Discussions

I just read this about Rocanville going to a flat tax system and does it really matter if you have a $2,000,000 home or a $20,000 home. Do we all not get the same services, the same amenities  
that the municipality or town provides.  
The town of Rocanville passed their 2017 budget recently,  
opting for no mill rate and raising the minimum  
tax from $1,550 to $1,700 for all residential, commercial  
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tax.  
Aside from the education portion of the property tax  
which the town has no control over, all properties with a  
building on them will pay the same amount of tax. Tax on  
vacant lots will be $200.  
Mayor Daryl Fingas says that during their budget meeting,  
the council was almost entirely unanimous in deciding  
on getting rid of the mill rate and going to one tax rate  
for all property owners.  
“Council thinks it’s more fair to everybody to tax them  
the same, because of the amenities—everybody gets the  
same services,” he says.  
“We’ve always had a minimum tax. We just upped it  
the $150 and removed the mill rate, so it’s not going to  
make a big difference to a lot of people.  
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that without the mill rate it worked out pretty well what  
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there’s no reason we can’t just go with a minimum tax  
because that covers everybody in the town.  
“The other way, there was such a discrepancy because  
of the reassessment, and if we would have stayed with  
the minimum tax and the mill rate we would have ended  
up with some people paying a heck of a lot more, double  
what the increase is going to be now.  
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the minimum tax $150, and it brought in enough revenue  
for us for the expenditures for the year, so we went that  
way. We just tried a few scenarios and it worked out.  
“Most of our council were in favor of just the basic  
higher minimum tax because everybody gets the same  
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way than to over tax a person who spends a lot of money  
on their home to renovate it and upgrade it, and then they  
have to pay more. It’s sort of like a penalty. The more you  
spend on your home the more tax you have to pay. So  
this way everyone gets the same amenities and we felt it  
more fair. And I think most of us on council were in favor  
of that.”  
He says most Rocanville residents were expecting a tax  
increase due to the provincial government cutting back  
on municipal revenue sharing this year.  
“I’ve talked to a few people and they are expecting an  
increase because of what the government did to us and  
the shortfall on our revenue. They were prepared for an  
increase.  
“The $150 increase on the minimum tax works out to  
about $12.50 a month. It sure helps us because it covers all  
the shortfalls from the government.”  
Rocanville gets rid of mill rate, goes to fl at tax  
Visit Plain and Valley online any time  
at www.plainandvalley.com

I used to work in a municipal office and I don't think that would be allowed in Manitoba as the Province has declared that taxation will be based on property assessment values. You could do certain parts of the tax bill on a "frontage" basis, but then empty lots paid the same as one with a mansion on it. I kinda like this idea though, especially in smaller towns.

I wish Brandon was like this. Everyone pays the same for the same services. Really the property tax is a user for services provided. If everyone paid the same maybe more improvements would be done to housing as they wouldn't feel penalized for improving their property.

Everyone knows that's what Brandon needs, more tax cuts for the wealthy!

I am a single senior, living on a fixed income in a small home. Living here because that is what I can afford. Why should my taxes be increased while a two income family living in a huge home would have theirs decreased. Doesn't make sense.

JDRAMSEY:  
Everyone knows that's what Brandon needs, more tax cuts for the wealthy!  
 
tomi:  
I am a single senior, living on a fixed income in a small home. Living here because that is what I can afford. Why should my taxes be increased while a two income family living in a huge home would have theirs decreased. Doesn't make sense.  
 
 
So JDRAMSEY you judge wealth based upon the house they live in? I know a lot of people living in 300-500 thousand dollar homes and they are far from wealthy. Some are at the high end of their budget keeping up with the Jones. Others have inherited money that has gone into upgrading their home and using it as a down payment to lower their mortgage. Others have sold during the housing boom and made some money thus upgrading and lowering their mortgage. And some do make decent money. Why should they just keep getting it taken away?  
 
tomi:  
Nothing against seniors but why should home owners of lower value homes be subsidized by homes worth more?  
 
I want to build a garage. It would cost me about 30-40 grand. Does that make me more rich that others to take out a loan/mortgage and pay it off over a ton of years? It would cost me another $500 a year in property tax to have it on my property. Is it costing the city anything extra? Why would it cost me extra? Basically I am being told you can build a garage at your expense and we the city will charge you $500 a year to use it. That sounds reasonable. I would like to replace my rotting deck and put in a patio. 5 grand later my property tax goes up due to improving my house. Again I am paying to use a patio living area that I built.  
 
Why not base property taxes on your actual wealth then and charge according to T4 slips? The arguement of your house will be worth more when I sell it.....my retirement investment fees (at least with my plan) isn't saying.....sir your investments are going up so that means we need to charge you more cause it seems you are more wealthy. They charge me user fees.

I'm normally a proponent of flat taxes (especially on income tax), but in this case it doesn't make sense.  
 
In the case of income tax, if everyone is taxes 15% then everyone is paying the same percentage of their income. It's proportional to what their ability to pay is.  
 
But housing is different. If everyone is paying a flat rate - say $2000 a year - that's going to equal different percentages of your household income depending on where you live. While there's not a perfect correlation, if you look at how incomes are distributed across the city you will see that people who live in lower-valued properties, on average, make less than people who live in higher-valued properties. This is average, yes I realize there will be exceptions. Therefore, people who live in the East End will likely have less financial resources to pay this flat amount than someone who lives in Brentwood, for example. So the ability to pay in a household that makes $50k would be different than a household that makes $150k.  
 
I would also argue that everyone uses the same services/infrastructure is disingenuous as well. For example, a household that makes $150k might be more likely to water their lawn in the summer. That puts a lot of pressure on the water distribution system. We don't water our lawn because we can't afford it. Even though we're more people, we use about 1/2 the amount of water than my parents, who do water their lawn just about every day.  
 
A lower-income household would also be less likely to drive a car, vs. a household who might operate 2 or more vehicles. So there's potentially less wear-and-tear on the road system by a lower-income family (use of mass transit notwithstanding).  
 
Garbage collection is another example. We don't throw out a lot stuff because we can't afford a lot of stuff. We reuse, repair, buy used or do without. It takes us a month or more to fill up our bins, despite being a household of 6 people (with 1 still in diapers). Contrast to some more affluent households, and it's not unusual for some houses in my Riverheights neighbourhood to put out overflowing bins every. single. week. So a household that has less consumption will put less stress on infrastructure like the garbage system.  
 
Tying taxes to property values is imperfect, but it's a much fairer system than flat-taxing property. Ideally, yes, it should be linked to ability-to-pay (i.e. income tax), but that's also frought with problems because of the interaction between the different levels of government. So it's a fair compromise in the big picture.

Fishin Guy said "JDRAMSEY:   Everyone knows that's what Brandon needs, more tax cuts for the wealthy!     tomi:   I am a single senior, living on a fixed income in a small home. Living here because that is what I can afford. Why should my taxes be increased while a two income family living in a huge home would have theirs decreased. Doesn't make sense.       So JDRAMSEY you judge wealth based upon the house they live in? I know a lot of people living in 300-500 thousand dollar homes and they are far from wealthy. Some are at the high end of their budget keeping up with the Jones. Others have inherited money that has gone into upgrading their home and using it as a down payment to lower their mortgage. Others have sold during the housing boom and made some money thus upgrading and lowering their mortgage. And some do make decent money. Why should they just keep getting it taken away?     tomi:   Nothing against seniors but why should home owners of lower value homes be subsidized by homes worth more?     I want to build a garage. It would cost me about 30-40 grand. Does that make me more rich that others to take out a loan/mortgage and pay it off over a ton of years? It would cost me another $500 a year in property tax to have it on my property. Is it costing the city anything extra? Why would it cost me extra? Basically I am being told you can build a garage at your expense and we the city will charge you $500 a year to use it. That sounds reasonable. I would like to replace my rotting deck and put in a patio. 5 grand later my property tax goes up due to improving my house. Again I am paying to use a patio living area that I built.     Why not base property taxes on your actual wealth then and charge according to T4 slips? The arguement of your house will be worth more when I sell it.....my retirement investment fees (at least with my plan) isn't saying.....sir your investments are going up so that means we need to charge you more cause it seems you are more wealthy. They charge me user fees. "

While you are correct that building a garage isn't "costing the city anything extra", the fact that you even have money to rebuild a garage, or to do improvements, or to save up a large down payment etc, suggests you have the greater capacity to pay.  
 
Taxes are not simply about paying for what you use (which is a precarious argument at best, see my post above), but also about taxpayers with a greater ability to pay subsidizing those who don't have the same financial resources. Fairness isn't necessarily being the same. Having one household pay 10% of their income to property taxes compared to a household paying only 2% isn't fair, regardless of the yardstick you use to measure fairness - but with flax property taxes that's very likely the kind of disparity you're going to see.  
 
Whether or not you agree with that philosophy, it's the only way we can actually afford the infrastructure and services we have currently.  
 
As for the argument in retirement investment, I'm not sure I entirely understand what you're saying but increases in investments are eventually taxes. If you earn capital gains, for example, they are taxed (unless gained in a tax-exempt vehicle like a TFSA). Even RRSP earnings will be taxed at some point down the pipeline when you start taking annunities from it.  
 
The increases in your property value, in theory, does in fact increase your financial resources, particularly in your ability to leverage and borrow. That makes a huge difference in your ability, for example, to borrow money to make money such as investing, or to do improvements to your home to increase the value even further.

Abbysmum said "I'm normally a proponent of flat taxes (especially on income tax), but in this case it doesn't make sense.     In the case of income tax, if everyone is taxes 15% then everyone is paying the same percentage of their income. It's proportional to what their ability to pay is.     But housing is different. If everyone is paying a flat rate - say $2000 a year - that's going to equal different percentages of your household income depending on where you live. While there's not a perfect correlation, if you look at how incomes are distributed across the city you will see that people who live in lower-valued properties, on average, make less than people who live in higher-valued properties. This is average, yes I realize there will be exceptions. Therefore, people who live in the East End will likely have less financial resources to pay this flat amount than someone who lives in Brentwood, for example. So the ability to pay in a household that makes $50k would be different than a household that makes $150k.     I would also argue that everyone uses the same services/infrastructure is disingenuous as well. For example, a household that makes $150k might be more likely to water their lawn in the summer. That puts a lot of pressure on the water distribution system. We don't water our lawn because we can't afford it. Even though we're more people, we use about 1/2 the amount of water than my parents, who do water their lawn just about every day.     A lower-income household would also be less likely to drive a car, vs. a household who might operate 2 or more vehicles. So there's potentially less wear-and-tear on the road system by a lower-income family (use of mass transit notwithstanding).     Garbage collection is another example. We don't throw out a lot stuff because we can't afford a lot of stuff. We reuse, repair, buy used or do without. It takes us a month or more to fill up our bins, despite being a household of 6 people (with 1 still in diapers). Contrast to some more affluent households, and it's not unusual for some houses in my Riverheights neighbourhood to put out overflowing bins every. single. week. So a household that has less consumption will put less stress on infrastructure like the garbage system.     Tying taxes to property values is imperfect, but it's a much fairer system than flat-taxing property. Ideally, yes, it should be linked to ability-to-pay (i.e. income tax), but that's also frought with problems because of the interaction between the different levels of government. So it's a fair compromise in the big picture. "

Using your watering example. I may water my lawn more but I am also charged more for usage as a user based fee. Just like hydro. More you use the more you are charged. Transit, even though I don't use it I would still be charged for it through a user based taxes of infrastructure. Should low income earners who use public transit then pay more? If I have 2 vehicles using more wear and tear on roads but don't use transit would it not balance out? I don't use spray parks yet potentially lower income people would for as a free activity that I would still be charged as city recreation.  
 
From your other post:  
The increases in your property value, in theory, does in fact increase your financial resources, particularly in your ability to leverage and borrow. That makes a huge difference in your ability, for example, to borrow money to make money such as investing, or to do improvements to your home to increase the value even further.  
 
This would have nothing to do with property taxes. Sure I have access to BORROW more money but I still need to pay for it. To me a house isn't an investment. Think about it. I buy a house for 200,000. By the time it is paid off I will have paid about $75,000 in interest payments. So when I sell I would need to get a good $300,000 to pay for lawyers, agent, mortgage, etc. That is just to break even. So basically I would be recover what I paid into it. If I sell it for any less I am losing money. That also doesn't i:nclude upkeep such as a new roof, water tanks, furnace, renovations as things wear out, etc. People seem to think that you are rich after selling a house but after all the expenses you occur from it, how rich are you?  
 
There are also people who live in older less valued houses to free up their income. Hey live in a cheaper house pay it off faster, have access to a line of credit, go on vacations more frequent, have more disposable income. It goes both ways.

ummm dont we collect road taxes for infrastructure?  
 
maybe we should charge extra tax for extra kids, you know 6 kids compared to my one cost the system a lot more, right? (potentially they put back at 20 but who knows)  
 
$150 increase to the basic minimum is very reasonable and a flat tax for all households to cover services of the town is fair as it can be, if you dont think so i wonder why you believe that other people should get a share of someone else's money

we were to have flat tax for property taxes then I believe first we need a flat rate for income tax. 15% of income right across the board. Doesn't matter if you make 20000 or 20 million-you pay 15% of that amount.

So Rocanville, SK now has a "lump sum" taxation? That is actually a form of regressive taxation.  
 
The people at the bottom of the heap get bumped up, while those at the top get a haircut.  
 
For that to increase their coffers, there must have been a large majority of people paying the minimum.  
 
It sounds more like an 'everyone pitching in' Saskabear story than a tax reduction story.  
 

As someone who would probably benefit from this, I don't think it's fair at all.  
 
A person like me with a 300-500k house may not be "wealthy" by the definition we typically think of, but they are certainly wealthier than the person scraping by with a 50k house.  
 
A mill rate is fair; if you can afford a more expensive house, you can afford more taxes. If you don't want to pay more taxes, you can buy a cheaper house.  
 
Whether you agree with the current value of the mill rate is a different question, but I have no problem paying more than the person who has less.  
 
Raising taxes for the poorer to cut them for the richer is no way to run a community.

However, I chose to buy in a specific area and chose a house worth less because i knew i could afford to pay the taxes and the mortgage for it... rather than having to rent forever. No i cannot afford a 400k home and 6k in taxes... hence why i do not live in specific areas.  
 
A mill rate allows people with a smaller budget to still purchase a home rather than just having to rent forever.  
 
 
I personally do not agree with a standard rate of property tax, thankfully i do not live in Rocanville

The problem I see with this is large businesses that pay large amounts of property taxes are going to go from paying maybe $100 000 or more in property taxes down to $1700, then on the other end you'll have people who own small older homes and their property taxes will go up. It doesn't make sense in the long run.

What about them ??????