A report Cap the gap delivered by Janine Carmichael raises the problem of the difference between the municipal taxes paid by owners of small businesses and residents on similarly assessed property, referred to as “property tax gap”. The report contains valuable statistics data of the tax rates and entrepreneurs’ opinions of the current policies which can be recommended to small business owners for enhancing their understanding of the current situation in the sector.
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The report under consideration provides valuable insights into the current procedures of the property value assessment which can be helpful for small business owners in their daily practice. Pointing out at the profit-insensitivity of the property tax policies, the author emphasizes their unfairness, supporting this idea with concrete statistics data.
Thus, according to the data contained in Cap the gap, in 2009, the municipal taxes for the owners of small businesses in Alberta were 1.89 times higher than the taxes for residents (1). The statistics data and concrete figures can speak louder than words and allow the readers to make their own conclusions concerning the unfairness of tax policies.
At the beginning of the report, the author noted that the businesses pay taxes which are much, much higher, but this definition would have been irrelevant and almost useless without concrete statistics data.
The information contained in graphs demonstrating the entrepreneurs’ opinions of the current policies is valuable for creating the readers’ awareness in the issues of municipal taxes unfairness. The comparison of the opinions of small business owners from Alberta, Edmonton and Calgery shows only insignificant deviations and is useful for demonstrating the prevailing opinion of inappropriateness of the existing taxing strategies and the tax gap.
Taking into account the fact that most entrepreneurs criticize the existing tax gap which becomes a burden for most of them, learning the critical acclaim of other small business owners, they will gain confidence in their protest against the existing tax differentiation. As to the figures and tables provided for every separate region, it can be stated that this information can hardly be useful for an individual small business owner.
On the other hand, this data is significant for demonstrating the details of the final tables and establishing the links between the current policies and the corresponding entrepreneurs’ opinions in particular regions. Therefore, most readers would be interested in the data for their region only, but the overall picture is important for evaluating the current state of affairs throughout the country.
Discussion of the main fallacies put into the basis of differentiation between the municipal taxes for small business owners and residents is valuable for overcoming the existing misconceptions promoted by the administrations.
Providing statistics data, the author proves that businesses pay higher taxes, but receive fewer municipal services than homeowners, not all businesses have greater capacity to pay and the so-called tax deductibility benefit cannot compensate for the tax gap. Providing weighty arguments for unveiling these myths used by policymakers, the author can strengthen the readers’ belief in inappropriateness and unfairness of existing tax policies.
The section containing the conclusions and recommendations for the local governments can hardly be useful for individual entrepreneurs. In general, the information contained in the report under consideration can be helpful for creating the awareness of the small business owners in the issues of the municipal tax gap, but does not contain any practical recommendations for them.
Carmichael J. Cap the gap: Pursuing municipal property tax fairness for small business in Alberta. Canadian Federation of Independent Business [Internet]. 2010 June [cited 2010 Sept 18]; Available from https://www.cfib-fcei.ca/en