Canada taxes high income, but won't tax property speculation.
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Canada taxes high income, but won't punish property speculation.
And the Bank of Canada has repeatedly called out Canada's productivity crisis.
Here's what I think is going on:
- cheap labour instead of empowering workers to maximize output per hour
- progressive income tax
- land improvement taxThe latter two taxes are just punitive for success.
Look, I don't disagree with the leftist/progressive perspective that the income of most millionaires and billionaires are wildly disproportionate to their level of effort that they put in, but the more progressive the tax, the less people are willing to engage in income-generating activities within Canadian borders.
You can already see this kind of behaviour in the lower class; there are some misguided people who believe their income will be less if they earn more. However, people who are aware that they earn more if they earn are disillusioned by the rate of growth of income; higher taxes has earning more yielding diminishing return EVEN MORE diminishing.
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@manlycoffee I am curious - how would you propose to fix the disproportionate incomes of millionaires and billionaires with a solution different from a progressive income tax?
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@manlycoffee You know, I'm not even particularly sure about the real nature of that productivity crisis. It's this vague top level number that is constantly repeated, but you can't break it down into jobs in any rational way.
You can read the BoC discuss it here, There are 30 paragraphs in that article and not a single one has a concrete example of a specific job title that is underperforming.
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A drop in the bucket opportunity to deal with this: get rid of property improvement taxes.
It's a very small drop in the bucket, but a step in the right direction.
I have nothing against people hoarding real estate, but they'd better be paying their fair share.
This is by disincentivizing hoarding using land value tax (it's already priced into property tax), and getting rid of improvements tax (removing the disincentive to improve land).
And also, land value tax was previously a thing in Vancouver, but homeowners protested, and instituted improvements taxes so that the tax burden is taken away from homeowners and onto renters.
So at this point, there is a real disincentive to actually make productive use of land.
I often hear people expressing concern that Vancouver is building too many luxury condos.
Well, the only way to justify high rent due to improvement tax is to actually add value to the condos.
Want to stop luxury condo construction? How about "reward" purpose built rentals?
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Sal Rahmanreplied to Gaëtan Perrault last edited by [email protected]
I will admit the reason why I strongly (but possibly incorrectly) believed that there has been a productivity crisis: it's because I heard—but I admit that I never actually read up on it—that wages failed to keep up with the hours. This whole time, I thought wages earned relative to the of hours put in is what was factored into the "productivity calculation".
So, in others, what I strongly believed (but again, I never read up on it) that Canadians were putting in more hours but weren't generating the relevant taxable income.
I was open-minded to the above perspective, mostly because I like the idea of working less, while generating more income, and possibly the employer benefitting from it all, creating cool stuff that customers love.
Oh how I wish I was just working with cool robots that do the bulk of the work, for 4 hours per week, while still earning full-time wages.
But of course, that wishful thinking made me think that that was what the BoC was talking about.
I gotta read the document.
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Sal Rahmanreplied to Sal Rahman last edited by [email protected]
@sneako bear in mind, I actually don't think it's worthwhile going after money that millionaires and billionaires own.
Money is just some number on a ledger anyways, and the printed paper isn't worth much.
Instead, let's go after their productive assets: land and possible improvements.
If people improve land, and get punished for it, their investments would go elsewhere, and I don't think that's the outcome that we want.
Instead, let people improve the land as much as possible.
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@manlycoffee after some brief research into vancouver taxes, I am inclined to agree that they are incentivising totally the wrong things and clearly need an overhaul.
As for the millionaires and billionaires, it sounds like you think that they make too much given the effort they put in, but I'm not following you on what you suggest be done about it. You propose removing disincentives to improving land, but I'm not understanding how that addresses the issue - that would simply allow them to invest more.
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As per your second paragraph: I actually agree with you.
I realized I didn't address your point.
I honestly don't think I can.
My original argument came about because I have this strong "live and let live" bias, including letting people amass billions in wealth. So much so that I'd make incoherent arguments to defend it, without realizing my bias is getting in the way.
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Anyways, since I'm on the topic of being incoherent, I thought I'd talk about what I think could be a solution to the problem of homelessness:
have the government compete with private landlords.
The government's rental income could then be used to house the unhoused.
I find it appalling how much of a poor job the government has done in this regard.
And I can't blame them.
There's always this fight to raise taxes. But then people complain, and the tax is lowered again. Governments are just incapable of collecting the revenue needed to cover affordable housing costs.
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@manlycoffee fair enough
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@manlycoffee where I live, a main contributor to homelessness is unaffordable housing prices; certainly, increasing supply would help with that. However, the government has a long and sordid history with public housing, which has historically been appallingly racist in its implementation.
We also have a big problem where homeowners and landlords oppose new construction, thereby increasing the value of their properties while making housing unaffordable for anyone else. If we could overcome that hurdle, I think it would likely go a long way towards reducing homelessness.
