Marketing & Communications

The “Tax Ratio” fallacy

(this is an extension of the Kingston Tax Rates page)

Tax-ratio fallacies are the first and greatest refuge of the Tax Whiner.

But what’s wrong with tax-ratio arguments?

TLDR: they’re vanity metrics.

We get jiggy with the logic below.

Why tax-ratio arguments are fallacies

So you’re chatting with somebody who has a compelling statistic. The city has higher taxes per person than another place, for instance, or a higher average amount paid per income, or… well, it could be anything, really. Taxes versus square kilometre of territory. Taxes per number of dwellings. Taxes per total number of daschunds. Taxes per average height of a citizen.

Ultimately, tax ratio arguments, “our taxes are the highest or lowest per ______________”, are kind of like IQ tests. If you have a great score, you can feel really good about it, and it’s fun to brag about at parties, but for any practical purposes, it’s trivia.

Explaining why it’s trivia takes a bit of math and a bit of civics and a certain amount of “if A, then B” logical thought. Oh, and just a smidge of Greek mythology. Buckle up!

Let’s start with a question of control.

There’s one element under municipal control, as far as taxes go: what they charge. Their rate.

Where does that rate come from?

Here’s the math part; it’s a pretty simple two-part formula, but worth repeating:

Part one:

municipal servicesxcost=revenue required

Part two:

revenue required/taxable assets in your territory=tax rate

This is grossly oversimplified and doesn’t take into account a lot of things, but it’s a napkin sketch of how taxes happen.

So why is this important to know?

The key thing is to look at this using common sense.

To manage a situation and to effect change, you have to look at what is under your control.

In the municipal case, it’s “services”.

The outcome of the two-step equation is “tax rate.”

You can truncate this relationship to

servicestax rate1

What isn’t in this equation?

Everything else.

It doesn’t account for population size*, or local income, or the number of weiner dogs in the territory.

*except to determine the scope of services it needs to provide above, but you knew that.

Why can’t it?

The better question is “how could it?”

It can’t, for a number of pretty common-sense reasons, chief among them this valuable bit of context:

Large municipalities require planning.

Municipal organizations are complex networks in charge of life-sustaining services, and planning happens (or should happen) on a scale of years to decades, not days to weeks.

Major infrastructure like water, roads, and waste needs to be planned and maintained. Large numbers of service groups like police, fire, garbage, and utilities need to be hired, trained, and managed. Parks and sporting infrastructure needs to be maintained. Finances have to be meticulously kept. Public transit needs to run. Tourists need to be attracted.

These aren’t “snap decision” kinds of areas, and when cities see disaster, it’s usually because somebody with a “runs like a business”2 mentality has tried to apply what is perfectly sound thinking for running a bait shack to running a municipality. The systems aren’t compatible.

So what happens when you try to apply “taxes as a percentage of average income” or other ratio-based arguments to a discussion about municipal taxes?

You’re introducing trivia to the conversation in the form of non-actionable information.

We’ll use “average tax paid, as a percentage of income” as a f’rinstance, but this applies to any ratio model, including square km, number of people who own ducks, total count of refrigerators – any datum that can provide a number to put on the right side while taxes are on the left.

So you’re talking to somebody that says “this town’s taxes are out of control! We have one of the highest average taxes paid, compared against income! Why, 5% of a citizen’s average income goes to taxes, and the average across the province is only 4.8%!”

To be fair, that legitimately sounds outrageous if you don’t think about it very much.

But let’s invest some thinkin’ time.

First assume good faith, and that the person in question is actually trying to have a helpful conversation and not just kvetching.

The key question becomes:

What, in this scenario, is in the municipality’s power to directly change?

They can’t increase local revenue (well, not directly*). Unlike the above equation, which starts with “services,” this is the ratio argument equation:

average income/taxes paid=taxes paid per average income

In the first equation, we started with “services”, which municipalities control. “Municipal services” is the starting point in a linear path to “tax rate.”

But here, there’s no municipal-adjustable equivalent. Even with the very best wishes and a spectacular wizard hat, municipal government can’t magically increase local revenue.*

They can adjust tax rates, but as we’ve shown above, tax rates are a direct derivative of services, and as the clear-eyed have noted, “services” represent a vast range of things that are more like a cruise ship than a unicycle – they take forethought, vision, and long-range planning to manage effectively. Radical changes to services to immediately slash tax rates generally read as “panic” and don’t end well, as a rule. “Income has fallen 0.5% so let’s not have police for three months” is not a great way to run things.

In the “average income” flavour of this argument, a good question to ask is “does the municipality charge income tax?” and if the answer is “no,” the follow-up question “so what does income have to do with our tax rate, exactly?” will usually flip the light switch.

*”Municipal government can’t increase local revenue” is actually not entirely true.

Municipalities make a huge difference in local revenue by making themselves attractive to new citizens, tourism, and employers. How do they do that?

By having great communities where people and businesses want to be, which requires fun things like good water, functioning sewers, police and fire, etc. These are “services,” and they’re what drive taxes. So if you want your tax-to-revenue ratio to improve – even though it’s a vanity metric – you should actually want to pay taxes for world-class services, to attract people and businesses, and improve revenue.

But they can’t directly affect total revenue, which is kind of the whole point.

Anyway, the above applies to any argument that relies on the forumula

tax rate/[VARIABLE]=tax rate per [VARIABLE]

whether it be average income, counting women named Barbara, total km of city streets, number of babies born per year, etc.

All right, sooooo…

So when you stake your whole argument on one of these ratios, you’re not actually complaining about taxes any more. You’re complaining about [VARIABLE].

And it’s all well and good to think that there aren’t enough daschunds in the city, or homes cost too much, or homes cost too little, or people don’t make enough money, but at that point you’re essentially saying [VARIABLE] is a problem, but you still think you’re upset about taxes, because you don’t understand how taxes work.

To put it another way…

The tax ratio fan can’t argue that the taxes aren’t fair (in Kingston’s case), because they are. That’s just math n’ geography. They’re upset about [VARIABLE], but they don’t really understand that [VARIABLE] is the problem… not the taxes.

So what’s the problem with these ratio arguments? They’re silly, but harmless. It’s just trivia, right?

Meh. One problem is that they get people who don’t have a firm grasp on math or civics all ginned up about something that doesn’t ultimately mean anything, which is a huge waste of energy and helps propagate a pervasive I-read-half-an-Ayn-Rand-novel “taxation is bad” fallacy that erodes a general understanding of civics. Shutting these things down helps foster a nuanced understanding of how society functions.

More practically, the ratio arguments also passively promote a model where municipalities should, say, continually adjust rates according to chicken count or total number of Dairy Queens or average income or people’s heights; they have the gloss of facts, but when you think about the facts of civics and the math underlying taxation, it’s a bonkers worldview to put forward.

Consider the kind of government you’d need to run to index crucial long-term service decisions based on the number of people named “Dave” in your catchment, which changes weekly (Daves come and go). But then somebody complains about the daschund ratio, and then the average height, and then, and then, and then…

If you don’t pay much attention, the ratio arguments are compelling, and next thing you know you’ve got a mayor who wants to “run things like a business” and ten years later you’re wondering how everything went to hell and why you’re on a boil water advisory.

So it’s worth time and energy to shut tax ratio arguments down as meaningless. Hey, I wrote this whole thing! Clearly I think it’s worthwhile.

So ratio presentations of taxation are useless?

No! They’re fun trivia, as mentioned above. If you’ve got, say, the lowest taxes paid per total number of swans in the city’s pond, you can put that on your website and the easily gulled will think you have low tax rates, regardless of what your tax rates actually are. You may have the highest tax rates and also the highest number of swans, but a sucker is born every minute.

The results can also derive some interesting ways to look at [VARIABLE], as long as it’s clear you’re on an investigation of [VARIABLE].

If you find Greek gods named “Zeus” are taxed more than anywhere else in the country, for instance, you may want to see if the Greek goddess Hera is working in your tax office.*

*That’s the Greek mythology, folks! Don’t forget to tip your waiter.

But tax rate is still the only rational metric of whether a city’s taxation is fair?

Yes. It’s pretty straightforward. Again, it takes a bit of math, some civics, and… well, honestly, you didn’t really need the Greek mythology. But it’s fairly linear after all.

Back to the Kingston Tax Rates page!

1. A good test of “is my municipal government doing okay?” is to inverse this relationship. If the tax rate is fair, relative to comparable other places, and the services are adequate, the city’s doing a good job. If the tax rate is out of step with other municipalities, or the services are dismal, the city’s doing a bad job. In Kingston’s case, the services seem good and the tax rate is fair (see previous page), so I deem the City do be doing okay. There are always things to improve, but taking to the ramparts about taxation is a non-starter and a waste of everyone’s time.

2. One more time… If somebody’s answer to “should government be run like a business?” is anything other than “no, that is insane, a business’ ideal model is to maximize benefits for a tiny number of owners or shareholders, and a government’s ideal model is to maximize benefit for everyone, which is literally the exact opposite, so while it’s fine to say governments should pursue efficiency or not be wasteful, business is a ludicrous model, governments should be run like very good governments, and you should feel bad for even asking that question”, you can safely ignore anything they have to say about government, civics, economics and politics. Send them to this page and if they call you a “snowflake” or a “Neo-Marxist,” tell them I said they owe you a quarter.

Kingston, Ontario Taxes

Are Kingston taxes higher than those in comparable cities in Ontario?


Exhaustive research below.

Really? Somebody online insists that they’re, like, the highest tax rates anywhere ever.

S/he’s wrong. Probably also says things like “government should be run like a business”.1


Let’s start with “what’s a comparable city?”

Population size is the clearest metric here. Nothing else really makes sense. A tiny village isn’t a fair comparison. Nor is a borough of a major city, nor is a city more than twice Kingston’s size. Size matters. Municipal taxes pay for municipal services for the population the municipality serves. Something weird seems to happen with taxes for all mid-sized cities, too (see below), which makes comparisons that don’t account for this doubly inappropriate.

In short, population size is the common-sense metric for determining “comparable” in a tax scenario. But hey, if you don’t like population size, there are two other ways to measure this below. Stay tuned!

Setting a comparative range based on population size

From the 2016 census (via Wikipedia

Kingston’s population is 123,798.

15 municipalities is a reasonable basis for comparison, so let’s move up and down seven slots on either side of Kingston:

Thunder Bay107,909
St. Catharines133,113
Greater Sudbury161,531


What’s our basis of comparison?

We’re using “Residential”. If there are varying rates by region, we’re going to use “Central” or the closest equivalent. All rates from 2018.

All amounts are per $1000 evaluated. Links to the actual tax rates are next to the city and amount. First, here are the municipalities again ordered by population size:

MunicipalityTaxes per $1KSource
Thunder Bay$15.1
St. Catharines$14.3
Greater Sudbury$14.4

Where you might expect to see a correlation there – especially since large centres like Toronto and Ottawa have rates closer to the Milton end of the spectrum – there doesn’t seem to be much of a ratio mapping population size to tax rate.

Sorted by amount:

MunicipalityTaxes per $1KSource
Milton$ 6.90
St. Catharines$14.30
Greater Sudbury$14.40
Thunder Bay$15.10

So in the end…

Kingston is #9 on the list of 15. From the dead middle of a list of 15, it moves up one place in that same list.

So Kingston doesn’t have astonishingly high taxes when compared to other Ontario municipalities of similar size?


Kingston’s tax rate is proveably and conclusively average?

A smidge higher than average but not even in the top five in its weight class.

Why are mid-sized city tax rates higher than those of megacities and tiny towns?

It’s an interesting thing I noticed while working on this. Major centres have much lower rates, as do tiny towns. I don’t know why for a fact, but my theory is that mid-size cities have all the fiscal disadvangages of large cities – obligation to provide city water and full services, a cultural life that needs to be supported, sophisticated transit and library systems, and sports infrastructure – without the economies of scale that kick in once you’re at the million-citizen mark. Small towns don’t have to do this at nearly the same scale. There’s probably some soft population number at which these things spike, and another where they drop again.

Milton, for instance, is our outlier here. The suspicion is that as essentially a borough they can lean into Toronto as a sports/culture/transit mecca, so they can offer a dramatically lower tax rate than some of their peers in size. The other cities on the list are “standalones”, and essentially are providing Toronto-level services but to much smaller populations.*

Again, that’s just a theory. If you’ve got facts, I’d love to update this page.

A reader, connected to somebody once in Milton’s municipal services department, provides some context: “Milton has been able to get away with not providing (and paying the full freight for) what we might call a mature suite of municipal services for a number of reasons, and the current mayor (now Canada’s longest-serving, at 13 terms) takes it as an article of faith that property taxes shall not rise for any reason (more or less), and he will likely be re-elected until he’s carried from his office….the other thing to note about Milton is that it also has a municipal tier above it (the regional municipality of Halton, which, pending the provincial review of regional muncipalities, may or may not change dramatically), so certain costs are shared out between municipalities large and small within the region (e.g., Halton Regional Police Service).”

Let’s try a different comparison method! How about similar-ish cities?

Sounds great! This time, let’s map Kingston against cities that might be less similar in population (we’re still excluding places that are less than 30% as big, or over 200% larger) but share most of Kingston’s key attributes:

  • A large and dynamic downtown
  • Multiples of various ‘city’ indicators – movie theatres, sports complexes, schools
  • At least one major educational institution (a university or two or more colleges)
  • Well developed tourism infrastructure

To make this list, I reached out to a number of people – Tourism Kingston, the City of Kingston, and Kingston Economic Development. They have a firm sense of the city and who our “competitors” are. With their help, I arrived at the following list:

  • Guelph
  • St. Catharines
  • Barrie
  • Sudbury
  • Kitchener
  • Waterloo
  • Muskoka
  • Cambridge
  • Sault Ste Marie
  • Peterborough
  • North Bay


MunicipalityTaxes per $1KSource
Sault Ste Marie**$13.60
St. Catharines$14.30
Greater Sudbury$14.40
North Bay$14.60

*Muskoka is an interesting case, where it seems there’s a regional tax rate and then a town rate that attaches to that. Huntsville, one of the towns, comes in at the middle of the tax rates and incorporates the regional rate into its own. I think. It’s a bit hard to understand. It might be as high as $17.40 if Muskoka levies an additional bill to the town bill.

**A tie!

How does Kingston do in our second test?

Here, Kingston is just under halfway down the list – 6/12 (I’m awarding it the tie with Sault Ste-Marie, because who can honestly say they’d prefer the Sault?).

So in two tests vs. comparable cities or municipalities, Kingston is… average?

Slightly over in the first, slightly under in the second.

Comparisons by average home price

This is a toughy. It involves doing a ton of clicking around on the CREA National Price Map (, and even that gives huge areas, not specific municipalities. So “Kingston” covers what I think of as Kingston, but also includes Napanee, Gananoque, probably Yarker, possibly Pontypool, etc. “Oakville-Milton” is insane because it has a bunch of boroughs in its catchment and is even more expensive than the GTA region. I can’t find a source more granular than this.

So this really is fudging something in search of a better way of doing it, but without home price averages (ideally for single-home residences, to align with our tax category) for individual municipalities instead of huge catchments, it’s hard to find a better way.

So here are average real estate prices circa February 2019:

MunicipalityAverage real estate price
Barrie & District$458,600
Durham Region$576,702
Greater Toronto$767,800
London & St. Thomas$394,121
Niagara Region$393,500
Thunder Bay$219,458

They’re big regions, so let’s just grab three on either side for a field of seven:

Seven regions with comparable average real estate prices to Kingston

MunicipalityAverage real estate price
Niagara Region$393,500
London & St. Thomas$394,121

And, I don’t know, the most comparable city in each region for…


MunicipalityTaxes per $1KSource
St. Catharines$14.30
Greater Sudbury$14.40
St. Thomas$15.30

*I’m not thrilled about it either – it’s too big a city to be a valid comparator – but since Mike Harris jammed mega-mergers down everyone’s throat a while back, we don’t have the sensible comparator, Nepean, to stack against.

**Ottawa doesn’t post its tax rates! It’s the only city that doesn’t seem to do that.

***Another tie! Again, I’m going to give it to Kingston, because, I mean, Trenton.

Where does Kingston land this time?

When you stack the most comparable cities in the regions with the closest average real estate prices, Kingston is second lowest in a field of seven for tax rates.



That’s three different ways to compare Kingston fairly to other places and see how the tax rates stack up.

It is indeed.

And just one last time: Kingston doesn’t have amazingly high tax rates compared to similar municialities?

One last time: nope. Squarely in the mid-range. Low, by some measures.

So will these Actual Facts stop all the complaining?

Oh, my sweet summer child, no. Tax Whiners tend to wind up in a Venn diagram that strongly overlaps with people that say things like “the facts don’t care about your feelings,” so one might expect that exhaustively researched facts will keep them from repeatedly venting their feelings, but I’m… not optimistic. I’m probably going to get called a “Neo-Marxist” by people who don’t know what Marxism is. Yes, that’s a whole thing now.

Hey, that Internet Person is now going on about tax rates per capita / tax rates per income / tax rates per building / whatever.

Ugh. The ratio fallacy. It’s a kind of a combination of a lack of math and a not-great grasp on civics. That takes quite a bit of unpacking so I’ve put it on its own page.

1. If somebody’s answer to “should government be run like a business?” is anything other than “no, that is insane, a business’ ideal model is to maximize benefits for a tiny number of owners or shareholders, and a government’s ideal model is to maximize benefit for everyone, which is literally the exact opposite, so while it’s fine to say governments should pursue efficiency or not be wasteful, business is a ludicrous model, governments should be run like very good governments, and you should feel bad for even asking that question”, you can safely ignore anything they have to say about government, civics, economics and politics. Send them to this page and if they call you a “snowflake” or a “Neo-Marxist,” tell them I said they owe you a quarter.