Comment 28753

By A Smith (anonymous) | Posted February 17, 2009 at 13:52:37

Frank, >> Your one horse act is getting really tiring

Right back at ya. Does every article and comment have to look to government and politicians to fix Hamilton's poverty problem?

Mr.Meister, >> A Smith is a fanatic, plain and simple. There is no thought process, rationale, common sense or reality in his arguments.

The rationale is quite simple. When you lower the cost of owning property (by decreasing tax rates), you increase the demand for property. When you increase demand, you increase the price people are willing to pay for property, which increases the nominal price.

Both Burlington and Oakville charge lower "tax rates" on property and surprise, surprise, their property is in higher demand, as reflected in the higher market prices people are willing to pay.

Do you get it yet? When you give people a better deal on tax rates, it increases the amount of people who will want to buy property in the community. Keeping tax rates 50-100% higher than neighbouring communities will do the exact opposite. It also explains why buildings sit empty, a sure sign of lack of demand.

JonC >> As for the vacant buildings, we already covered that they pay less tax than other cities and thus corporations can sit around on them paying peanuts in taxation, since the sites have no value as is.

Oakville charges a tax rate of 2.34% on commercial properties and a reduced figure of 1.64% on vacant commercial properties. Hamilton charges 4.57% on commercial properties and a reduced 3.2% on vacant. Furthermore, Burlington charges 2.5% on commercial properties.

As you can see, Hamilton charges businesses twice what Oakville and Burlington does, not less.

>> I wish such a well schooled economist as A Smith could provide the numbers from his years of study that indicate the ideal level of property taxation

A good start would be to match Oakville and Burlington. They have already proven that a community can raise adequate revenues for public services by using lower tax rates, so we don't have to reinvent the wheel, just follow their example.

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