Quote:
Originally Posted by P'tit Renard
Property taxes are artificially low though in the GTA, that's why we have such a serious housing crisis exacerbated by terrible taxation policies. In the GTA, new homebuyers are unduly burdened with excessive development charges to make up the shortfall of artificially low receipts from property tax. Another example of young Torontonians shouldering the costs for the Boomers.
Instead of sticker shock, what property owners in Montclair is paying is the fair value of city services, and isn't subsidised by astronomical property development charges.
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No, what property tax primarily pays for in Montclair is public schools. I don't think that the average Montclair resident gets 3X better parks, roads, police and fire protection from that property tax difference than their equivalent in, say, Oakville or Aurora. I think that, despite higher property taxes, most American cities (especially suburbs) are staring at the barrel of a gun when it comes to infrastructure and service upkeep - possibly more than their Canadian counterparts.
Part of the reason why Americans have lower or even no state income taxes is because a lot of services that are paid for by provincial income taxes in Canada are paid for by municipal property taxes or sales taxes in the US. I actually don't think this is optimal, either, because in education, especially, you can have school districts in rich cities that are excellent and school districts in poorer, especially inner cities that are disastrous. Some poorer American municipalities are so screwed in terms of where they can generate revenue that they resort to charging fines and fees for misdemeanors on their lower class citizens. This is partly what led to the situation in Ferguson, MO.
It's really a pick your poison option:
America: high property taxes, low income taxes. More efficient housing market, more attractive compensation packages to attract talent, but massive inequalities in services (especially public education) between municipalities.
Canada: low property taxes, high income taxes. More equitable distribution of services, but puts a ceiling on compensation/drives away higher-end talent, and creates an artificial tax shelter in real estate.