Olivia Chow: Feeding Deprived Children On A Home-Buyers’ Dime?

Okay, okay, settle down, class.

By now, you’ve all heard about Olivia Chow’s plan to raise land transfer tax, in an effort to pay for lunches for students who can’t afford them.

Every time I write a blog like this, I run the risk of offending readers, who could be prospective clients, and people always ask me, “Why do you do it?”

Well, I guess my passion for the city, and for freedom of opinion, trumps that of a new client here or there.  But having said that, I’m interested to know what people think of Ms. Chow’s announcement, and I’d like to have a spirited debate on the merits of her initiative…

 

ChowMayor

This is the part I hate about politics.

In order to get elected, you often have to do something big and controversial, or, do nothing at all; completely opposite strategies, that usually take away from the end game: to serve ALL the people.

Take Tim Hudak, for example.

He had one simple task to do, which would have guaranteed him a victory in the Provincial election.  That task?  Nothing!

Like George and Jerry’s “Show about nothing” pitched to NBC during an episode of Seinfeld, all Tim Hudak had to do was keep his mouth shut, promise nothing, give no indication of a platform whatsoever, and he would have won.

All Tim Hudak had to do was keep saying, “Gas plant scandal!” And “Ornge scandal,” among dozens of other catch-phrases based around the Liberals’ corrupt government of the last decade, and he’d have prevailed.

But alas, he couldn’t keep his mouth shut.  He had to promise something insane, like ONE MILLION JOBS, eerily reminiscent of the time NHL goalie Ed Belfour tried to bribe the police in Dallas by offering them “One Billion Dollars,” to let him go free, or Austin Powers asking for “One Hundred Trillion Dollars.”

On the flip side of the coin, we have politicians that identify they cannot win by satisfying the entire voting population, so instead, they find the segment of the population most likely to vote for them in drives, and aim to satisfy it.

Case in point: Olivia Chow’s announcement that she would raise land transfer tax to help pay for school lunches.

Ms. Chow has clearly drawn her line in the sand, and she’s clearly attempting to rein in the “poor vote” (those aren’t my words folks, but that’s what’s trending out there).

When you really break this down, however, it’s a very shrewd move on Ms. Chow’s part.

The increase in land transfer tax isn’t an across the board tax, but rather a “one point hike” for the overall sliding scale.

According to reports, Ms. Chow is suggesting that people purchasing a house over $2,000,000 pay an extra 1%.

Apparently, this would only affect 500-600 home buyers per year, so Ms. Chow, in theory, is only losing 500-600 votes.

It’s a great move on her part!  She turns away 500-600 voters, who to be perfectly honest – if they could afford a $2,000,000 house, there’s no way they’re the “type” to vote for Ms. Chow anyways, and in the process, likely gains support from tens of thousands of underprivileged families, who can see a tangible difference in political policies in the form of food for their beloved children.

It’s political genius, in theory, that is.

But is Ms. Chow really trading 500-600 votes straight up for 20,000 – 30,000?

If only the people directly affected by the increased tax and the free lunches changed their political stances, then yes, this works.

But in my humble opinion, I think this announcement from Ms. Chow, while valiant and bold, will end up serving as the desperation move she needed to make, when we look back at John Tory’s victory in the fall.

I think there are a lot of undecided voters out there, who today said, “Olivia Chow is going to do WHAT?” who now got a glimpse of what she’s capable of, where her political views lay, and ultimately that she really is a hardcore socialist at heart.

And yes, I’m using that word again: socialist.

Somebody suggested after Friday’s post that I stop using that word, and that I don’t know what true socialism is.

But explain how this Robin Hood political office – where the government takes from the rich and gives to the poor, isn’t based on socialist ideals?

Consider the uninformed voter, of whom there are many in Toronto, who hears buzz words like “land transfer tax,” but doesn’t really understand what that is, or how it works.

Now consider that all the chatter over the past four years has been about reducing the tax, and Olivia Chow came out today and said she would RAISE the tax.

That’s enough to make the average Torontonian say, “Huh?  She’s going to do WHAT?”

I’m sorry to say, but the uninformed vote is massive!

Remember when Rob Ford went for that photo-op at the park whose construction he voted against?

FordJungleGym

And now remember all the Torontonians interviewed by the various news channels – made to look foolish when they lauded Rob Ford’s efforts, only to be told that Ford, in fact, voted against the project?

Don’t ever underestimate the power of the uninformed in elections!

So yes, I think that there are a lot of folks out there that will hear the words “Raise Land Transfer Tax,” and wonder what Ms. Chow’s agenda is.

I think we got a pretty good idea of that on Tuesday.

So let me ask you all a simple yes-or-no question, and since you’re all anonymous, feel free to answer honestly:

Is it fair to ask the 500-600 buyers of $2,000,000+ homes each year to come up with $20,000,000 to feed 36,000 children?

It’s a simple question, and your answer should fly out of your mouth without hesitation.

I honestly believe that each and every one of you have an answer to this already, based on your political, economic, social, and socio-economic beliefs.

Or maybe your answer depends on how the question is posed:

1) Should there be an increase in land transfer tax in Toronto?
2) Is it fair to ask the 500-600 buyers of $2,000,000+ homes each year to come up with $20,000,000 to feed 36,000 children?

Would your answer differ if you were asked both questions?

Perhaps for some of you, your answer would differ if the proposed increase in land transfer tax directly affected you or not.

Perhaps if you were looking at the purchase of an $800,000 home today, you might shout “down with Chow” when you sign the offer, but had you heard that the increase in land transfer tax would only affect those buying over $2,000,000, you wouldn’t care less.

This is where I think the mistake could be made.

I’d like to think that I don’t always look at issues in terms of how they affect me directly, hence my constant clamouring for massively increased public transit, despite the fact that I haven’t been on a streetcar in five years.

So if you’d have no problem with an increase in land transfer tax for houses over $2,000,000, but you would have an issue if the tax was across the board, from $0 to infinity, then I think you need to dig a bit deeper.

My main issue with the land transfer tax has always been that it’s exceptionally punitive to those who are buying houses.

It’s not punitive to those that own houses, or those that are renovating houses.

But to tax the transfer of a house, which the buyer pays for anyways, has always seemed arbitrary to me, and the amount of the tax is utterly insane.  Consider a $2,000,000 house, which currently comes with a $36,475 Provincial LTT and a $35,725 Municipal LTT.  Under Ms. Chow’s proposed changes, that Municipal LTT would increase to $55,725, for a total of $92,200 total LTT.  Isn’t that insane?  It costs you $750 for the moving truck, and $92,200 for the right to move.

The numbers are simply staggering to begin with, for a tax that I personally believe is arbitrary, but under the proposed changes, the numbers are downright silly.

So if we do need new tax revenue, and we do need to increase a tax somewhere, and if we absolutely, positively, have to increase taxes where homes are concerned, then for the love of God: raise property taxes across the board.

This is what I just don’t understand.

How can anybody suggest raising land transfer tax, which was already doubled a few years ago, when the simple, not to mention FAIR solution, is to increase property taxes?

Well, the simple answer, is that everybody who owns a house would be upset with Olivia Chow if she suggested we increase property taxes, since everybody that owns a house would be affected!

But if we simply increase taxes for the 500-600 folks who are seemingly made of money, then every other property owner remains happy.

Should we mention that Toronto has perhaps the lowest property tax rate of any large municipality in Ontario?

Perhaps that should factor into the discussion when property taxes are concerned?

I picked ten municipalities at random and researched their tax rates, then threw Toronto’s tax rate into the mix.  Guess how they line up?

St. Catharines – 1.48%
Hamilton – 1.39%
London – 1.37%
Niagara Falls – 1.37%
Waterloo – 1.18%
Brampton – 1.13%
Burlington – 0.91%
Mississauga 0.91%
Oakville – 0.87%
Milton – 0.78%
Toronto – 0.72%

That’s right, folks!  Toronto has the lowest marginal tax rate of the group.

Now I’m not ignoring the fact that Toronto also has the highest property values of any city on the list, or anywhere in Ontario, but we’re the largest city, and the most complicated to run.  We seemingly have the most services, and definitely the most employees.

So why then do we have the lowest marginal tax rate of any major municipality in Ontario?

If Olivia Chow wants to raise taxes, then she should raise property taxes, and not land transfer taxes.

It’s that simple to me.

I believe that with her announcement on Tuesday, she’s shown that she is officially taking sides, and playing favourites.

What if John Tory said that he wanted to round-up the homeless, and strap them to rickshaws, because “They’re not doing anything else“?  (Seinfeld reference, FYI.  Neither me or Mr. Tory are that cruel…)

What if David Soknacki said he wanted to increase income tax for single mothers, and use those tax dollars to purchase better signage for the Toronto Yacht Club?

I know that politicians have to take stances, and they have to make hard decisions, but Toronto’s land transfer tax is not a never-ending stream of income that politicians can continue to feed off of.

If Olivia Chow wants to raise taxes to pay for school breakfast programs, then listen to me here and now: I am 100% for it.

I suppose the topic of why PARENTS are no longer responsible to provide food for their children is a topic for another day, and don’t suggest that they can’t afford it.  Bread is $1.99 a loaf, peanut-butter is $3 per jar, and that $5 can make ten sandwiches for little Billy…

Ah, darn.  I said I wouldn’t get off topic.

So yes, I’m 100% for increasing taxes to pay for what parents should be providing anyways (there I go again…), and helping children get the start they need in the morning, and the boost they need at lunch.  I’m happy to say that Bosley Real Estate has been involved with the children’s breakfast program at Thorncliffe Park P.S. for the last five years, and I know that Keller Williams has been involved too.

I’m not suggesting this isn’t an important topic, but I am suggesting that Ms. Chow is going about it the wrong way.  We do need to provide for our children, as Ms. Chow suggests.

But not through raising the land transfer tax for luxury homes, and I’m not just saying that as a Realtor.

I’m speaking as a voter.  Plain and simple.

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Hamed Fardad

Hamed Fardad

Sales Representative
CENTURY 21 Percy Fulton Ltd., Brokerage*
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