Friday, December 02, 2011

Native Housing: Perverse Incentives

Most government's try to limit their citizens ability to take advantage of tax havens. Not, Canada. The Canadian federal government provides incentives for a certain class of citizens to stay or move to various tax havens and it backs up its promises with an ironclad guarantee. Specifically, the feds hold out the promise of free housing, a promise pay for upkeep and the promise of never imposing not only no income tax or sales tax, but also no property tax. The federal government will pay for any needed infrastructure. Of course, the reality is less rosy than the brochure makes it seem. Realizing the patent absurdity of its ironclad guarantee, the government drags its feet, provides the bare minimum level of funding for housing, upkeep and infrastructure and to, add insult to injury, proceeds in less than timely matter. In other words, the government has every reason to create living conditions that repel even as its promises attract.

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