Quote:
Originally Posted by GGG
Why wouldn’t rents just go up to eat up the money returned through taxation?
What your suggesting doesn’t really seem like it will make a difference. The living wage of a single person in Calgary is around $22 per hour so about 45k a year. This person has about 15k in federal tax credits and 20k in Alberta so pays roughly about 7k in taxes. So if you reduced these taxes to zero the living wage would drop to 19.50 per hour.
Do you think that meaningfully moves the needle? How would you redistribute the taxes to other groups.
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I mean, $600/month is a lot of money to someone struggling to make rent. I definitely think the Federal personal exemption should be higher - reset it to $20k or so. Increase the higher brackets slightly to make up the difference, which ends up being a wash for the middle class (as the higher personal exemption offsets the higher rates).
Obviously that doesn't do anything for people who are currently homeless but keeping as many people as possible off the streets is a fundamentally good thing.
I also don't think it would get eaten in higher rents. Rents are definitely set by supply/demand, and I doubt higher net incomes at the very low end increases demand that much. Maybe a few people decide to keep their own place vs having a roommate but increased rental demand because people aren't homeless is a good thing.
Plus the current move to higher rents is definitely leading to a supply response with residential rental construction. There's definitely a lag there (buildings take time to build) but it's coming. For many years rents in Calgary have been too low to justify new apartment construction, so there hasn't been much if any. Now that they're high enough to justify new construction the pace of increases should drop, because new construction will add more and more supply every time they rise.