Taxation and the middle class

[bravado]

New spending would go toward hiring more firefighters, improving sidewalk snow clearing, responding to climate change, promoting affordable housing and tackling a growing backlog of repairs to buildings, pipes and roads, among other projects. The budget proposal would add 62 full-time jobs over three years, a staffing increase of eight per cent.

I'd rather improve the taxes now than watch the maintenance backlog grow even more while hoping that the Province will someday kick in more money to support the Cities.  It's only been 30 years since Mike Harris downloaded a whole bunch of fiscal responsibilities on the Cities for all the things that we are paying for now (eg social housing and social services).

I see what you're saying but I'd prefer it if we could just not do this until after I've retired or died, thanks

dear future generations: eat shit

[tomh009]

Here's another novel idea, not adding and increasing taxes on society.

Best I can do is another 23 percent increase over 3 years my guy: https://www.therecord.com/news/waterloo-...dcf56.html

(Didn't know where to post this since there isn't a general tax thread)

23 per cent is the (clickbait!) headline. Annual increases are 7.5, 7.3 and 6.4 per cent. That does not seem outrageous to me.

I do think property taxes should be progressive, though, with expensive houses taxed at higher (marginal) rates than inexpensive ones.

[bravado]

Progressive land taxes provide a disincentive to make your property better... but the land value tax debate is probably for another thread.

As usual, local journalists claiming that the sky is falling when property owners have to pay $15 more a month in times of inflation. Get a grip.

[ac3r]

Best I can do is another 23 percent increase over 3 years my guy: https://www.therecord.com/news/waterloo-...dcf56.html

(Didn't know where to post this since there isn't a general tax thread)

23 per cent is the (clickbait!) headline. Annual increases are 7.5, 7.3 and 6.4 per cent. That does not seem outrageous to me.

I do think property taxes should be progressive, though, with expensive houses taxed at higher (marginal) rates than inexpensive ones.

Now add those numbers together. :'P

It's not an outrageous increase, but an increase is still an increase. It may not be a lot of money for most of us who post here but for others, even a small increase in taxes can hurt. I don't think anyone likes to see a government put their filthy hands in their pockets.

[ijmorlan]

It's not an outrageous increase, but an increase is still an increase. It may not be a lot of money for most of us who post here but for others, even a small increase in taxes can hurt. I don't think anyone likes to see a government put their filthy hands in their pockets.

Depends what it’s for. If it’s a democratically elected government collecting funds for widely useful services such as sidewalk clearing, bring it on.

It’s definitely not worth listening to people who think tax increases are inherently bad.

[danbrotherston]

It's not an outrageous increase, but an increase is still an increase. It may not be a lot of money for most of us who post here but for others, even a small increase in taxes can hurt. I don't think anyone likes to see a government put their filthy hands in their pockets.

Depends what it’s for. If it’s a democratically elected government collecting funds for widely useful services such as sidewalk clearing, bring it on.

It’s definitely not worth listening to people who think tax increases are inherently bad.

People who think government is our enemy are actively burning society down. I’m done with them.

[dtkvictim]

"An increase is still an increase" isn't even as true as it sounds. Some of us like to at least maintain the level of services we have (if not increase them) in the face of inflation. Considering the cost increases in the construction industry, I wouldn't be surprised if the cost of tackling our infrastructure isn't a fair bit higher than the CPI.

It's true that it probably is an increase relative to the incomes of most people, but handling stagnant wages aren't really in the purview of municipal governments...

[ac3r]

People who think government is our enemy are actively burning society down. I’m done with them.

So does that mean we don't hate Ford and Chapman anymore?

[SF22]

People who think government is our enemy are actively burning society down. I’m done with them.

So does that mean we don't hate Ford and Chapman anymore?

There's a difference between "government" and "politicians."

Government is the people who work full careers at the city who have never been elected, but make sure that buildings meet standards, and that the roads are plowed, and that the trash cans at the park get emptied.

[tomh009]

Progressive land taxes provide a disincentive to make your property better... but the land value tax debate is probably for another thread.

Yes ... and progressive income taxes provide a disincentive to earn more. And yet, when applied within reason, the disincentives turn out not to be significant, and the progression makes our tax system (in the opinion of most people) more fair.

[taylortbb]

It does look like a significant (but not massive) number of owners have decided that those new condos weren't a great purchase after all.

I suspect the current spike in listings is a result of the proposed capital gains inclusion rate increase. Anyone who sells within the next two months will likely save tens of thousands of dollars in taxes if they've held since 2019 or earlier.

With the rentals, many of those have been sitting vacant because they cost way too much money.

I don't think this is true. I live in one of these new condos, which is ~80% investor owned, and almost every one of those units has a registered tenant (and those that don't, we keep finding unregistered tenants). Maybe there's a couple vacant units, but definitely not "many" .

[tomh009]

It does look like a significant (but not massive) number of owners have decided that those new condos weren't a great purchase after all.

I suspect the current spike in listings is a result of the proposed capital gains inclusion rate increase. Anyone who sells within the next two months will likely save tens of thousands of dollars in taxes if they've held since 2019 or earlier.

The new higher capital gains rate only kicks in after $250K in gains (and appreciation of primary residences is not taxed, of course) so a $10K savings would require the unit to have appreciated by something like $370K; that amount would result in $20K additional taxable income and something like $10K in taxes. I don't think there are many investment condos that have appreciated that much. Maybe duplex/triplex houses, but I don't think it would significantly impact the number of listings at the moment.

[danbrotherston]

I suspect the current spike in listings is a result of the proposed capital gains inclusion rate increase. Anyone who sells within the next two months will likely save tens of thousands of dollars in taxes if they've held since 2019 or earlier.

The new higher capital gains rate only kicks in after $250K in gains (and appreciation of primary residences is not taxed, of course) so a $10K savings would require the unit to have appreciated by something like $370K; that amount would result in $20K additional taxable income and something like $10K in taxes. I don't think there are many investment condos that have appreciated that much. Maybe duplex/triplex houses, but I don't think it would significantly impact the number of listings at the moment.

Are you sure? We bought our condo in 2018 and sold it in 2022 and our condo went up >200k in value, and ours was extremely cheap at the time, the same percentage increase for a more expensive unit would easily hit 370k, and I think property has still been going up since.

[bravado]

If it was your primary residence then no problem - if not, then you won’t get much sympathy from many.

[taylortbb]

I suspect the current spike in listings is a result of the proposed capital gains inclusion rate increase. Anyone who sells within the next two months will likely save tens of thousands of dollars in taxes if they've held since 2019 or earlier.

The new higher capital gains rate only kicks in after $250K in gains (and appreciation of primary residences is not taxed, of course) so a $10K savings would require the unit to have appreciated by something like $370K; that amount would result in $20K additional taxable income and something like $10K in taxes. I don't think there are many investment condos that have appreciated that much. Maybe duplex/triplex houses, but I don't think it would significantly impact the number of listings at the moment.

The $250k is per person, not per property. Many investors own multiple units, so for that math to work they'd have to stagger sales at one unit per year, and that's assuming they don't have any other capital gains. Given property values aren't really on an upward trend right now, and mortgage renewals are likely to come with higher rates, I can easily see the change pushing someone over the edge to unload a few properties now.

Also, $370k in appreciation since 2018 doesn't seem that unlikely. Maybe not on a studio, but the small 2bd layout was very popular with investors at Charlie West. I think that would be up $370k since 2018.