By FRED WILSON
Tax Revolt. Like a call to arms,
the cry has captured the

IMagination of beleaguered tax-
Payers all over the continent.

First it was California and the
Sensationalized ‘‘Proposition 13’
that slashed property taxes by 57

“ Percent. The vote in California sent
Shock waves across the U.S. and
already similar propositions are
being campaigned for in Florida,
Maryland, Arizona, Colorado and
Oregon.

And last week, an estimated
1,100 taxpayers jammed a meeting
In Surrey to press for a Canadian
Version of the U.S. tax revolt.

On the surface of it, the backlash
against rising taxes is a cause that
almost anyone could support. After
all, property taxes for the average

ancouver home will push past
$1,000 this year, and the taxpayers
are getting less services than

fore.

But Proposition 13 and the

' Movement itinspired in Surrey are
hot what they seem. Demagogic to
the extreme, these so called revolts

ve promised taxpayers relief
that simply won’t materialize.
ey have for the most part been
led by extreme right wingers who
have capitalized on the popular
discontent with rising taxes to

Capture support for broader anti-
Social policies.

The first voice to echo
Proposition 13 in B.C..was Tory Vic
Stephens who launched a
vociferous attack on ‘big govern-
ment and big bureaucracy’.
Implicit in his attack, as in
Proposition 13, was that property
taxes should be relieved at the
€xpense of social services to the
poor.

Premier Bennett quickly jumped
on the bandwagon but turned his
venom on local school boards,
claiming high taxes are a result of
education spending.

In Surrey, like California, the
organizers of the citizen protest
Were anything but poverty stricken
taxpayers attempting to keep up
with their tax bills. Meeting
organizer Art Thornhill was a
defeated candidate in the previous
election noted for his extreme right
wing views. Bonnie Schrenk, who
Organized a second meeting in
Surrey and has been the main

public spokesman for the Surrey.

8roup, is a former right wing
alderman with long standing links
to local real estate interests.

In fact, both in California and
Surrey, the driving force behind
the seemingly spontaneous protest
are real estate and business in-
terests seeking to cut their share of
taxes at the expense of municipal
Services, social services and
education.

The man behind California’s
Proposition 13, Howard Jarvis,
Was a millionaire industrialist and
landlord. He was the director of
Los Angeles’ landlords
organization, the Apartment
Association of Los Angeles County.

€ co-sponsor of the Proposition
13, Paul Gann, was also a real
_ state businessman.

_ The media throughout the United
States and Canada has worked
Overtime to give the impression
that Proposition 13 was a “middle
Class” protest of homeowners. The
real pushers of it, and its main
neficiaries, however, counted
among the largest corporations in
the state.
_ By cutting back property taxes
n California, Proposition 13 will
trim about $7 billion or 20 percent
of funds for state and _ local
government. Only $2.3 billion of
that will go to homeowners. By far
€.lion’s share will go to owners
of rented residential property (big
landlords), who will get $1.3 billion,
and to owners of commercial and
Industrial property who will get.
$2.9 billion.

The state’s 10 largest utilities
and railroads will benefit by $400
Million next year. It will provide a

Sift of $13.1 million to Standard Oil .

- and $9.5 million to Lockheed.

TAX REVOLT

<>

Proposition 13 hits B.C.—
but it’s not what it seems

Almost every large corporation
in California will have a windfall
from the tax cut. General Motors,
for example, will have its taxes cut
in half, from $2,166,703 to
$1,101,616. Del Monte Corporation
will have its taxes cut by two
thirds, from $1,290,713 to $360,271.

Homeowners, on the other hand,
may find themselves benefitting
hardly at all. Some of what the
California property tax payers will
gain through Proposition 13 will be
lost through increased federal
taxes, which in the U.S. are pegged
to state taxes. The tax cuts will
undoubtedly result in a cut back in
social services, but not all social
services can be cut back. Hikes in
sales taxes, income and other
taxes can therefore be expected.
When its all over and done with,
Proposition 13 will have sub-

stantially shifted the burden of

taxation away from business and
industry and onto the homeowner.

In addition, an estimated 75,000
public employees will be fired in
the state of California due to
Proposition 13.. Municipal services

and transit will suffer heavily —
San Francisco’s transit budget has
been cut by more than half. About
500 seniors centres across the state
are expected: to be severely cut
back or closed. While ordinary
taxpayers will gain the least, the
poor and aged will suffer the most.

If Vic Stephens or the right wing

‘demagogues in Surrey had their

way the same people would suffer
in B.C. while the real estate and
business interests enjoyed a
bananza.

But why are so many
homeowners and small business
people willing to listen to the tax
revolt crowd? The answer to that
lies in the pattern of rising taxes in
B.C.

The first thing to understand is
that the property tax in B.C.
consists of two parts. One part,
which usually takes up about half,
is the school tax, set by the
provincial government. The other
part is the general tax levy set by
the municipalities as the main
source of revenues for municipal
services.

The property tax is only a small
portion of the taxes paid by
Canadians, but because: it is a
direct tax payable only once or
twice a year — unlike the income
tax or sales tax — its psychological
impact is far greater. Actually it
doesn’t even provide enough
money to run the schools or the
municipalities, which require
additional supplements from the
provincial government.

The nub of the problem has been
that the provincial government,
rather than paying more for
education and municipal services,
has been paying less and less,
forcing increases in the property
tax.

Most of the increase in property
taxes has come through the school
tax portion of it. Since the Socreds
took office in 1975 they have hiked
the rnill rate (rate of taxation) for
the school tax by 60 percent. For
1978 the increase will be about 7
percent.

Education is a social cost and
should be borne in the main by the
industries and businesses that
benefit most from it. The
provincial government has been
placing a greater and greater
burden, though, on local tax-
payers. Another $33.8 million will
be taxed our B.C. homeowners this
year, with less money coming out
of corporation or resource taxes.

In Vancouver, for example, the
provincial share of education
financing has been reduced from
$9.7 million in 1977 to $1.7 million in
1978. The local taxpayer will now
pay about 98 percent of basic
education costs in the city, as
opposed to 88 percent the year
before.

Two years ago, the McMath
Royal Commission, established by
the NDP government, recom-
mended that the provincial
government should pay 75 percent
of education costs, phased in over
five years.

A tax revolt a la the McMath
Commission. would relieve local

‘taxpayers of nearly half of their

property taxes. In Vancouver, for

Anti-tax movement leaders avoid

real cause of high property tax

By ALD. HARRY RANKIN

The endorsement by California
voters of Proposition 13 caused
quite a ripple in some political
circles in this province. That’s the
referendum that called for an
annual cut in property taxes from
$12 to $5 billion. Already politicans
in that state are taking steps to cut
expenitures by drastically
reducing all sorts of necessary
social services from education to
garbage collection, calling for
mass layoffs, a freeze in wages
and what not.

Let’s not be under any illusions
as to where this movement
originated. Its prime movers are
wealthy property owners and right
wing mavericks of all kinds. Its
two top officials are the head of the
Los Angeles apartment owners
association and a former advisor to
Governor Ronald Reagan. _

In B.C. too the sponsors of this
movement are right-wing political
red-necks who are hypociritically
trying to capitalize on the justified
‘resentment of homeowners and
small businessmen and en-
deavoring to turn this anger and
frustration against public em-
ployees and against expenditure
for social services such as
education and welfare.

If these people had their way
there would be mass layoffs at
every level of government and
drastic curbs on all social services.
That would further aggravate our
already serious economic
depression.

It’s no accident that the leader of
this group in B.C. is Vic Stephens,
the leader of the Conservative

Party in the province, (or what’s
left of it), and that he represents
Oak Bay in Victoria, undoubtedly
the wealthiest constituency in B.C.
where the homes are posh. Many of
these people are not interested in
social services, they’re wealthy,
they have their private schools,
etc. They don’t want to pay their
fair share of taxes and they don’t
want tax money spent on services
or poor people.

It’s also significant that not one
of the leaders of theis movement to
cut taxes has mentioned the real
cause of high property taxes.

The first and major cause is the
fact the provincial government
refuses to share the lucrative
forms of taxation which it has such
as the gasoline tax, liquor tax and
income tax with the municipalities.
Instead it makes the municipalities

‘dependent on hand-outs from

Victoria and these have been

miserly and stingy. And since .

urban populations continue to grow
and the demand for services
continues to increase, municipal
governments rely mainly on
property taxes to meet their ex-
penses.

The second reason taxes on
homes are high is because big
commercial and __ industrial
properties are often assessed at far
below their market value and do
not pay their fair share of taxes.

The third reason why taxes on
homes are high is because
municipal governments,
deminated as they are in most
cases by business interests, give
concessions and grants to business

‘from the public treasury. Van-

couver city council, for example,
voted to exempt two really big
businesses at the PNE from paying
the business tax and so lost $250,000
in revenue annually to the city.

The fourth reason we have high
taxes on homes is because the
provincial government has been
decreasing its school grants at a
time when education costs con-
tinue to go up.

To look at the cause of high
homeowner taxes is to suggest the
remedy.

We require adequate sharing of
tax revenues by the provincial
government with the
municipalities.

The provincial government must
increase, not decrease as it is now
doing, its grants for continually
rising education costs.

We need a more equitable
municipal property tax system
that will be based on ability to pay.
We need a graduated business tax
so that the small businessman, for
example, will pay a tax of not more
than four percent while the big
businesses will pay 20 percent.

The objective should be to take
all taxes off homes except those
needed to cover the cost of services
supplied directly to homes such as
water, sewer, lights, street
maintenance, fire and police
protection. A home is not a profit-
making enterprise, it is a place to
live and raise a family and to live
in old age. It should not be taxed to
raise general revenues for the
municipality.

example, of $912 the average
homeowner paid in property taxes,
$424 was the school tax. If the
recommendation of the Com-
munist Party in B.C. that 100
percent of school costs be borne by
the provincial government were
carried out, the savings would be
even larger.

The Socreds have skillfully tried
to switch public anger onto local
school boards and have disclaimed
responsibility for the rise in school
taxes. The facts on the contrary
find the anti-social policies of the
provincial government almost
completely responsible.

Most municipalities, however,
have also raised their portion of the
property tax. This too is due to the
refusal of the provincial govern-
ment (and the federal govern-
ment) to pay its portion of the costs
of running municipal governments
by sharing the income tax and the
lucrative gas and liquor taxes. The
recent decision of the provincial
government to dump _ the
responsibility for public transit
onto the shoulders of Lower
Mainland municipalities will likely
result in yet another burden on
property taxpayers.

But rising municipal taxes are
also due to the unequal taxation
policies of right wing municipal
councils which have traditionally
been dominated by real estate and
corporate interests.

In Vancouver, for example,
residential property taxpayers
paid 46.5 percent of all the property
taxes in the city in 1977. Apart-
ments amounted to only 14.5
percent of the property taxes, and
businesses of all kinds paid only
37.8 percent of the property tax.

A whole new system of
assessments and of taxing has
been introduced for 1978, but the
breakdown will be about the same.
What it means is that in spite of the
massive values in commercial
property in Vancouver’s down-
town, False Creek and elsewhere,
the greatest part of the taxes will
continue to come from residences.

For the first time since 1974,
however, all properties in B.C.
have been re-assessed. The pur-
pose of the re-assessment was
supposedly to equalize tax
payments by assessing all land and
improvements at 100 percent of its
market value. It has resulted in
substantial increases in
assessments for homeowners and
small businesses, and while in
some municipalities like Van-
couver, the actual tax increase has
been minimal, in other
municipalities it has hit hard.

The new assessments do contain,
though, minor reforms aimed at
making business pay slightly
more. But it has been small
business that has been hit with the
higher assessments, in some cases
60 and 70 percent higher.

As in the past, large industrial
and commercial properties, where

.the real wealth lies, continue to be

grossly under-assessed.

With homeowner taxes pushing
into the $1,000 range on the average
and small business taxes rising by
a half and more, it isn’t surprising
that 1,100 people turned out to the
Surrey meeting.

Clearly, though, the rax revolt
offered by the right wing
spokesmen in Victoria or Surrey
will do little to assist either
homeowners or small business
people.

More to the point would be a
revolt against the provincial
government to share its enormous
resources with municipalities,
lessening the burden on
homeowners, and a revolt against
municipal governments and the
provincial assessment rolls that
continue to make residential
property pay more than the wealth
producing property owned by the
large corporate interests.

In next week’s Tribune we'll take
a closer look at the rip off of local
taxpayers and the need for a re-
vamped municipal taxation
system.

PACIFIC TRIBUNE—June 23, 1978—Page 3