever, our population cannot also sustainably increase forever. It could be argued that we're at the point where we should be aiming for zero population growth. Of course, what this does to the economy is another matter, especially when you look at the demographic shift such as the Boomer retirement about to happen.

Unfortunately with so many companies owned by shareholders that demand growth and expansion, tidy profits not being enough, a shrinkage in population will stifle it as you mentioned.

[DizzyEdge]

Originally Posted by yads

Taxing people based on user fees is virtually impossible. How do you determine how many city services a resident actually uses? Are we saying that every inner city resident uses less city resources than every suburban dweller?

I believe the idea was infrastructure, not services per se.

[jawagord]

You have restarted an old debate. But a short version is the tax system in Calgary was overhauled 4-5 years ago to install fairness into the system so I do not see them changing it again anytime soon.

[Boris2k7]

Originally Posted by jawagord

You have restarted an old debate. But a short version is the tax system in Calgary was overhauled 4-5 years ago to install fairness into the system so I do not see them changing it again anytime soon.

You can hardly call the current system fair...

[freeweed]

Originally Posted by yads

Taxing people based on user fees is virtually impossible. How do you determine how many city services a resident actually uses?

I guess I wasn't clear. I didn't mean a user fee in the sense that you get an itemized bill for JUST YOU at the end of the year.

I was thinking more in the aggregate sense - ie: if you live in an area well-serviced by transit, you'd pay more. If you live way out in the boons, and therefore rely on a larger road infrastructure, you pay more. That sort of thing.

Not that I am necessarily advocating this, mind you. It's one way to treat things fairly - and boy, would I pay comparatively nothing in taxes if we actually ran all of society like this.

[DizzyEdge]

Originally Posted by freeweed

I guess I wasn't clear. I didn't mean a user fee in the sense that you get an itemized bill for JUST YOU at the end of the year.

I was thinking more in the aggregate sense - ie: if you live in an area well-serviced by transit, you'd pay more. If you live way out in the boons, and therefore rely on a larger road infrastructure, you pay more. That sort of thing.

Not that I am necessarily advocating this, mind you. It's one way to treat things fairly - and boy, would I pay comparatively nothing in taxes if we actually ran all of society like this.

I think it's a great idea, but imagine the commotion of the whole tax system was overhauled in this manner! It would probably need to be something where slowly the city does the process gradually over a decade or something.

[lubicon]

While I agree with the present market value tax assement regime we have, perhaps the City could look at ways to minimize the impact of rapidly rising property values on fixed income earners (eg the elderly). Why not cap the yearly rise at some fixed value (say the inflation rate for instance) and then defer the remainder until the home is sold at which time the city would recoup the rest. It would help out the ficed income earners, the city would not really be out that much $$$ on a yearly basis, they would get their money eventually, and when a prpoerty is sold the new owners would start paying the current rate.

[Bassic Lab]

I'm not really sure if a change would really be for the better. As it is developers typically pay for the initial infrastructure in both new single family neighborhoods and high sensity infill projects, so it isn't like the inner city is really subsidizing sprawl, which very much was the case twenty years ago. As is can you imagine the effects of a lot size tax on older working class and lower class communities. People in Forest Lawn would never be able to pay a rate comparable to Mount Royal, especially if the rate increased to cover reduced taxes on multifamily developments. Property values would crumble in Forest Lawn and we'd end up with permanent ghettos in formerly working class communities. A tax on property value on the other hand is atleast fair on an ability to pay basis.

On the other hand I could agree with some form of lifestyle tax to influence people away from larger lots and towards a more sustainable manner of living. It just would have to be done in a manner that doesn't hammer the poor.