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Wealthy tax cuts 

Coast Exclusive: taxes on expensive properties will be cut, middle-class property taxes will be raised.

Owners of high-valued properties will receive massive tax breaks if a city council subcommittee has its way.

The Tax Reform Committee hasn’t yet adopted final figures for its recommendation, but draft numbers bandied about by city staff suggest that the owner of a $1 million house on Young Avenue in the south end could see the municipal portion of the tax bill drop by nearly $7,000 annually. A half-million house could see a $2,768drop in taxes.

Since the initiative is intended to be “revenue neutral”---total taxes collected by the city will remain the same---at least some owners of less costly houses will have to pay higher taxes to make up the difference.

But asked to provide projections for exactly who would pay higher taxes, the city staffer working the numbers declines. “In fairness, that’s information the council and the public all need to see at once ,” says Bruce Fisher, manager of Halifax’s tax policy division.

By all appearances the proposal is extraordinarily regressive---those most able to pay will receive tax breaks, while people with lower incomes will pay higher taxes. But committee members insist that it will lead to a more orderly, understandable and fairtax system.

Councillors say that citizens increasingly complain about rapidly rising assessments, and therefore higher tax bills.

Moreover, seemingly everyone thinks their high taxes are subsidizing someone else’s low taxes. People in rural areas point out they don’t receive the regular garbage pick-up or bus service urbanites receive. But peninsula residents say their streets were paid for decades ago, and that a snow plow can clear the street where thousands live in the time that it takes to clear just one or two houses in the suburbs.

With those complaints in mind, the committee was directed to move away from the present property assessment-based system and instead adopt a service-based taxation system. In dozens of meetings over the last year, they’ve examined the cost of almost every city service---buses, garbage, recreational facilities, etc.---and have tried to assign the “true” costs to each property.

For example, the cost of providing garbage service to the peninsula is relatively low, as a truck can pick up from lots of houses quickly and the landfill is nearby. In contrast, the Preston area has the highest costs in HRM, as it takes longer for a truck to move through that rural area and then drive over an hour to the landfill. So peninsula residents will see a low-dollar line item on their taxes for garbage, while Preston residents will see a high-dollar bill for garbage.

“Everyone could look at their tax bill and see exactly what they’re paying for,” says councillor Andrew Younger.

The draft numbers suggest that every property on the peninsula and in Dartmouth, regardless of value, will pay $1,272 annually in city taxes. (Provincial property taxesare additional.)

Recognizing that this would cause hardship for many low-income residents, the committee intends to expand the existing rebate program, such that it gives some relief to some people up with up to $38,000 in income.

There’s debate, however, about a proposal to impose a $2,000 “high-assessment tax” on the most expensive properties. Some support it. “I’m paying $5,700 a year,” says councillor Sue Uteck. “Wouldn’t I be delighted to pay $1,272? And I’d be happy to pay a $2,000 social tax on top of that. That’s still $2,000 less than I pay now.”

“We need a system where people understand the costs,” says Younger. “And if we need to subsidize people, through a high-assessment tax or something else, then that’s what we do.”

Others oppose a higher tax on wealthier people or on high-valued properties.

“We’ve been given the direction---we can’t look at the value of the house or the income,” says councillor Linda Mosher. “I’m philosophically opposed to a luxury tax that would help the so-called middle class,” agrees councillor Reg Rankin.

The committee will present its plan to council on March 18, with public hearings to follow. Council will adopt or reject the plan in late summer.

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