Comment 23971

By A Smith (anonymous) | Posted May 27, 2008 at 00:46:49

I mentioned taxes in my post, but the point I am trying to make is more general. For example, when the city of Toronto eased zoning restrictions in the King/Parliament,King/Spadina areas in 1996, this led to the condo boom Toronto experiences today. Whether or not you like condos, the City of Toronto is now enjoying higher tax revenues as a result.

On the national level, Paul Martin cut the corporate tax rate from 28% to 21% from 2001 - 2004. Corporate tax revenue now comprises 19.02% of total federal revenue (2007), up from 15.78% in 2001. Not only did the corporate tax cuts not hurt revenue, they grew it as a percentage of overall federal taxes.

The point is not that cutting taxes helps poor people get ahead, it doesn't necessarily do this. The point is that when you help someone, you get rewarded in return. That is why poor inner city areas are not helped by handouts, rather the rich people who pay the taxes are made even richer. This can be seen in the growing income disparity between the rich and the poor today. In fact, the more government tries to decrease income equality, the worse the problem becomes.

Under Bill Clinton's 8 years as President, total government spending on non military, non interest payments went from 24.27% of GDP to 23.12% of GDP. This "social" spending comprises medicare, food stamps, welfare, etc. As this figure decreased over Bill Clinton's tenure, median income grew by an average of $565 dollars. Do you see the connection? Bill Clinton
shrank the very programs that are designed to lift people out of poverty, and the result was real wage increases for the poor and middle class, not just the rich.

George W Bush has increased "social" spending from 23.12% of GDP to 26.24% of GDP. The result is stagnant to a slight decrease in median wages. The idea that getting things for free from the government will help you is not borne out by the numbers.

People mention Toronto, and the fact that it has expensive real estate. Toronto also has the lowest property tax rate in Ontario. Residential tax rates in Toronto are 0.85%, in Hamilton they are 1.59%. The city of Toronto is easier on its citizens, and as a result, they get rewarded in higher assessment values. The lesson is that you tend to get more with honey than vinegar.

Even though it is hard to resist getting our fair share of government handouts, becoming less reliant on government would make Hamilton stronger and more self reliant. Hamilton should aim to be a net contributor to the provincial coffers, not a net beneficiary. We are mocked by Toronto, and it is not without reason. Hamilton has attacked capitalism for decades now, and the result is all around us.

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