I don’t like to pick on people by name in this blog but I do once in a while to illustrate a point.
The point today is that the tax cutter crowd (those who only want government to cut taxes) don’t even exhibit much common sense some times.
Take this column for example. It’s written by Herb Duncan described as aa Saint John businessman. Duncan says:
A lower property tax rate, as well as more prudent use of taxpayers’ money, will go a long way toward rebuilding Saint John’s population. The resulting greater demand and prices for homes will give provide an opportunity for those wishing to retire to realize a reasonable return on their greatest investment, their home. Do Saint John citizens deserve less? This council was voted in with a promise to reduce the tax rate. Nothing else is acceptable. Nothing.
These are fairly strong words. Let’s do a little analysis here. A typical Saint John family might pay $1,500/year in property taxes. If City Hall makes a big cut of 3% off the tax rate, that family will say $45/year or about four bucks a month. Does Duncan really believe that this will result in “greater demand and prices for homes will give provide an opportunity for those wishing to retire to realize a reasonable return on their greatest investment, their home”?
Of course he also talks about more prudent use of taxpayers’ money as well. Let’s assume then that City Hall can slash spending by 5% next year. The city gets about what 60%? from property taxes so that means that typical family might save $45/year or four bucks a month from those cuts to city services.
Obviously competitive tax rates and good government matter. I realize that but I think most reasonable people realize that if the goal is to ‘rebuild Saint John’s population’ it is more than a matter of a few percentage points on a tax rate.
Duncan is concerned about property taxes on older Saint Johners on fixed incomes. I am not belittling that and $45 does matter when you are on the margin. But that is almost a social issue – target your tax cuts at a population that is in need. $45/year to the average Saint John household (earning $60k per year and up) is not as big a deal.
The real issue for them is having a livable city with a good environment for raising kids, etc. The issue with the bedroom communities is a larger one having to do with the free rider problem and it won’t be solved by small cuts to a tax rate.