Woolwich & Wellesley Township's Local Community Newspaper | Elmira, Ontario, Canada
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A reminder that the tax well is not bottomless

While parts of the economy have been growing at a good pace, taxes and other expenses have outstripped our incomes, leaving us virtually dead in the water.

Over the past 30 years, average incomes – adjusted for inflation – have remained flat or fallen slightly. In the same period, the workweek continues to lengthen.

We’ve been working harder and harder, and have very little to show for it.

Extra effort doesn’t necessarily make you feel better off and taxes have been going up so much faster than your before-tax income. We’re making less money even before we pay our taxes. Afterwards, we’re even more behind. Despite contributing ever-more to government coffers, we’re getting less in return.

There’s a lesson in there for municipal politicians currently embroiled in budget deliberations.

Waterloo Region got the ball rolling last month, approving a 2.74 per cent increase – 2.27 per cent for regional services and 0.47 per cent for policing – that will add $53 to the average tax bill in 2018. Inflation, on the other hand, is hovering closer to two per cent.

Woolwich council has its sights on a three-per-cent tax increase, including an extra levy for infrastructure projects, the latter perhaps providing some tangible, if overpriced benefits.

Wellesley, always more strained for cash given its much smaller assessment base, is also struggling to keep the rate down.

At other municipalities in the area, councillors are again looking at increases of two or three times the inflation rate. And again, councillors seem unable to explain why they need to help themselves to ever-larger sums of our money – the miracle of compounding no longer works at the banks given the pittance they dole out, but works all too well against us as politicians pad their budgets.

Those who hike our taxes are always fond of pointing out the dollar value of the increase – a hike works out to “only” about $50 or $60 a year to the average homeowner.

Similar arguments are made by providers of hydro, gas, telephone, cable … and the list goes on.

Taken alone, yes each increase is relatively insignificant – most of us can find a few dollars more here or there. However, cumulatively, we’re talking real dollars as everybody, not just governments, looks to take just a little more from us. At the end of the day, we have less money in our pockets than we did last year because most of us have not received wage increases to match the other side of the balance sheet.

That’s where percentages come into play – three per cent here, four per cent there, another 2.5 on that front, and it doesn’t take long to outstrip any pay raise you may have seen, assuming, of course, you saw one any time recently.

Between runaway assessment hikes (courtesy of the rightly much-maligned MPAC) and profligate spending, property taxes have been zipping ahead of household income in many cases – the situation is especially hard on those living on a fixed income. At the same time, fees for services such as water and sewage have climbed steadily, part of a fee-for-use rationale. In that light, ratepayers are getting less even as they pay more in general taxes.

For voluntary expenditures, we can always cut back if the costs grow too steeply. With taxes, unfortunately, we have no such option. In most cases, we’re not receiving benefits in proportion to the increased tax burden.


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