Why I Disagree with a Flat Tax

Once again, the idea that Prince Albert should have a flat base tax has been raised in council chambers. In my ten years on council, I think that this is the fourth time that it's been raised, always by a councillor from a ward on the hill, saying that it isn't fair that residents of their ward pay more than their perceived fair share of taxes.

City administration will give us another report that will not tell us anything that we don't already know.

Resdential taxes are set as a percentage of the assessed value of a property. On average, properties in the hill areas of Prince Albert have higher assessed values, and thus pay higher taxes. Properties in the flats have lower assessed rates, and thus pay lower taxes. The assumption is that, if you can afford to live in a more expensive house, you can afford to pay higher taxes. To some (those paying the higher taxes) this somehow is not fair. They may point out that everyone should pay the same proportion of costs for fire and police, and they may even imply that those in the lower taxed area of town use these services more, and are thus being subsidized by those who pay higher taxes.

They will, of course, avoid arguments about these lower taxed properties having to deal with older infrastructure, resulting in issues such as frequent water main breaks, lead service water connections and unpaved streets. They will avoid arguments about lower proportions of green space in these areas, green spaces which are paid for out of the same pool of taxes that also pay for those police and fire services. They will stick to the police and fire arguments, claiming that those other things which make an area more pleasant to live in are too hard to quantify, and should just be left out of the discussion.

Of course, how do you factor in the police claim that 40% of crime is caused by non-residents? How do you make that fair? How about the taxation costs that are assessed against all residents for the soccer centre, whether or not you or any of the people in your house play soccer? Is that fair?

In fact, many of the beneficiaries of your city taxes are the residents of the surrounding rural municipalities. Do we have higher user fees for non-residents for such city-supported facilities as the soccer centre, the golf course, the Art Hauser Centre, or the Rawlinson Centre? We even pay a higher proportion of the regional library costs than the smaller communities that benefit from access to the regional library system.

In my opinion, the fairest tax is the sales tax. You buy more, you pay more. And you usually (although not always) have a choice in how much of this tax you want to pay. If you want to buy the more expensive option, you will pay more sales tax. Buy the cheapest possible option, or forgo the purchase altogether, and you will pay less.

I'm quite certain this report will show that a base tax will result in a tax reduction of a few hundred dollars to high value homes. It will show a similar tax increase for homes in the mid- and lower ranges. Proportionally, the decrease to the high value home will be smaller than the increase to the low value home. If you're currently paying a $4,000 tax bill, a decrease of $400 is 10%. If you're currently paying a $2000 tax bill, an increase of $400 is a 20% increase. And I would suggest that if you're a senior on a fixed income, just trying to stay in your own home for as long as possible, that additional expense might be enough to push you out of your home. I would also suggest that the $400 break that the more highly assessed family might receive would not be as life-changing.

Most of the residents of Ward Three would be negatively affected by a flat tax. As their representative, I will continue to argue against the imposition of such a tax. If we're so concerned about our tax revenues, let's look at ways of decreasing our expenses. Let's truly review the entire budget this time, instead of rushing it through and not even looking at the largest piece of it - the police budget. Let's look at ways of ensuring that all users of city facilities pay a fair rate for their use, instead of facing constantly increasing deficit financial reports from the Rawlinson and Art Hauser Centres (and the expected deficit from the soccer centre). But let's not put a heavier tax burden on those who live in the lower income parts of the city, who are also the least likely to speak up and complain about it. And for goodness sake, let's not be telling the public that this will make little or no difference to people - if it made no difference, it wouldn't have been proposed.

"There is no such thing as a good tax." - Winston Churchill