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Tuesday, December 09, 2008

Taxation is bad for the market, who'd have thunk it?

The Globe & Mail is reporting on a CD Howe report that says that part of the reason for the real estate collapse in Toronto is due to Mayor Miller's new taxation system. The extra tax on purchasing houses, surprise surprise, has meant that fewer people want to buy houses.

David Miller's crony Shelley Carroll defended this tax by implying that it only hurts wealthy people who are buying homes. Except it also hurts the construction workers that build new houses and condos. It hurts people who invested in construction companies (which would include seniors) and it hurts painters and renovators that are often hired to change newly purchased houses.

It always marvels me, the universe that some people live in. There are people out there that simply cannot see how everyone is connected to each other. How sectors in the economy do not operate in a vacuum from each other. You can't just consider the immediate effect of a new tax, you have to investigate the spin off harm to the economy.

Posted by Hugh MacIntyre on December 9, 2008 in Economic freedom | Permalink


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Everybody here in one of the highest taxed and lowest population based countries in the world realizes that they have to take the significant income tax into account before planning any purchases whatsoever. That includes the purchase of food. The governments know this too, yet they want us to get out there and spend spend spend.
Yeah right, I'll get right on that.

Posted by: JC | 2008-12-09 3:51:55 PM

At least with consumer taxes such as this, people can deliver a direct message of their rejection of the tax by refusing to purchase. With income tax they have no way of doing so other than moving to a different country.

I am not defending this kind predatory taxation whose victim in the end is the economy.

Posted by: Alain | 2008-12-09 6:15:47 PM

Good point Alain but remember that to some extent all taxation is predatory.

Posted by: DML | 2008-12-10 12:11:39 AM

Only a public school victim would need it explained that robbery/theft are predatory. Everyone else knows it instinctively.

Posted by: Duder | 2008-12-11 9:24:16 AM

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