Taxes Hiked Again

[PowerPlayoffs06]

http://calsun.canoe.ca/News/Alberta/...8/5411716.html

The average Calgary homeowner will see property taxes increased by $106 this year after council today agreed to a 5.4% levy.

While council stuck to its planned 4.5% hike, the rate was compounded by the province’s share of education taxes, which will see the city take $46.50 of the bill and the province $59.50.

Despite competing attempts from aldermen to increase the rate to cover unfunded emergency services requests or lower the rate by dipping into city reserves, council held firm on the increase adopted three years earlier.
With the increase, the tax bill for a $447,500 house, the median in Calgary, will be $2,060 when they arrive in mailboxes next month.

Gas prices are going up, food prices are going up, housing prices are still going up, now, not surprisingly, property taxes are going up again. It's enough to make me want to put a For Sale sign up on my lawn. When does it end?
Also, why does the Province command such a large portion of city property taxes?

[pepper24]

Where are you going to move? Gas prices are high everywhere. Upgrades in living like BC are more expensive areas to live and also don't have the workforce.

It just means for most Albertans and Calgarians in particular that discretionary spending (entertainment, new purchases etc.) will have to be cut.

I am OK with the tax increases if it means better roads, schools, hospitals etc. to catch up with a booming city.

[Bobblehead]

Originally Posted by PowerPlayoffs06

http://calsun.canoe.ca/News/Alberta/...8/5411716.html



Gas prices are going up, food prices are going up, housing prices are still going up, now, not surprisingly, property taxes are going up again. It's enough to make me want to put a For Sale sign up on my lawn. When does it end?
Also, why does the Province command such a large portion of city property taxes?

For Education.

[mykalberta]

It used to be for Education, now it goes into general revenues.

Although did hear something juicy.

Because of the home prices and taxes, Calgary puts in roughly 1/2 of the money the gov takes from property taxes and gets less than 1/3 of the proportioned monies.

[ken0042]

As much as I would rather pay as little as possible, I really can't argue with this. With the Alberta Health Care "tax" coming off in January, my net tax bill will be going down for the next 12 months.

Never mind this rate of increase is still a lower rate than my annual raise was. So I'm still further ahead.

As for why the province takes so much, IIRC that money goes towards schools; which are funded by the province. So it really isn't the city's money to begin with, but the city has the burden of collecting it from us.

[Ozy_Flame]

As long as you receive a proportional raise per year to adjust for inflation, your ability to afford it raises proportionally.

Then again, I would fear not getting an adjusted raise every year; THAT would be a problem.

[Claeren]

And property taxes are a set amount each year - really they are only raising them the inflationary amount (the city inflationary 'basket of goods' is an even higher rate than the consumer basket).

If your salary goes up by 3% or 10%, so does the amount you pay in income taxes even though no one 'raised your taxes'. (Because it is percent of your income)

The same cannot be said about property taxes.


I don't see a news article every year telling everyone that their income taxes have gone up each year because they got a raise - because that wouldn't make sense.

Instead they incorrectly write articles that indicate to people that an income tax increase is the same in principle as a property tax increase. They are very different things.

A 5% rise in property taxes is inflationary, a 2% rise in income taxes would be in excess of your individual wage inflation/growth and would be (say) 5% + 2% compounded.


Claeren.

[Ozy_Flame]

Originally Posted by Claeren

A 5% rise in property taxes is inflationary, a 2% rise in income taxes would be in excess of your individual wage inflation/growth and would be (say) 5% + 2% compounded.


Claeren.

Alright, but if your raise is adjusted to higher than the rate of inflation, then yes, while you are paying more income tax, you're also earning more to afford the said property tax increase.

Where I work, they always increase wages more than the inflationary rate; I should hope most professional corporations do the same.

[PowerPlayoffs06]

I've only ever worked for two companies so far in my life. The first company I worked for never had yearly cost of living raises to offset inflation. In the 10 years I was there I think we got a 5% cost of living raise once. I haven't been at my current company long enough to find out if they do it or not. Is it all that common for people to get yearly cost of living raises? Or is that just for business professionals who work downtown?

I've never heard anybody I know who works in an industrial job talk about getting a yearly cost of living raise and these are generally the people who are going to be hit hardest by the constant increases along with seniors and fixed income families and probably renters who will eat the cost of the property tax in a rent hike.

I understand that a raise will technically result in an income tax increase because it's inseperable but I thought property taxes were dictated by the value of your home. So the assessments we got a few months ago show that my home is worth more, and accordingly my property taxes just went up by $200. So if my home is worth half of the average home value ($447,500) they're using for the $106 figure, my increase should only be for $53?

As for no longer having to pay for Alberta Health Care, isn't it a fairly common employment benefit that a company will pay a large portion if not all of a workers Alberta Health premium? So removing that tax would mostly benefit businesses?

[Claeren]

Originally Posted by Ozy_Flame

Alright, but if your raise is adjusted to higher than the rate of inflation, then yes, while you are paying more income tax, you're also earning more to afford the said property tax increase.

Where I work, they always increase wages more than the inflationary rate; I should hope most professional corporations do the same.

Ah... yes? I agree?

That is exactly what i mean.

If you get a raise higher than the inflation rate you are paying LESS in property tax as a percentage of your income and exactly the same percent in last year (more in absolute terms) in income taxes (assuming you have not hit a higher bracket).


Therefore, without income taxes 'going up' they have actually gone up more than property taxes, even though the newspaper articles and forum posts were all written about 'property tax increases' and not 'income tax increases'.



Claeren.

[Claeren]

Originally Posted by PowerPlayoffs06

I understand that a raise will technically result in an income tax increase because it's inseperable but I thought property taxes were dictated by the value of your home. So the assessments we got a few months ago show that my home is worth more, and accordingly my property taxes just went up by $200. So if my home is worth half of the average home value ($447,500) they're using for the $106 figure, my increase should only be for $53?

Kind of....

Your houses value really matters in its comparative value to other homes in the city to help determine a formula to slightly weight the cost to higher value homes. If ALL homes went up 10% then your taxes are the same + this years rise. If one area of the city was up more like 15% and another 5% then there would be a slight adjustment to the spread in taxes between the two areas.

The actual rise in your home value on its own does NOT result in higher taxes though.

If your house dropped 5% but most of the city dropped 20% your taxes would go up.

But it doesn't cut in half the cost of taxes on a cheaper home, as there are far more homes worth the middle value or lower than there are homes priced much higher.

The City of Calgary spells it all out on their website....



Claeren.

[Bend it like Bourgeois]

If only city voters paid even a tiny bit of attention.

Whats this...10 straight years? 12?

If we're not officially at the bottom of the tax heap now, we can see it for sure.

And still our idiot mayor cries for more money. I love how every goofy project imaginable gets funded (including goofy projects to imagine goofy projects) and then when tax hike time comes the mayor talks about essential services. Maybe if we funded those first instead of last, we wouldn't have an issue. Smart I guess, in a weaselly sort of way.

[Mr.Coffee]

^ I can see your point but...

Calgary is a major city now. Isn't this simply the symptom of making the transition from a medium sized city to a major?

[Bend it like Bourgeois]

Originally Posted by Mr.Coffee

^ I can see your point but...

Calgary is a major city now. Isn't this simply the symptom of making the transition from a medium sized city to a major?

I dunno. If your income tax went up 100% or more each decade, regardless of your earnings, would that be a symptom of becoming a big country?

The 600-800% increase in federal and provincial funding over the last 10 years or so is a symptom of becoming a big city. As is the billions in capital spending (not covered by property taxes). And high user fees, and more of them.

Property tax hikes are really about Councils play money. Thats what offends me. If they city made any effort to keep spending under control and HAD to raise taxes; so be it. And for the first few years of this that was probably the case. But we're well past that.

[Addick]

Originally Posted by Bend it like Bourgeois

If only city voters paid even a tiny bit of attention.

They might have have to stop whinnying as they'd learn that Calgary has one of the lowest property tax rates among Canadian municipalities. In a descending list of the largest 25 I believe we are in the bottom five, and among the Big 6 we have the second lowest rates (Calgary Economic Development, 2008). We're not starting to be overtaxed but rather starting to be taxed according to our wants and needs.

[Bend it like Bourgeois]

Originally Posted by Addick

They might have have to stop whinnying as they'd learn that Calgary has one of the lowest property tax rates among Canadian municipalities. In a descending list of the largest 25 I believe we are in the bottom five, and among the Big 6 we have the second lowest rates (Calgary Economic Development, 2006). We're not starting to be overtaxed but rather starting to be taxed according to our wants and needs.

CED is the city, so try and look surprised that they present this well. Do you think the City of Toronto has big bold graphs that say 'we suck'.

We used to be near the bottom. We've been middle of the pack-ish for a bit. Certainly if mayor Dave gets his Christmas list funded over the next couple years we will be at the bottom.

All of which would be ok if it were needed. My beef is we're taxed according to Council's wants and needs, not Calgarians.

[Claeren]

Originally Posted by Bend it like Bourgeois

I dunno. If your income tax went up 100% or more each decade, regardless of your earnings, would that be a symptom of becoming a big country?

Your income tax IS up WELL over 100% in the last decade!

Say your income tax rate is ~40%. If you made 35,000 in 1998 and make 70,000 in 2008 (Very reasonable in Alberta for an employee going from 30 years old to 40 years old in a career, with our economy. Less skilled likely went from $24,000 to $48,000) then your taxes went from $14,000 to $28,000 - without even considering you are now likely in a higher tax bracket.

(I know you said 'regardless of your income' but nothing is 'regardless', no more than it can be 'regardless of inflation' or 'regardless of home price growth' etc.)


If your property taxes were $1200 in 1998 and rose at 5% per year (and i believe it has been less than that) then your 2008 taxes would be $1960, LESS than your income tax growth.



Further though is that the city (arguably) offers more services you actually use than any other level of government, but has the least power to increase revenues AND has had the highest inflation rate in services they do provide.

Plus the province takes HALF the property taxes!



No comparison - if you want to complain there are plenty of better options....





Claeren.

[ernie]

With the increase, the tax bill for a $447,500 house, the median in Calgary, will be $2,060 when they arrive in mailboxes next month.

My house in Halifax is worth a little more than half that median and I pay more property taxes while not having city water or sewer.

Get over it calgarians.

[Metro Gnome]

Forgive me if Im wrong here, but hasn't the city seen sizable tax windfalls from the sky-rocketing increases in property value around these parts the last few years?

[Claeren]

Originally Posted by Metro Gnome

Forgive me if Im wrong here, but hasn't the city seen sizable tax windfalls from the sky-rocketing increases in property value around these parts the last few years?

No, not directly.

Property values dictate the comparable burden of tax between homes/communities.

But if home prices double then the rate per home goes down to raise the same amount of money as the prior year (plus the possible yearly increase).

If it were tied directly to home prices, and home prices were flat for say 10 years like they could well be, then the city would have to deal with 2%-5% inflation each year (compounded) with no increase in tax revenues.


That is why they need to raise it 5.4%, or whatever amount, each year - it is how they cover inflation (beyond user fees) on a year to year basis.




Claeren.