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  #1  
Old Posted Sep 28, 2011, 3:16 AM
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Local GST hike proposed to help pay for infrastructure

A local business man is proposing a local 1% increase to pay for infrastructure. He claims it would add $350 million a year to the budget.

http://www.cbc.ca/news/canada/calgar...penny-tax.html

I think it's an interesting idea, and would consider supporting it, but I would rather see a provincial policy on allowing cities to keep more tax revenue like Nenshi is proposing.

What do you think?
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  #2  
Old Posted Sep 28, 2011, 3:35 AM
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Originally Posted by Calgarian View Post
A local business man is proposing a local 1% increase to pay for infrastructure. He claims it would add $350 million a year to the budget.

http://www.cbc.ca/news/canada/calgar...penny-tax.html

I think it's an interesting idea, and would consider supporting it, but I would rather see a provincial policy on allowing cities to keep more tax revenue like Nenshi is proposing.

What do you think?
I wouldn't drive out to Cross Iron Mills just to save 1%, but I'd be curious relatively how much business might want to locate just outside of city boundaries. I could see this being a problem particularly for big ticket items like autos, where there is the potential to save 100's of dollars. I think Calgary has proven itself to be a good steward of public funds towards public infrastructure and for that reason would be supportive of some incremental spending directed at public projects. I don't know if a penny tax would still be effective in generating new revenue source if big-ticket items were exempt.
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Old Posted Sep 28, 2011, 4:42 AM
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Would there be a rebate on new homes? If not then that would push more people out to Airdire, Chestermere, and so forth. This could end up being a catch 22.
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Old Posted Sep 28, 2011, 4:58 AM
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Go ask Americans how well their municipally-levied taxes have worked. You might want to look up "unintended consequences" just in case you're not familiar with the term.

I don't think it's the worst idea in the world, but why not just increase property taxes accordingly?
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Old Posted Sep 28, 2011, 5:11 AM
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^ The problem with relying on property taxes alone is that eventually nobody can afford to live anywhere.
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Old Posted Sep 28, 2011, 11:53 AM
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^ The problem with relying on property taxes alone is that eventually nobody can afford to live anywhere.
But in the meantime, Calgary's property taxes are very affordable.

Perhaps a tax increase on properties over a certain value... 2% wouldn't be noticed by many in the $500k and up homes. This of course assumes the city could actually keep this part of the property taxes.
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Old Posted Sep 28, 2011, 2:08 PM
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^ The problem with relying on property taxes alone is that eventually nobody can afford to live anywhere.
... I'm not sure why property taxes would be the killer here. This same sentence could be equally applied to income tax (nobody can afford to work anywhere) or sales tax (nobody can afford to buy anything).

I don't mind the idea of a progressive property tax as mentioned. I might set the threshold slightly higher than $500k though - that's pretty much an "average" house these days in Calgary.
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Old Posted Sep 28, 2011, 2:53 PM
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But in the meantime, Calgary's property taxes are very affordable.

Perhaps a tax increase on properties over a certain value... 2% wouldn't be noticed by many in the $500k and up homes. This of course assumes the city could actually keep this part of the property taxes.
I don't see marginal taxes on one's home being a fair deal. There are already many seniors with older homes that are now very valuable due to land. The nature of a percentage tax is that it is more for high value property already.

Marginal taxes on income, on the other hand, are alright in my books, as clearly it is gravy after a certain income level. Perhaps it can be considered provincially. 10% remains till $100K, 11% from $100K-$200K, 12% from 200K and up. From the entire pot, give 0.5% or so to the cities and towns proportional to population.

Frankly speaking, I wish the Feds would have not decreased the GST and instead transferred one percent to cities and kept 6% themselves. It would have been better federally and for cities. It was a real opportunity missed. The entire debt and deficit picture that we've been enduring federally would have been completely different, had the politically motivated move not been made.
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Old Posted Sep 28, 2011, 3:14 PM
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2 things:

- the tax needs to be implemented regionally (Cochrane, Okotoks etc)
- large items (cars etc) need to be exempt to avoid the situation of people travelling to Red Deer or the like to buy these items. Driving to Red Deer to buy a car to avoid the 1% tax makes sense, doing so to buy a toaster doesn't.

Other than that, I think it could work. As long as it is a plebiscite and has a term limit and a defined outcome (a certain infrastructure project), I could support it. That way it is accountable and measureable.
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  #10  
Old Posted Sep 28, 2011, 3:21 PM
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Originally Posted by suburb View Post
Frankly speaking, I wish the Feds would have not decreased the GST and instead transferred one percent to cities and kept 6% themselves. It would have been better federally and for cities. It was a real opportunity missed. The entire debt and deficit picture that we've been enduring federally would have been completely different, had the politically motivated move not been made.
I agree, it was nothing more than pandering to the voters.
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Old Posted Sep 28, 2011, 3:34 PM
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On a related note, Jack Mintz (Director of the School of Public Policy at the University of Calgary) yesterday indicated that a Provincial sales tax would actually be beneficial to Alberta.


Link - via 660 News
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  #12  
Old Posted Sep 28, 2011, 3:43 PM
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On a related note, Jack Mintz (Director of the School of Public Policy at the University of Calgary) yesterday indicated that a Provincial sales tax would actually be beneficial to Alberta.


Link - via 660 News
That would go over about as well as HST did in BC. Not saying I disagree with it, just saying.
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Old Posted Sep 28, 2011, 3:57 PM
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That would go over about as well as HST did in BC. Not saying I disagree with it, just saying.
I happen to fully agree with mintz on this. I know everyone is shocked that I still file my taxes in BC, but simply because its a lower tax burden.

before you all start in, when I moved here I barely noticed a difference in savings of not having the PST. Many goods I have bought were higher than the BC price plus GST/PST.

one example was I went to get some new bedding at a national chain, BC price was $32.99+12% and the AB price was $49.99+5%. this item was not on sale and there was only a day between me being in both stores. The BC item was $15.54 cheaper, which is a huge margin difference.

Now I'm not saying this always happens but it has happened more than, I would have been lead to believe.
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Old Posted Sep 28, 2011, 4:05 PM
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That price would still be higher in AB even with PST. The cost difference has nothing to do with taxes, and everything to do with the sheer amount of excess disposable income in this province.
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Old Posted Sep 28, 2011, 4:24 PM
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Originally Posted by Calgarian View Post
That would go over about as well as HST did in BC. Not saying I disagree with it, just saying.
Wasn't there some talk at one point at a 1% gasoline tax going to cities? This would make sense from the perspective that the people who drive more correlate to higher costs to the cities (EG roads). The other optics benefit would be that it would be a hidden tax. Personally I don't care much if it is hidden or not, but optics are critical to having things not result in public revolt.

Personally, I do agree that a provincial sales tax is warranted, but like you said, that wouldn't go over very well (unfortunately).

As an aside, were they to do something provincially, I would hope that they step back and consider the big picture, IE incorporating not only a portion for municipalities, but also finding enough revenue to invest back into the Alberta Heritage Foundation for Medical Research and related provincial endowments (incl. the Heritage Fund overall). The province really needs to think longer term!
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  #16  
Old Posted Sep 28, 2011, 5:06 PM
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I'm wary. A business man suggesting Calgarians pay more taxes to pay for unfunded projects (and create more business), in an article where it seems like a suggestion that the rich members of the city are tired of putting money up for projects will be lucky to only have 75% of the city against it.

Now, if the capital project portion of the city's budget was eliminated, and property taxes reduced accordingly, maybe then I could get behind it.

Here's a question, do businesses pay GST?
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Old Posted Sep 28, 2011, 8:45 PM
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Wasn't there some talk at one point at a 1% gasoline tax going to cities? This would make sense from the perspective that the people who drive more correlate to higher costs to the cities (EG roads). The other optics benefit would be that it would be a hidden tax. Personally I don't care much if it is hidden or not, but optics are critical to having things not result in public revolt.
Calgary and Edmonton currently currently receive 1 cent/litre from the provincial gas tax.

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I'm wary. A business man suggesting Calgarians pay more taxes to pay for unfunded projects (and create more business), in an article where it seems like a suggestion that the rich members of the city are tired of putting money up for projects will be lucky to only have 75% of the city against it.

Now, if the capital project portion of the city's budget was eliminated, and property taxes reduced accordingly, maybe then I could get behind it.

Here's a question, do businesses pay GST?
I believe businesses both charge GST on the service they provide and pay GST on their purchases. But I think they credit what they pay against what they collect and only forward the difference to Ottawa.
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Old Posted Sep 28, 2011, 9:44 PM
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Calgary and Edmonton currently currently receive 1 cent/litre from the provincial gas tax.
Okay - so that than is something that could easily be increased to 2 cents or what have you. The mechanism / process is already in place, and per the previous note, the distribution of tax burden is semi-fair with this method.
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Old Posted Sep 28, 2011, 9:54 PM
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That price would still be higher in AB even with PST. The cost difference has nothing to do with taxes, and everything to do with the sheer amount of excess disposable income in this province.
my point is that despite not having a PST, crap is just marked up higher by the retailers thus feeling like we do have one. I'd rather pay our provincial government through PST than pad the bottom line of some of these corporations.

You did manage to contradict the typical babel that I hear from many about how BC costs more because of taxes. First night I was in Alberta, some moron asked me what its like to live in a "socialist state" Apparently he believes that PST is a socialist ploy..
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Old Posted Sep 28, 2011, 10:32 PM
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Calgary and Edmonton currently currently receive 1 cent/litre from the provincial gas tax.



I believe businesses both charge GST on the service they provide and pay GST on their purchases. But I think they credit what they pay against what they collect and only forward the difference to Ottawa.
So in essence, the chamber of commerce came up with a plan to fund capitol projects via a tax the businesses don't actually pay
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