| I think we're suffering from tax download. The problem is,
this isn't a tax download that anyone else seems to have directly identified;
at least not that I can find.
We seem to have become inured to the fact that crime and criminals are
costing us big bucks. I'm not talking about the increased cost of law
enforcement - that simply isn't an issue. I'm talking about the hidden costs
of things like increased insurance (the big one), deductibles on claims (and
increasing numbers of them), cost of time (and capital) spent double barring
our commercial locations and vehicles, and loss of peace of mind.
The study at:
http://www.aic.gov.au/publications/tandi/ti39.pdf from Australia seems to
count things in gross, hiding the impact to the individual and obfuscating
things with economic theory. I'm talking about what the actual cost of crime
(a crime to me, not necessarily crime in general) is in relation to what I
perceive as the cost of lowering the crime rate enough to lower the impact on
my direct costs.
Direct costs of a crime
I was driving down to the local Costco to pick up some Vitamin C (I feel a
cold coming on and just took the last one in the house) and happened to catch
a discussion on the local (CKNW) talk radio
about crime (do you feel safe around your neighbourhood?)
The thought processes were stimulated when one caller described his
experience with a break-in at his home; alarmed, monitored, and the police
were called - 12:50 on a Sunday afternoon - within 2 minutes of the alarm
being tripped. They (the police) took over 1 hour to attend.
The discussion devolved to the fact that this caller expected to end up
paying the deductible on his insurance (and expected it to go up next time he
renewed) and spend the next year or so getting things back close to what they
had been before the break-in. Being a cost-conscious person in my business
life, I started totaling up what the break-in had cost in terms of time as
well as real dollars.
As a busy business person, I tend to equate my time to dollars, as much to
keep track of how well I do as to make sure that I'm not wasting time (which
equates to dollars) doing things myself when I can get them done "cheaper" by
having someone else do them (probably better too).
| One of the companies I did work for
recently had a number of programmers working on their major software
project. Several of them were using 2 generations old computers with
minimal memory and slow disks to do compiles of the software. In one case
the compiles would take upwards of 1/2 to 1 hour, and bring the poor guy's
work station to its knees while in the process - meaning he couldn't do
other things such as read e-mail, edit documents or source, or whatever.
On the other hand, Stuart, my partner in our software
businesses for the past 10+ years, has always been provided with the
fastest workstation I can find him within broad reason. Even as the
software suites he works on have become more complex, the compile times
have been kept to minutes or even seconds, meaning he can "become one with
the program" and doesn't waste his time waiting for the machine.
The reason: Even at minimal wage ($10/hour) the cost of
having an employee sitting around waiting for the machine to finish quickly
adds up in a matter of days or weeks to the cost of today's fastest
hardware. At what Stuart is worth it is simply lunacy to keep him waiting -
besides, giving him more than a couple of minutes grace means he takes a
break for cappuccino and wastes even more time.
In the case of the employee above, adding an additional
512 Megs of RAM to the slow hardware would (did) speed up the compiles by a
factor of 10 - at a cost of less than one day's wages for the employee!
Think what boosting the processor power (from P133 to P4 2GHz) and the disk
(from 3200RPM IDE to 10,000RPM SCSI) at a cost of about 1 week's salary
would have done. I tried, but the button counters won. The company no
longer exists. |
I look at others in our business in the same fashion, so looking at the
cost of an insurance claim in this light just seems to come naturally.
At a minimum (from personal experience)
 | $500.00 deductible |
| 1 day cleaning up and cataloguing all that is missing |
| 1 day filling in forms at the police and/or insurance office - or on the
phone to them |
| one or more days shopping for replacement items - call it 2 days |
| hours and days of lost sleep in anguish over
irreplaceable items and loss of secure feeling |
Call it a total of 5 days plus the $500. This is so conservative that I'm
not going to bother trying to do more justification. If you've had your home
broken into, you'll understand.
The days are really "days" - time spent during normal office hours - away
from one's job, so eating into one's income. At minimum wage (here in BC,
$8.50/hour) this equates to an after tax loss of (8.5 x 40 x .8 assuming 20%
marginal tax bracket) $272.00
Of course people who make that wage probably don't have insurance so their
loss is total - whatever the thieves took with no replacement, so add the cost
of replacement instead of the deductible. Something between $1500 and $5000 is
my guess.
5 days at my billing rate is $5,000, something like $2500 after tax. Add
the $500 deductible gives something similar - about $3000 after the dust
clears.
The problem is, we've forgotten what the insurance costs - especially in
light of the increased premiums of recent years. Premiums have increased
faster than inflation. In my case, add another $200/year in recent years (and
likely going even higher since 09/11)
Property Taxes and Security
We (my family) used to live in West Vancouver, widely acknowledged as the
most expensive city to live in in North America (not that we lived in the most
expensive part by the way). I was reminded of this recently by Shirley, my
wife, in a conversation about property taxes. Here in Pitt Meadows (no, I
don't own the place) we pay about $1800.00/year property taxes on the house we
are in; a single family dwelling on a fairly large lot and somewhere around
the median of the tax base. In West Vancouver, the house we lived in was worth
something similar to our current one, and the taxes were about 30% higher.
In West Vancouver, the police are local, not RCMP. They are well paid,
there are enough of them, and the crime rate is far less than where we
currently live - you get what you pay for it seems.
The cost of Crime to ME
Put the above together with the average crime statistics, the increased
need for things like burglar alarms, private security guards, car alarms, "the
club", driving my children to school (instead of letting them walk like I did
when I was their age) and a myriad of other changes in life style and
financial impacts, and you have a considerable tax download to my pocket book
(and yours).
So I have to ask myself if it isn't worth paying some more property taxes
(the source of funds for the policing around here) in order to lower my out of
pocket costs for insurance, deductible, lost time and patience.
In addition, I have to ask myself if things like road rage and other
anti-social but not necessarily criminally driven aspects of today's society
might not also drop compared to today if everyone else's indirect out of
pocket lessened and their stress levels went down. Of course their direct out
of pocket might rise - another layer of stress. Is there a balance point?
The point of it all
I ask myself why it might be that those to whom we entrust our overall
destiny - the politicians and bureaucrats - would allow the changes I've seen
in my lifetime with regards to crime and policing to occur. There are lots of
possible reasons, and it is likely that no one particular one is the "real"
reason. The point is that somehow the balance has been shifted, and I for one
don't like the direction it has shifted. Reasons? Pick one or more of:
So... tax download doesn't stop with the local government, it continues
until it hits your (and my) pocket directly.
The major point is: There is only one pocket when it comes to taxation -
that of the citizen (you, me, him, her) - so if our pocket is going to be
picked, we should prefer that it be picked by the "good guys" and sooner
rather than later.
We should be asking for (and accepting that we need to pay for), better law
enforcement and more realistic sentences and (if possible) rehabilitation of
the subversives and criminals in our society (and I for one don't class them
as part of our society). We who are generally law-abiding people in our
society should not be subjected to the likes of the subject of a "police
warning" put out today (March 28, 2003) about a pedophile in Vancouver
released on bail despite the fact that he had breached the terms of a previous
bail and was considered dangerous by the local police force.
We should not have to endure the fact that this or that criminal has a
"rap" sheet that runs to several pages and yet has never been in jail for more
than a month or two at a time - and was picked up while stealing a car to get
to the court house to face his (second) most recent charge.
In short, we need to deal with the problem that is costing us all major
dollars every day, whether we actually are direct victims of crime or not.
I don't pretend to have the solution in hand for this problem. I'm not sure
that there really is one, but my mind says that there has to be a better way.
I see articles in the newspaper about "club Fed" and the penitentiary in
Victoria BC that has a better atmosphere than most of us can afford for a
holiday.
I hear about criminals let out after 2/3 of their sentence because of a law
that says that's all they have to serve!
I hear of convicted criminals that get a fraction of the sentence the law
allows for, despite their being "swinging door" individuals - people who have
been in front of the law more than 99%+ of the population.
There's something wrong with the system and it is costing me (and you)
money, no matter what the actual problem is.
comments? send to richard@pacdat.net |
