Comment 29092

By A Smith (anonymous) | Posted February 25, 2009 at 14:17:28

JonC, well, one of the consistent variables found in communities with high property values is a vibrant private sector and people with high amounts of disposable income. When tax rates are reduced, it allows existing property owners to keep a larger percentage of their income (including the increased equity from higher housing prices), which in turn allows them to spend more money at local restaurants, stores and also fix up their property. In effect, reducing tax rates encourages more private consumption, which in turn produces more jobs, which in turn leads to more demand for city property, better neighbourhods, which ultimately drives up revenue for the city.

That's why I am calling for reducing tax rates, because once they were brought down to 1%, then the city could go back to spending at rates that matched any increase in property values, which is generally the case today. Except at this point, the city will have permanently improved its desirability, precisely because of the better economy, larger private sector and improved quality of our neighbourhoods. Think of it as suffering some pain in the short term, in order to enjoy higher property values and all the positive qualities that will bring for the long term.

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