Last year I made a bad investment decision. I was enthusiastic about a local business start-up, and based on a strong emotional connection to the product, I poured a lot of money into the venture, which ultimately cost far more money than it earned. I was both disappointed and angry when the promises of revenue failed to materialize, but I learned a lesson, became a bit wiser and moved on.
I also recently paid my income tax bill and of course I look forward (yes, I’m being sarcastic) to ponying up a few more hard-earned dollars when the District of Squamish tax collectors send me the property tax bill in a few weeks. The business that I operate also pays a lot in tax each year, so I was left wondering how all of this money will be spent. After some extensive research into economics and taxation theory, a few things became blindingly clear. Here’s what I’ve learned.
People make money by going to work, or from starting a business. Either way, all money flows from business.
In Squamish, the property tax rates for businesses are between 100 per cent (farms) and 800 per cent (utility owners) higher than residential rates. We regularly hear the rhetoric that “business needs to pay its fair share” – it appears they are doing just that.
If we want the district to generate more tax money for water pipes, parks, lucrative pension plans and RCMP coverage, we either need to increase the number of taxpayers or hike the rates that we already pay.
Businesses are very attracted to low tax rates. They are happy to set up shop in areas that offer lower tax rates, assuming they are planning to set up shop in the first place.
In Squamish, local business creates local jobs, which in turn means less commuting to the city and more time for residents to spend their disposable income at other local businesses.
More local jobs from local business equal more people who will move to Squamish to work. Which translates to more taxes for the district, so we get more services for less money (and fewer property tax increases like the hit we all took this year).
I know, it seems simple. And it should be. Tax incentives (as in favourable rates, not giveaways and special backroom deals) work to bring business to town, and that benefits all of us.
There is one more thing that’s really important for all of us to remember. The investment that went bad for me didn’t harm anyone other than me (OK, in the spirit of full disclosure, both my wife and I now agree it was a dumb idea and that we should have bought a sports car).
Taxes, on the other hand, are your money, and anyone who insists you give your money to them had better have a really good plan to spend it on your behalf. I mean really good. So when you write the cheque and hand it to them, ask yourself:
re they really working to make life better for all of us in an affordable and sustainable way, or is it merely going to pay for someone’s blurry, emotional vision as opposed to economic reality?
