> With sales and income taxes (which can only be levied provincially and federally) governments establish a tax rate, and then see how much money that brings in.
> Each year municipalities decide how much money they need to bring in, and then set their property tax rates accordingly, to ensure they collect the requisite sum. They start from the total they need to raise, in other words, and work backwards to figure out what tax rate will yield that amount.
Because of this "backward" system of tax calculation, if every single building doubled in value, the tax rate will be halved, and the city will receive the exact same revenue.
So if you raise the property tax rate more than what it should "naturally" be, what will you do with the budget surplus? What will you spend it on?
Not necessarily. I've learned that at least in Toronto, the property tax rate is derived from the budget instead of the other way around. Let this article explain: https://torontoist.com/2016/12/how-property-taxes-work-toron...
> With sales and income taxes (which can only be levied provincially and federally) governments establish a tax rate, and then see how much money that brings in.
> Each year municipalities decide how much money they need to bring in, and then set their property tax rates accordingly, to ensure they collect the requisite sum. They start from the total they need to raise, in other words, and work backwards to figure out what tax rate will yield that amount.
Because of this "backward" system of tax calculation, if every single building doubled in value, the tax rate will be halved, and the city will receive the exact same revenue.
So if you raise the property tax rate more than what it should "naturally" be, what will you do with the budget surplus? What will you spend it on?