To Tax or Not to Tax?

Today, Monday October 22nd, is decision day. In July Toronto city council narrowly voted to delay the decision on two controversial new taxes until after the October provincial election. Well, the election has come and gone, with no political party paying much interest to the issue (it seemed to have gotten lost somewhere in the whole faith-based schools saga.) The vote is apparently scheduled for around 9:30 - 10:00 in the morning. Though the "yes" vote seems to be gaining momentum amongst council members, no one is really sure which side will come out on top and reportedly many councilors are still not sure how they will be voting.

But what exactly are they voting on?

Two new taxes are at the centre of this issue. One of the proposed taxes is a vehicle registration tax. If the tax is approved any car owner living in Toronto would need to pay an annual $60 vehicle registration tax. No other municipalities in Ontario pay such a tax. What does this mean for you? Well, if you buy a can and manage to keep it for 10 years you would end up paying an extra $600 in taxes over the lifespan of the car. Motorcycle owners would end up paying $30 a year. David Miller says that this tax would generate $56 million a year for the City of Toronto.

The more controversial of the two taxes, however, is the proposed land transfer tax. It's expected that this plan will change prior to the vote. In July the new taxes were going to work out like this:

• a 0.5% tax on homes under $55,000 (wherever those homes may exist in this city.)
  
• a 1% tax on homes between $55,000 and $250,000
  
• a 1.5% tax on homes between $250,000 and $400,000
  
• a 2% tax on homes over $400,000
  
• a full tax rebate for first-time buyers on homes under $227,000
  

So this is what happens if the vote passes. But what happens if it doesn't? The City of Toronto is facing a $575 million budget shortfall next year and needs to either make more money or spend less. Spending less means cutting services. Everything from public transit, to community centres, to libraries, to ice rinks have been threatened.

Something has to give. And today it will.