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Ontario Mortgage Deductions are a Bad Idea

Toronto Globe and Mail letter writer Don Coulter doesn't get it.

Yesterday, Lawrence Smith (professor emeritus of economics at U of T) wrote an article in the Globe and Mail about why Ernie Eves' proposed mortgage tax deductions are not wise or fair. He pretty much covers the same territory I wrote about when I first addressed this issue a couple months ago.

Here's Don's letter to the editor:

I would like to respectfully suggest that Lawrence Smith may be out of touch with the financial hardships, caused in part by an excessively high tax burden, that young, hard-working Canadians face. I happen to be one of the "younger, higher-income homeowners" with mortgage debt who will apparently benefit unfairly. To insinuate that the mortgage tax credit is a lavish, unnecessary thing that we should be ashamed of is absurd. I pay more than 46 per cent of my earnings in income taxes, upward of 5 per cent to CPP and 3 per cent to EI. With the pittance of after-tax dollars I have left, I pay more than $3,000 per year in property taxes, thousands in land transfer tax if I decide to buy another home, 15 per cent in combined GST and PST on virtually everything I purchase, and various other "hidden" taxes, such as the gasoline tax. Tax relief is a blessing to those honest Canadians who struggle to make ends meet, and who responsibly want to provide for their families and prepare for their retirement.

Unfortunately, Don's letter shows that Ernie Eves' trick has the potential to be effective in swinging some key voters in winnable ridings in his direction. Unfortunately, it also seems to show that Don simply cannot, or does not want to, understand the clear argument laid out in Professor Smith's article.

Don's entire rationale has nothing to do with whether or not a home mortgage tax deduction is a good thing. Don merely argues for tax relief in general. He does not address any of the specific problems with this particular tax break. The most significant problem is that this initiative unfairly gives a tax break to some people, based on where they live and how they manage their finances, thus shifting more of the tax burden to the rest of us. More specifically, mortgage-holders get a break, and renters, older people who have paid off their mortgages, or younger people who have saved their money and quickly paid off their mortgages all get a kick in the pants.

The fact that Don's letter is entirely unrelated to the issue at hand is a sign... it shows the potential for Ernie to scoop up voters who refuse to listen to reason and instead support any plan that seems to benefit them, while ignoring logic and the plan's costs. Let's hope that after 8 years of this kind of governance, there aren't too many Dons left.



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