In the pantheon of preposterous policy proposals, this pips the pack to the post. Frances Nunziata is floating the idea—I kid you not—of a raffle to close the city’s budget gap.
Speaking to the Sun, Nunziata suggested a city lottery.
The mind reels.
There are a few reasons why this just might not work. First, the province has a monopoly on lotteries, so Toronto would be cannibalizing Ontario’s finances. Every cent spent on Toronto tickets would come out of Ontario’s cash.
Perhaps Toronto’s tickets would generate new income. If so, and if the province agreed (these are huge ifs), the tickets would draw money disproportionately from the poor and the uneducated; both communities spend a larger share of their income on lottery tickets.
Nunziata says that New York City has a lottery, and we could too. But if there is a Big Apple ticket, your correspondent cannot find it. New York State does, however, have many. There may be good reasons for this; lotteries require administrators. Small lotteries would have to give a larger share away. Why a fiscal conservative like Nunziata would like another government department remains an unanswered.
Surely we can do better.
Let me propose an alternative: tax the lucky. I get several real-estate pamphlets in my mailbox daily, encouraging me to sell. I bought my house 10 years ago, for about half of what I might get now.
About 100,000 homes will be sold this year in Toronto, and the city has an annual cash crisis of about $100 million. Raising the land transfer tax from 2.0% to 2.2% would raise about $200 million, but cost each home seller only $2000. Charging foreign buyers a 15% tax could raise much more—about $750 million would be up for grabs.
These taxes would also cut down on my junk mail dramatically.