Toronto Sales Tax

[W. K. Lis]

Carroll wants "dialogue" on city sales tax

From the National Post:

Councillor Shelley Carroll (Don Valley East), Toronto’s budget chief, today called for a dialogue on new taxation measures for Canada’s largest city, including a possible sales tax.

Ms. Carroll, who is presiding over a particularly difficult budget year at the city, where departments are being asked to trim 5% from their operations, is also mulling a run for mayor.

Although she hasn’t thrown her hat in the ring officially yet, she urged the “men†who are similarly poised to run, to get real about Toronto’s financial morass.

“I’m proposing that we start an honest conversation in this community and we start it today,†she said. “We can’t cut our way out of this problem, we can’t property tax our way out of this problem and frankly we can’t privatize our way out of this problem."

Ms. Carroll proposed the idea of a sales tax for Toronto a day earlier while sitting on a breakfast panel, suggesting something along the lines of those that helped pull New York City and Chicago back from the fiscal brink.

“Chicago has a farebox to run its [transit commission] and a municipal sales tax,†she said. “They don’t come anywhere near property tax. That’s one model. What’s the model for Toronto, let’s be honest and figure out what it is instead of constantly saying cut but don’t cut, property tax but don’t property tax.â€

While she didn’t retreat from the idea, she did seem to be widening the spectrum of new taxation measures Toronto could turn to to address its perennial budgetary crunch, which has traditionally been filled by one-time, stop-gap infusions from the province.

One idea seemed to be a return to the One-Cent Now campaign endorsed by Mayor David Miller to have 1% of the GST returned to cities as stable funding.

Ontario Municipal Affairs Minister Jim Watson today nixed the idea of giving Toronto sales tax powers in a scrum with reporters at Queen’s Park, but Ms. Carroll was unphased.

“I’m not discussing exact percentages because I’m not making a request to Minister Watson right now, I’m making a request to the people in this city who want to discuss its future in an election year,†she said.

Although she denied she was in campaign mode yesterday as she spoke to reporters outside her city hall office, her words did have the vague ring of a stump speech.

The subtext of Ms. Carroll’s speech also seemed to be to position herself as the person doing the heavy lifting around Toronto city hall during a particularly daunting budget year, while many of her potential competitors observe from the sidelines.

“I’m not running for mayor today, today I’m the budget chief of the city of Toronto and I have to balance the budget,†she said. “I’ve been working on that for six years and there is a structural deficit that must be discussed as part of the dialogue in 2010 and I think it needs to start today.

In the United States, cities has their own sales tax. The state sales tax is lower, but the city sales tax is added to it. For example, buy a can pop in Buffalo, you pay a 4% New York state sales tax and a 4.25% Buffalo sales tax. In Niagara Falls, there is a 4% New York state sales tax and a 4.25% Niagara Falls sales tax. New York City has a 4.875% sales tax added. Each city collects a sales tax for their own purposes.

In our case, the Ontario sales tax should be lowered and the difference become a municipal sales tax. So shop in Toronto, pay a sales tax that goes to Toronto to pay for the Gardiner Expressway maintenance. Shop in Mississauga, pay a sales tax to pay for sidewalks. Shop in Vaughan, pay a sales tax to pay for the subway extension. The total of both Ontario and the city sale tax should add up to the current number.

 

[Whoaccio]

I don't think just inserting a VAT on Toronto would really help anyone. It would just incentivize even more people to leave Toronto to shop in the 905. Maybe if the entire region moved onto some entirely new tax scheme VATs should be a component, but that doesn't seem to be anywhere on the horizon. City Hall needs to stop looking for Queen's Park to ride in on a white horse and solve it's problems. Nobody is coming.

EDIT: In principal though I do prefer VATs to real estate taxes.

 

[jn_12]

what percentage of Torontonians are going to leave the city to save 1%? It's absurd to think that someone is going to travel from anywhere inside the fringes of the city to Mississauga or Pickering. Even on a large purchase like a TV, it'd be difficult to imagine someone traveling to save 10 bucks.

If you can point out where this happens elsewhere, you're more than welcome to prove me wrong, but I can tell you that from having relatives in the US where local taxes are the norm, people never take them into consideration when making their purchases.

 

[kettal]

It would only work if every neighbouring municipality is in on it too. If not for practical reasons, then at least for "image".

And I have no doubt that the 905 cities are just as hungry for tax money.

 

[Admiral Beez]

I'll accept that such as tax is needed only AFTER council rolls back their recent self-voted wage increase, and the city employee wage costs are rolled back to match inflation. Otherwise we're being suckered here by a city that just voluntarily increased their labour costs, and now says that they can't afford the costs, so want the city's taxpayers to cover the difference. Where is the leadership at city hall that stands up for taxpayers?

 

[cdr108]

I'll accept that such as tax is needed only AFTER council rolls back their recent self-voted wage increase, and the city employee wage costs are rolled back to match inflation. Otherwise we're being suckered here by a city that just voluntarily increased their labour costs, and now says that they can't afford the costs, so want the city's taxpayers to cover the difference. Where is the leadership at city hall that stands up for taxpayers?

ditto ...

just from the experiences of many during the strike of summer 2009, i would estimate that the city staff is also over-staffed, both management and non-management, by at least 25% ...

we need productivity gains to justify some of the wages, salaries and benefits being given out there.

 

[adma]

what percentage of Torontonians are going to leave the city to save 1%? It's absurd to think that someone is going to travel from anywhere inside the fringes of the city to Mississauga or Pickering. Even on a large purchase like a TV, it'd be difficult to imagine someone traveling to save 10 bucks.

Who knows, there may be people already who travel out of the 416 for free plastic shopping bags, if you get my drift...

 

[taal]

Doubtfull, a lot of chains enforce the 5cent fee throughout the GTA actually - things like grocery stores ... not everyone though

 

[W. K. Lis]

Don't get me started with the 5¢ plastic bag thing. Stores are supposed to supply customers with paper bags, only the LCBO seems to do so.

 

[Long Island Mike]

New York State sales tax rates by county...

WKL: I checked the NY State Department of Taxation and Finance and I found
this page on NYS tax rates. We here on LI (Nassau and Suffolk Counties) pay
an 8 5/8 % sales tax rate as a good example.

See this interesting link:
www.tax.state.ny.us/pdf/publications/sales/pub718_809.pdf

NYS now has deposits of five cents on many plastic water bottles as of this month now. I will mention that "pop" is a midwestern term - we know it as "soda" Downstate and elsewhere in the Northeast Corridor area.

LI MIKE

 

[Red Mosquito]

The 2% deduction in the GST would of been a perfect oppourtunity for the feds to give that to the province, in order to give to the cities. Does anyone think that an extra 4 cents on coffee is going to make or break you? I do agree that all municipalities would have to apply it though.

I will mention that "pop" is a midwestern term - we know it as "soda" Downstate and elsewhere in the Northeast Corridor area.

Here is a good map of the pop/soda/coke/tonic wars in the US.

http://strangemaps.wordpress.com/2008/08/18/308-the-pop-vs-soda-map/

 

[Admiral Beez]

what percentage of Torontonians are going to leave the city to save 1%?

I don't know, but there must be a tipping point for Toronto's taxpayers. If it's not this 1%, and it's not the $60 Miller Tax to register your vehicle, or the land transfer tax, or council voting itself a raise in the middle of recession as well as granting the unions a raise above inflation during this time of economic crisis, then at what point do we expect Torontonians to balk at more fees, taxes and bloated expenses?

 

[nfitz]

Don't get me started with the 5¢ plastic bag thing. Stores are supposed to supply customers with paper bags, only the LCBO seems to do so.

Why are stores supposed to provide with paper? I haven't seen any regulations on this. Personally I find LCBO frustrating ... if you arrive with your car, the paper is fine. But if you travelling by transit or walking, and for some reason you arrive without a bag, they stick you with those horrid free paper bags, and don't even have plastic ones to sell you. You only have to shake the bags a bit, and they start to break apart ...

 

[jn_12]

I don't know, but there must be a tipping point for Toronto's taxpayers. If it's not this 1%, and it's not the $60 Miller Tax to register your vehicle, or the land transfer tax, or council voting itself a raise in the middle of recession as well as granting the unions a raise above inflation during this time of economic crisis, then at what point do we expect Torontonians to balk at more fees, taxes and bloated expenses?

And do what? Leave the city en mass? Rebel?
Quality of life is way too good here for people to rebel against any proposed tax.

 

[GenerationW]

Who knows, there may be people already who travel out of the 416 for free plastic shopping bags, if you get my drift...

You'd be surprised.