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A Way to Improve the Local Economy Without Raising Taxes

by Daniel Gloade on June 27, 2016

Many K-W residents struggle because they are the working poor working at “precarious jobs”.  This means that they earn an income doing small, temporary contracts.  A small business owner can avoid paying medical, drug or dental benefits.  An employer can also avoid paying Employment Insurance Contributions.   This may seem ideal but one must be mindful of the hidden costs, however.

First, the lack of these benefits make the working poor much more likely to need government assistance such as Ontario Works.  During these downturns the social welfare recipients are a drain on government finances.

The problem is compounded because the working poor may be a poor source of government revenue even when they have sufficient jobs.   Calculation and remittance of taxes for short-time contractual employees is time consuming and/or expensive.  There is a temptation for both the contracting employers and employees to pay “under the table”.

The working poor also has a greater share of their labour to be neither remunerative nor taxable.  These employees must spend more time on job searches and arranging for transportation and child care to take advantage of these opportunities.

It is better for everyone if the working poor have full-time employment.  The working poor, however, must forego opportunities to take improved jobs, however.  The key factor is the ability to commute to work.

There is a recent article in The Record about the inability to commute to work to be a significant factor in raising families out of poverty.  You can read it here.

These articles advocate for greater public transportation.  This includes more bus routes, longer hours and lower rates for the poor.  I don’t believe that this is viable.  It would cost too much and for too little gain.

I believe that a better solution would be to loosen the regulations regarding car sharing for non-profit anti-poverty organization.  These organization can provide an “Uber” transportation to and from jobs.  The government can also finance automobile insurance to these organization to encourage individuals to donate to these organizations.

Finally, the government of Waterloo Region can also provide free or subsidized tax preparation services for the working poor.  It will make it more likely for the working poor to participate in taxpaying.

These suggestions are made from an article from the Ontario Chamber of Commerce called Harnessing the Power of the Shared Economy.  It can be found here.

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