The Cariboo Regional District reviews its approach to taxation regularly, to ensure that CRD property owners are treated equitably and our services are appropriately funded. But how do we determine each person's share of the tax burden? Here is some background to help you understand how we calculate your tax bill.
Assessment vs. Parcel Tax
Two important fairness issues are considered when we are making this choice:
- Should a service be user-pay? User-pay systems work great for things such as user fees, licenses, and fees, and goods and services, but it is not an effective method when the benefits are hard to measure or extend to a majority of the population.
- Should we use the tax system to redistribute wealth by taxing affluent residents more than others? An example of this concept would be a progressive income tax scheme, where the more income you earn, the more tax you pay.
In the local government context, we work within the restrictions and legislation enacted by senior levels of government (provincial and federal). The Cariboo Regional District's taxation is based on collecting tax dollars for a specific purpose, with no general revenue fund to redistribute wealth. To that end, we are authorized to use the following four taxation regimes:
- User fees for goods or services
- Parcel taxes
- Taxes based on the assessed value of land and improvements
- A combination of item 1 and 2, or all of the above
To determine which method of taxation the CRD should use for a particular service, the Board takes into consideration whether direct methods, wealth redistribution methods, or a combination of these tax methods will be the most equitable way to collect the required funding.