Municipal taxes are going up in my municipality: Tantramar, a relatively recent amalgamation of several former smaller communities and a rural Local Service District (or, LSD ... potential an unfortunate acronym). The tax increase has prompted the usual cry against tax increases and the usual social media debates about what people are actually "getting" for the tax increase. I'll take this to be a fair discussion and a fair question. The problem is that we don't often get fair answers. Maybe those aren't to be expected on social media. With some notable exceptions -- I know some people who try -- social media is not about reasoned political discussion. I'm trying with this blog but ... does it make any differences? The point is this: most of the time, reasoned discussion is not what social media is about.
But, let's take this question (or, cry) as an invitation to try to answer it. First, there is a specific context. Recently, the provincial government of then-premier Blaine Higgs amalgamated a number of smaller communities (towns, villages, LSDs) to create larger municipalities. There was some resistance to this on the part of communities that believed they were losing their identity and on the part of some folks who rightly asked questions about policies and changing tax rates. It turns out that taxes went up and that was by design. The Higgs government's goal with amalgamation was to increase taxes. There actually was little other need for it. What they were trying to do was to find a way to increase municipal funding without themselves -- as a conservative low-tax government that was planning to run for re-election, in part, on that issue -- having to increase taxes. Local municipalities needed more money so Higgs was confronted with a choice. The province could provide that funding, as provinces have constitutional control of and jurisdiction over municipalities, or it could use that control to pull a con game. It could engage in the age-old political bait and switch and hand the ball off to newly created amalgamated municipalities. That was what they chose to do. It made them look good (they didn't increase taxes and could even promise to decrease them) while foisting what was a needed revenue issue onto others -- politicians at a different level of government -- who would have to pay the political price for it.
There is an immediate problem with this kind of approach to taxes, or likely more than one. The first and most obvious problem is that there is only one taxpayer. It does not matter too much which level of government levies the taxes because they are all coming from the same source. Passing the buck to municipalities, in other words, creates an illusion. Whether I pay those taxes through property taxes or income taxes or sales taxes is largely irrelevant. What is going on, in all instances, is that money is being re-allocated from the individual to the state. Governments, in fact, go through great lengths to disguise this with all sorts of different names: surtaxes, mandatory levies, mandatory user fees, etc. But, they all amount to the same thing. I'll get to the question of what we "get" out of this in later. My point, however, is that this dishonesty is, in fact, dishonesty. In the case of the Higgs' government, they were introducing a policy that they *knew* was going to increase taxes at the municipal level and was, in fact, designed to do precisely that all the while pretending that they were the party of low taxes. In this case, the policy was an act of manifest dishonesty in which Higgs did one thing while pretending he was in favour of another.
Amalgamation was, then, from its beginnings a policy that was intended to upwardly harmonize property taxes. This is what has happened. Those complaining about this harmonization are, however, asking another question: is this fair? If my taxes go up and I don't get any new services, am I being ripped off?
Maybe, but maybe not. The big point I want to make here is that this is an empirical question. There are many reasons why taxes go up. One is inflation. If part of our taxes go toward buying certain products (say, salt for winter snow removal or car parts for municipal vehicles or lawn mowing equipment, etc.) municipal governments are left with two options: increase taxes or decrease services. Someone might say "cut the fat," and that could be an answer but it depends on there being fat to cut. It is an easy and popular answer, particularly among opposition politicians because it makes an implicit promise: I'll cut the fat so you (taxpayer) can have your cake and eat it too (that expression never made sense to me but that is another story). I will create a situation, this politician says, where you can have everything you have now (or, in some cases more) and you won't have to pay anything extra for it. So, yes, prices went up and that means that the things our town (for instance) buys cost more but we won't pass that extra cost along to you. We will find a way that you can enjoy things that now cost more at a lower cost than you otherwise would pay.
Political figures like this because it works. It gets people elected by promising the electorate something (some kind of municipal service in this case) without taxpayers, in effect, having to pay full freight. I will come back to this another time, but you can see the appeal. If taxpayer voters don't check things out and work with their ideological perspectives (government = bloat), they could be lured by it. Few people run on this platform: elect me and you taxes will increase.
One answer to the increase in taxes in Tantramar then -- and I have not checked this out -- is that some people are now paying more in taxes because they are having to pay a harmonized rate that represents the actual cost of the products they are receiving. I hasten to add that I don't know this is the case, but I'll repeat my earlier point as well: this is an empirical question. We can measure it. I'll make up an example: if there were a person living just outside town who had gotten town services (snow removal, water, sewage, access to town supported libraries or events, etc., you can find some of the stuff my town does here), then it would be fair that taxes increased because before they were, in effect, a free rider on other tax payers. If they had subpar services, then, the reverse becomes true. Other tax payers are free riding on them (getting them to subsidize their services).
I have more to say about this but, you can see the points I want to make. Even a preliminary effort at reasoned discussion takes us a good distance from "taxes are too high" discourse. It asks us to consider what constitutes fairness, to look at tax rates and services, to think about the reasons we have taxes, and how taxes can be politically manipulated. By considering this, we clear away a bunch of misconceptions and -- in my view -- some pretty rank dishonesty and that allows us to take a step toward having a serious and mature discussion about taxes and tax rates.
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