Decision 2010: Calgary Municipal Election

[Bigtime]

I really don't think now would be the time to play around with adding a tax. Our economy is by no means fully healed and on the up and up. Just look across the pond to the EU to see how shakey the foundations still are.

[You Need A Thneed]

Originally Posted by Wooster

A lot of US cities have sales taxes and have recently voted for small increases of these sales taxes (Denver is a prime example) to pay for billions of dollars in infrastructure - particularly transit.

What would you think of the idea of a 2% "regional sales tax" for the Calgary region to finance the development of LRT and Regional Commuter Rail Infrastructure?

This would only bring residents' sales tax burden back up to the level (7%) they were paying only a couple years ago before the Harper government cut the rate.

Based on by own rough estimate (Saskatchewan brings in about $1.1 billion in revenue a year from a population only a shade over 1 million with a 5% PST) a 2% sales tax on the 'Calgary Region' - population ~1.2 million would bring in about $500 million a year - escalating as population grows.

Compounded at a 1.5% growth rate, this would mean about $12.4 billion over 20 years.

For $12.4 Billion Calgary could build SELRT, NCLRT under Centre Street, 8th Ave Subway, an inner ring LRT line, Commuter Rail to Airdrie and Cochrane, Centre-City Streetcars, 17th Ave SE Streetcar and probably more.

This could all happen without a single penny of provincial or federal grants - which could be directed toward other priorities.

Not a bad idea, but I think I'd have a gas tax instead. 5 cents a litre, or something like that - built into the price of the gas. People would forget it's even there, and be helping build infrastructure every time they fill up gas.

[Wooster]

Originally Posted by Bigtime

I really don't think now would be the time to play around with adding a tax. Our economy is by no means fully healed and on the up and up. Just look across the pond to the EU to see how shakey the foundations still are.

But economic woes in Alberta have very little to do with consumer spending - which is extraordinarily high. Keep in mind that this was our sales tax burden only a couple of years ago. Has the 2% reduction made a difference in your spending or your overall finances?

I think the benefit of what you could get, would far, far outweigh the costs. Also, from a competitive standpoint, the 7% rate would still be a full 3% lower than any other jurisdiction in Canada.

[Bigtime]

If we had to implement a tax, I'd lean towards the gas tax also.

[Wooster]

Originally Posted by Bigtime

If we had to implement a tax, I'd lean towards the gas tax also.

How much revenue could a 5 cent gas tax generate?

[gorebug]

Originally Posted by Bigtime

If we had to implement a tax, I'd lean towards the gas tax also.

Agreed, a civic sales tax would mean big ticket purchases would be made in Airdrie, Okotoks and Mallzac.

While I am more likely to support a gas tax, they usually just end up in general revenues making it tough to measure whether they provide any true benefit.

~bug

[Wooster]

Originally Posted by gorebug

Agreed, a civic sales tax would mean big ticket purchases would be made in Airdrie, Okotoks and Mallzac.

While I am more likely to support a gas tax, they usually just end up in general revenues making it tough to measure whether they provide any true benefit.

~bug

This is exactly why I specified Calgary Region, which would include outlying towns and municipal districts. They would participate because they are users of Calgary Infrastructure, but also because they would also get new infrastructure as outlined in the Calgary Regional Transit Plan such as Commuter Rail lines. I would say revenues would be earmarked and budgeted for capital projects so they wouldn't stream into general revenues of municipalities. It's done all over the US, it wouldn't be very difficult to implement here. It wasn't that long ago that Alberta changed legislation so municipalities could go forward with Tax Increment Financing.

[MichaelS]

Does the MGA allow Calgary to have its own regional sales tax? Or are you proposing (if it doesn't) that the MGA be changed?

[Wentworth]

A sales tax would be political suicide for anyone trying to introduce it. The lack thereof is completely ingrained into the Alberta identity. Plus, without an existing provincial sales tax collection infrasture to piggy back off of, it would be costly to implement.

[Ramsayfarian]

Originally Posted by Wentworth

A sales tax would be political suicide for anyone trying to introduce it. The lack thereof is completely ingrained into the Alberta identity. Plus, without an existing provincial sales tax collection infrasture to piggy back off of, it would be costly to implement.

I'm against a sales tax. I'd prefer them to legalize weed, tax the shit out it. You'd then put a serious dent in organized crime and free the cops to chase after real criminals instead of some poor sap who like the occasional joint after a hard day's work.

[Bigtime]

Originally Posted by Ramsayfarian

I'm against a sales tax. I'd prefer them to legalize weed, tax the shit out it. You'd then put a serious dent in organized crime and free the cops to chase after real criminals instead of some poor sap who like the occasional joint after a hard day's work.

I can get behind this idea, 'High Society' applied for real.

[Ramsayfarian]

Originally Posted by Bigtime

I can get behind this idea, 'High Society' applied for real.

Tax the weed and then tax doritos and other snack food. We could eliminate property tax all together.

[Wooster]

Originally Posted by MichaelS

Does the MGA allow Calgary to have its own regional sales tax? Or are you proposing (if it doesn't) that the MGA be changed?

For certain it would require amendment - like it was for Rivers District's CRL. MGA is long overdue for an overhaul anyways.

Point is, it would be nice if big cities like Calgary could be more financially self sufficient and have to go lobbying senior levels of government constantly for funding it may or may not get, might be pulled, or whatever at the political convenience of ministers that have no sense at the kind of things cities need. It's no way to be able to plan for the future.

Sales tax just happens to be one source of revenue that US cities have relied on to provide stable and predictable funding for major long term infrastructure development. In Canada, it's all ad hoc.

[MalcolmTucker]

Reliance on sales tax has really caused a world of hurt on state and local government in the USA. We might complain about MSI going fluctuating, but it is a really good deal. Topping up the gas tax by 5 or 10 cents would be good - the least distortion-airy for sure.

Sales taxes are bad as they aren't an

• economy wide (in this case)
• VAT (which are awesome)
• 'deregressivfied' through transfers

Hallowing out: ie: Industrial businesses would shift out of the jurisdictional boundry, and a mall on the reserve would look incredibly good from a shoppers perspective! You end up with a Chicago situation, where you have to keep raising the tax to get the same revenue, causing more revenue flight.

Edit:

Also, remember that the purpose made taxes of low amounts in the USA are tacked onto larger taxes that support base budgets. Administration costs are really high on sales taxes - you're going to loose the first 1-2% of collection to governments direct costs.

[Bassic Lab]

Originally Posted by Sir.Humphrey.Appleby

Reliance on sales tax has really caused a world of hurt on state and local government in the USA. We might complain about MSI going fluctuating, but it is a really good deal. Topping up the gas tax by 5 or 10 cents would be good - the least distortion-airy for sure.

Sales taxes are bad as they aren't an

• economy wide (in this case)
• VAT (which are awesome)
• 'deregressivfied' through transfers

Hallowing out: ie: Industrial businesses would shift out of the jurisdictional boundry, and a mall on the reserve would look incredibly good from a shoppers perspective! You end up with a Chicago situation, where you have to keep raising the tax to get the same revenue, causing more revenue flight.

Edit:

Also, remember that the purpose made taxes of low amounts in the USA are tacked onto larger taxes that support base budgets. Administration costs are really high on sales taxes - you're going to loose the first 1-2% of collection to governments direct costs.

Would it not make sense to simply piggy back on on the GST? In the area affected the rate would be combined and applied just like the GST was two years ago, at seven percent. We would then divide the revenue generated.

That said, I'm not in favour of a regional sales tax. I can foresee nothing but difficulty in the implementation. There would be problems deciding where to draw the lines and border areas would be unfairly distorted. I would prefer a province wide tax. We already subsidize rural infrastructure, in both transportation and education, so why do it even more?

One source of revenue I'd really like to see is municipal variation in vehicle registration. It would really only affect Calgary and Edmonton though other cities could opt in if they felt the need. Essentially a Calgary registered car would receive a licence plate with a C prefix, like C-GHB-932. A premium above the base registration cost would apply, say an additional $50.00. Having a Calgary plate on a vehicle would mean that rates for parking, principally for park and rides but it could also apply to on street parking, and perhaps toll roads are lower. We could charge $1.00 dollar for Calgary park and riders and $10.00 for non-residents. We could turn a number of roads (Macleod, Crowchild, etcetera) into camera operated toll roads; when they take a picture of a Calgary plate no charge is levied but any one else gets a bill in the mail. We would no longer be spending the tax dollars of residents subsidizing infrastructure used by every one else.

[bob1954]

Question: Does'nt a portion of GST get returned to the province? Personally, I feel the property taxes that home owners and commercial property owners pay is (out of all the taxes we pay in the US and Canada) are the most "unfair", if that's a proper way of saying it. I don't have a problem with "user" type taxes.... Problem is, you never get rid of them!

[MalcolmTucker]

A portion of the GST returns to both the province and the city, but a small amount to account for 'one government can't tax another'. Surprisingly, this only began to be the case for cities under the "New Deal for Cities and Communities" when Paul Martin for PM. Generates ~ $20 million a year for the city.

As for adding the 2% to the GST, unless your doing a full supply chain within Calgary, a VAT applied in a small part of an economy acts as a RST.

As for vehicle license fees, they hurt poor people. Much better to act on the gas tax which actually creates a negative externality.

[gantenbein]

Originally Posted by Sir.Humphrey.Appleby

As for vehicle license fees, they hurt poor people. Much better to act on the gas tax which actually creates a negative externality.

What if vehicle licence fees are proportional to the size of engine in the vehicle (as is the case in Germany)? Then you're taxing those who have the greater impact on the environment, and, presumably, those who have the kind of money sitting around to buy Hummers.

[gorebug]

Originally Posted by gantenbein

What if vehicle licence fees are proportional to the size of engine in the vehicle (as is the case in Germany)? Then you're taxing those who have the greater impact on the environment, and, presumably, those who have the kind of money sitting around to buy Hummers.

My thought, along this line, is to charge registration fees based upon GVWR (e.g. flat reg fee + $0.05*GVWR).

On my most evil days, I would also support applying a similar multiplier to traffic infractions.

~bug

[lubicon]

Originally Posted by gantenbein

What if vehicle licence fees are proportional to the size of engine in the vehicle (as is the case in Germany)? Then you're taxing those who have the greater impact on the environment, and, presumably, those who have the kind of money sitting around to buy Hummers.

You'd also be taxing people who require a larger vehicle for work or due to having a large family.