Tuesday’s Headlines

7 comments

1. Bike lane on Javis is not such a good idea. If we fight for another North-South route in that part of town, it should have been Church.

2. Re. Finch and Weston.

   The Finch LRT should turn north at Weston and head straight for Vaughan.

   Like most areas outside of the Financial Core, Toronto’s high commercial taxes has caused a tremendous amount of decay. While this area was decaying, a few kilometers up the road things were booming.

   Between 1989 and 2004 Ward 7 lost 11.3% of its jobs. While Between 1991 and 2001 the number of residents in the Ward whom work outside of the city increased by 34%.

   The area does not need new condos. It needs jobs. Condos in Toronto have occupied the gaze of the Pollyanna’s running the city for to long.

3. Glen: as I understand it, council is shifting the tax burden from businesses to residents, if a little slowly. What else would you recommend for increasing jobs in the city?

4. Andrew, my suggestion would be to shift the burden faster. Toronto has to be competitive against the edge cities around us in attracting business back. I too pay property tax and I wouldn’t mind seeing a 10% tax raise for the next couple of years, as long as the extra money goes to cut business tax. But of course Miller won’t commit this kind of suicide.

5. Andrew,

   1. Accelerate the shift in tax burden to 5 years.
   2. First 1 million of assessment to taxed at the residential rate.
   3. Prevent any change in zoning of non residential to residential.
   4. Introduce a city wide parking tax each of $500 per spot per year.

   While the first point may appear to be expensive it is not. There is a saying that a capital tax (property tax) of 0% or 100% both produce no tax tax revenue. The important thing to due is to find the point between 0-100% that produces the most revenue over time.

   This is an area that has had some amount of research. In Toronto’s case the evidence seems to show that Toronto’s high non residential taxes in fact are counter productive. IOW Toronto could produce more tax revenue by lowering the rate.

   This dynamic can be seen in action as detailed by John Barber………

   But something quite astonishing happened when taxes did fall. Between 1998 and 2000, a period when assessments were frozen, the Business Education Tax rate in Toronto fell about 10 per cent — equivalent to a 5-per-cent cut in overall business taxes. But when Ontario properties were revalued in 2001, it turned out that commercial assessments in Toronto had increased by about 40 per cent.

   By comparison, commercial assessments in the rest of Ontario, without the benefit of steep BET cuts, only increased 14 per cent over the same time period.

   Even if the Toronto tax cuts were responsible only for a fraction of the huge gain in property values, they were self-financing — just as supply-side theory predicts.

   Over the same two-year period, Toronto gained an impressive 100,000 new jobs — the sharpest growth in employment since the mid-1980s. Was that a coincidence? I don’t think so. Nor does coincidence seem to explain why employment immediately levelled off and began to decline when the tax cuts stopped.
   ——————

   It should also be noted that it is only time during the last twenty years where Toronto’s commercial assessment base increased more that that of surrounding regions and the city’s own residential class.

   Class A Commercial Office Inventory
   Developed Pre 1960-1997

   Toronto 80% Surrounding Region 20%

   Class A Commercial Office Inventory
   Developed 1998-2005

   Toronto 20% Surrounding Region 80%

   Lastly the tax issue is also a green issue. Moving jobs back into the city will have a far bigger impact on climate change than bike lanes or Transit City. Look at Wards 20,26 and 27, by far the three wards with the highest levels of employment (the core). Between 1989 and 2004 jobs went from 410,907 to 384,503, a decrease of 6.5%. While between 1991 and 2001 the percentage of residents in those Wards whom travelled outside of the city for work increased by 33%. That is to work outside of the city, which I doubt they would be able to utilize bikes of even public transit.

   It is time to get serious about this issue in Toronto!

6. Here is some reserach on the topic.

   http://fmwww.bc.edu/EC-P/WP532.pdf

   Quote:
   Two results were particularly striking. First, in all the numerical examples, the revenue-maximizing tax rate was lower than the actual effective property tax rate employed in many jurisdictions, suggesting that some jurisdictions may be 9on the wrong side of the Laffer curve: with respect to property taxation.

   http://faculty.maxwell.syr.edu/jying…hapter_5.4.pdf

   http://www.mitpressjournals.org/doi/…65304323031120
   http://tigger.uic.edu/~gkarras/mybook.html

   and of course Keynes

   http://www.gutenberg.ca/ebooks/keyne…means-00-t.txt

   Quote:
   Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance, than an increase, of balancing the Budget. For to take the opposite view to-day is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more;–and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.

7. The fact that GO NOW decides to study electric shows that they never considered it in the first place which is really stupid and leads to spending a billion dollars twice in 20 years (which is the plan). Hopefully GO is catching up to the rest of the world and becoming an innovator again instead of a polluter.