Taxation and the middle class

[ijmorlan]

Are we really sugar coating a tax hike on behalf if the City?

Anything less than inflation is effectively a tax cut. 1.1% is less than recent inflation, though 2020 may be lower inflation than average. Either way, it's not really a tax hike, it's pretty much a status quo maintenance of current service and taxation levels.

That’s more or less what I’m getting at.

Roughly speaking, the federal government can increase spending every year, forever, by the yearly GDP increase without “raising taxes” (adjusting upwards the GST or income tax rates). By contrast, if a municipality wants to avoid tax “increases” they have to spend the same number of dollars every year. In other words, as inflation progresses and the population increases, they have to cut (real, and especially real per capita) spending.

Personally I don’t have an opinion on what a good level of taxation is. What matters is how worthwhile are the programs on which we spend the tax money. I’d be fine paying 90% income tax if it bought enough great stuff for everybody (including myself) that couldn’t be better provided privately; on the other hand I could hypothetically be unhappy with paying even 10% income tax if I was sufficiently unimpressed with the programs funded by it.