To the editor:
The article on tbnewswatch.com titled Tax shift pushed back has this council taking the honourable course of action, deferral.
If administration's report had been approved, $4 million of property taxes would have been shifted from non-residential rate payers to those in the residential classification.
Councillor Rebecca Johnson rationalized that such a property tax shift would make the city more competitive and attractive to business.
In my opinion, an important financial policy decision based upon such a simplistic rationale, one must live in a world devoid of understanding the complexity of existing federal and provincial tax regulations and policies.
I do not profess to have an extensive knowledge of tax legislation but a business enterprise in determining a profit or loss, the expenses which it incurs during its operation includes property taxes that it pays to the municipality.
So in effect that is a benefit which the residential rate payer does not enjoy in reducing their net income tax when their individual income tax return.
In addition business can reduce their income taxes through the various federal and provincial regulations.
Even those individuals that rent or lease property not only can pass onto their tenants approved rent increases but as well use tax property taxes, financing charges, and utility costs in calculating net income.
In the determination as to whether a business enterprise will locate in a specific community is not solely based upon property tax rates, I am certain their model is more extensive than just upon on such factor.
For example, Wal-Mart is expanding its retail operations and Target as well in this community, and Hampton Inns. Were the property tax rates the most critical factor in their business decision?
Aldo Ruberto's rationale for the shift to residential from my viewpoint also receives a failing grade.
"There's nothing wrong with that because people don't realize is that if industry or commercial do not succeed you as residents will wind up paying that tax," Ruberto said.
Aldo, surely a business does not just succeed because of lower property tax rates if at all. It's their entire business plan which includes price, service and marketing.
Perhaps what is needed at the council level is political thinking that is based upon 2011 realities and not those of 1911.
Emil Pohler,
Thunder Bay
