Taxes linked to value of house - Metro US

Taxes linked to value of house

Q. Last week, I recei­ved my property tax assessment. I was floored. My taxes increased almost 5 per cent. My supervisor lives three blocks south, yet his taxes did not increase. His nei­gh­bourhood has million-dollar homes, while my neighbourhood has modest homes. It makes no sense that the less we have the more we seem to pay. Why is our tax system unfair? — Ping

A. Most countries, implement some form of taxation to finance the needs of their public sector. To this end, various levels of government, (federal, provincial and municipal) attempt to impose a fair and equitable tax system by employing three principles, taxation based on earnings, wealth and consumption.
The largest source of taxation is from personal income tax. Canada uses a progressive tax system, “the more you earn the more your pay.” Most Canadians, find this fair.
Property taxes are assessed on the value of property you own. The more expensive the home, the higher taxes you pay. Therefore, a house worth $3 million, pays more tax than one worth $400,000 in the outlying suburbs.
Finally, consumption tax is based on the principle of the more you spend, the more tax you pay. Individuals with higher income will have more disposable income and therefore will pay greater tax. Individuals with more disposable income will eat out more, buy more clothes, etc.
As a result, if one government’s tax is not fair to the individual, the other will be fairer. Is this the best system? It is the one we have, and live with.
Ultimately, change rests in the hands of the individual.

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