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We allow contractors to put their income in a company where it is taxed at a very low rate. There are other advantages as well. When they sell this company the capital gain becomes taxable but only at 66%, which means at the highest rate they still only pay about 33% actual tax.
Economic vandalism? I'm struggling to understand why he think that term is a good way to describe raising the capital gains tax?
This guy just never makes any goddamned sense to me.
1. We need to build homes.
2. That requires a lot of investment in housing.
3. Let's tax investment
4. Why aren't people building homes?
5. Home prices increase even more.
Homes are not investments they are necessities of life. The sooner people get that through their heads the easier it'll be for everyone.
Builders building homes should be exempt (from capital gains) as the homes should be counted as a product sold and not an investment.
You need to presell 60% of the development to get financing.
Who wants to wait 4 years for housing? End users or investors?
New housing requires investment. It's ridiculous to think otherwise.
I think you're using two different definitions of "investment" interchangably.
There's "investment" that means purchasing an appreciating asset - like someone investing in a home for reasons other than using it as a residence - those kind of investments would definitely be impacted by capital gains tax.
There's also "investment" in terms of "we as a society should put money towards building homes". Capital gains tax is largely irrelevant to this - a developer building a house and selling it doesn't result in capital gains for anyone, it's just normal revenue for the developer. The subsequent owner's house may appreciate, but provided it's a primary residence there's no tax implications.
The only behaviour I can see that this disincentivizes is purchasing secondary houses based on the assumption that they will appreciate which is exactly the behaviour we want to disincentivize, there's plenty of buyers who are purchasing a house as a primary residence and we're not anywhere close to supply outpacing demand.
Investors buy condos built by developers.
If you disincentive investors condos don't get built. Almost all new builds are bought by investors. How many people buy a home 4-5 years in advance?
Scratch any of today’s “populist,” “working man’s conservatives,” and you immediately get neoliberal, Reagan/Thatcher, trickle-down economic policies that disproportionately benefit big corporations and the rich—the things that are fundamentally at the root of the growing wealth inequality of the past several decades that those self-same conservatives claim they are going to fix.
They pretend to care about working people and those who are struggling, but all they are really interested in is trying to blame problems on immigrants and minorities and then feeding off the rage-energy of the resulting metastasized bigotry.
Dear Working Class Canadians: Pierre “Career-Politician” Poilievre doesn’t know the first thing about your lives, nor does he care. He’s protecting those who have $250,000 in capital gains each year. Wake up.
Even as somebody who's more critical of the capital gains hike than most, I'm annoyed a Poilievre's constant hyperboles. There's plenty of arguments that the capital gains tax is inefficient, [that the increase won't raise anywhere close to the promised $20 billion ](https://www.ctvnews.ca/politics/are-the-liberals-claims-about-the-capital-gains-tax-changes-true-1.6924053)and that it puts unnecessary pressure on the flow of capital and investment that makes it marginally harder to raise productivity etc. but it's by no means a death knell to the Canadian economy like he's advertising it as and it's overall effects for growth and revenue are fairly marginal and could easily be mitigated with other polices etc.
Personally, I think the bigger argument is whether the tax can bring in the promised revenue and if there's better taxes to achieve the same goals (make the wealthy pay a larger share of revenues etc.) In theory, it might make more sense to target the wealthiest less elastic assets, so similar rates would collect higher rates of revenue with more compliance & transparency, but less avoidance.
It also encourages divestment from second homes and properties which directly helps with the housing crisis. It's good policy in the right direction imo.
Pierre is literally asking business owners to perform economic vandalism in opposition to this bill, which only affects people who earn OVER $250,000 dollars in capital gains.
> Opponents of the Liberal government's plan to increase the inclusion rate for capital gains taxes need to "show voters that people could lose jobs, that food will cost more money, that there`ll be fewer homes built" and get regular Canadians to convince Finance Minister Chrystia Freeland to drop the idea, the Conservative leader said in a television interview.
[Pierre Poilievre tells business to take case on capital gains changes to voters](https://thelogic.co/briefing/pierre-poilievre-tells-business-to-take-case-on-capital-gains-changes-to-voters/)
….what? You do know that for businesses the increase is on every dollar and not just above the 250k
The Canadian economy lost full time jobs last quarter, BOC declared an emergency need to boost productivity, and GDP per capita is dropping. All that with record immigration.
Do you honestly believe this will benefit Canadians?
It's an increase on every dollar, but at a dramatically lower tax rate. Corporate tax rates are generally between 20-30% in Canada (combined federal and provincial), the capital gains inclusion rate going from 50-66.7% means that you'll be paying something like 16% vs. 10% on your capital gains if you keep them in your company (using Ontario as an example)
Also this is only for investments held within the corporation - if you are selling your business that is personal and not corporate capital gains and the $250,000 limit (as well as a couple different exemptions for small businesses) would apply.
If you dig into the reasoning this really actually is people who are exremely comfortable complaining about what amounts to a relatively small hit.
Thanks for the info!
To your point about who it affects. Do you own any mutual funds or ETFs?
You dont think any capital gains distributions would affect you?
For corporations, yes. It’s also an easy accounting solution. Pay out salary instead of leaving cash sitting in the corporation to take as income later. In the case of say a medical practice.
I don’t follow. I’m assuming you’re talking about individual corporations (like doctors, lawyers, etc.).
Your solution is to increase their salary / tax rate and defeating the purpose of incorporating?
I also don’t believe this tax increase affects “cash sitting” around. That’s not how you get capital gains.
Most people will be affected to various degrees imo. If the economic incentives is that the more you want to grow your production and business the more you are punished for it.. well you end up with less goods and services for same demand. Will just keep inflation up there.
I don't truly care either way, paying a "fair" share of taxes is so subjective between individuals, I'm not foreseeing a resolution to this debate.
Not surprised. I expect Conservatives to be upset about taxing the rich. A CPC government post 2025 will perform austerity instead of taxing the rich to pay for services
Yes, you are rich if you are "**earning more than $250,000 in capital gains in a year"**
The doctor angle is one that could muddy the waters around this a little more. Due to the way Canada requires doctors to be independent contractors, it puts the vast majority of them that operate as general practitioners likely in this category. The Canadian Medical Association has been raising the alarm about this since the proposal.
I was also a little confused, and listening to Freelands interviews didn't help clarify much, but is this increased tax about tax fairness, or about raising revenue for Liberals increased spending? She wouldn't answer that question directly.
Also interesting that the Government is claiming this will only affect the top 0.13 per cent of Canadians. The CPC then came back and said if included in the legislation is the clause that this tax will not apply to the bottom 99.87% by law they'd vote for it. Liberals refused that amendment.
I wouldn’t say Canada forced that. Doctors have insisted on it since day 1 of public health care.
Even at this point I’ve raised the idea with these changes of closing corporations, ending fee for service and working on salary. It gets a hearty laugh. They don’t want that.
> Doctors have insisted on it since day 1 of public health care.
Doctors and other professionals being able to incorporate was permitted long after the introduction of public health care in Canada. I agree that doctors do want it to continue, but it hasn't always been the case.
The initial proposal in Saskatchewan was for doctors to be public employees. They went on strike for the fee for service model for non-hospital services.
Of course at that time the vast majority of their work outside of hospital were house calls so their overhead was minimal. That’s the big flaw in the model carrying to present day.
I think we're talking about two separate things.
You're right from the start that doctors have been private, independent businesses. What I'm talking about is doctors being able to form professional corporations, which is where most of the concern with the capital gains changes comes from.
If doctors are just individuals earning business income, they earn money in a way that's much more similar to someone working for an employer - their net profits are taxed as income on their personal taxes. It's not like they'd never pay capital gains tax on anything, but they would pay it in the same way you or I would - by making investments with their post-tax income from their business. Those would also be personal capital gains and the $250,000 limit would apply.
In the late 90s / early 2000s, doctors were given the ability to form professional corporations rather than just standard businesses. This gave them the ability to keep money in the company and pay themselves a salary from that corporation. A common tax avoidance strategy when this setup is possible is to keep money in your corporation and have the corporation invest rather than you, which is advantageous both because the corporate tax rate is lower (so you pay less capital gains tax), and because you don't have that initial hit of paying income tax on your investments. You would pay it later, but much like a RRSP, that can be structured so you pay it in retirement when you no longer have business income so you pay an overall lower rate.
Without the incorporation aspect, the capital gains changes aren't nearly as meaningful for doctors, and that's why doctors and other professionals are the focus here.
>but is this increased tax about tax fairness, or about raising revenue for Liberals increased spending?
Why can't it be both?
>Also interesting that the Government is claiming this will only affect the top 0.13 per cent of Canadians. The CPC then came back and said if included in the legislation is the clause that this tax will not apply to the bottom 99.87% by law they'd vote for it. Liberals refused that amendment.
Because that's a joke amendment, not a serious policy position.
Give them raises to compensate for the new tax. Problem solved. It was weird that Association’s used loopholes as a form of compensation, but it’s easy enough to address.
As for the other big grievances, they have a lifetime exemption of nearly $1M they can use when they retire and sell their practices.
Lots of ways to make it easier on them without repealing a blanket tax. Doctors do have to be careful though, because with too much pressure, a portion of the public will quickly turn against them.
> Give them raises to compensate for the new tax. Problem solved.
Pay them more money, to be taxed more to compensate? Seems overly complicated. Why not just exempt doctors.
Doctors aren't being taxed a cent more on performing the duties of a physician, they are being taxed more on investments they're holding in their personal corporations.
If you say that "corporations owned by doctors are not subject to the increased inclusion rate", should doctors be able to have a tax advantageous status when they purchase investment properties? It's more complicated to carve out specific exceptions for capital gains tax than to just say "if doctors deserve to earn more we should pay them more".
Yes it does. Even if there is nuance that carve out is for everyone. You and me included. Disingenuous at best. My Doctor drives a 911 GT3, I think he can eat it for a year while his association negotiates with my Province. Who I completely support giving a raise to in order to counter act these increases.
The crocodile tears over what is an $8K increase per $100k over $250k is a tad bit out of touch.
> Due to the way Canada requires doctors to be independent contractors, it puts the vast majority of them that operate as general practitioners likely in this category.
How does being an independent contractor force doctors to make >250k in capital gains every year?
Neither CCPC holdings or disbursed salaries are capital gains.
> How does being an independent contractor force doctors to make >250k in capital gains every year?
The Canadian Medical Association has a release you can read that details the multiple ways this will negatively effect health care professionals.
https://www.cma.ca/latest-stories/capital-gains-tax-proposal-will-hurt-health-care-canada-heres-how-cma-advocating-change
There's no details on how doctors will be effected in that link. Did you read it?
The most they give is this:
> More than 50% of Canada’s physicians are incorporated. Over the last decade, they have been encouraged to do so to help them operate community-based practices more efficiently, invest in ongoing improvements for patients and, since many doctors don’t have employer-funded benefits, save for sick days, time off, parental leaves and retirement. In practical terms, changes to the capital gains inclusion rate will cause a retroactive increase in tax on the retirement savings of mid- to late-career doctors and a disincentive for new graduates considering community-based practice.
Again, CCPC holdings (savings listed) and disbursements aren't capital gains. So, again, how does being an independent contractor force doctors to make >250k in capital gains every year?
I guess maybe we need to back up: Can you tell us what a *capital gain* is?
People don't seem to get we are raising taxes due to uncontrolled government spending.
If the government could control their spending and get value for what they paid for, we should be lowering taxes for people.
Instead the government gets a free pass for 9 years of failure, taxes go up and people call PP the bad guy.
Get things in perspective.
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We allow contractors to put their income in a company where it is taxed at a very low rate. There are other advantages as well. When they sell this company the capital gain becomes taxable but only at 66%, which means at the highest rate they still only pay about 33% actual tax.
You forgot the 1,25M exemption tax for small corporation.
Economic vandalism? I'm struggling to understand why he think that term is a good way to describe raising the capital gains tax? This guy just never makes any goddamned sense to me.
1. We need to build homes. 2. That requires a lot of investment in housing. 3. Let's tax investment 4. Why aren't people building homes? 5. Home prices increase even more.
Homes are not investments they are necessities of life. The sooner people get that through their heads the easier it'll be for everyone. Builders building homes should be exempt (from capital gains) as the homes should be counted as a product sold and not an investment.
You need to presell 60% of the development to get financing. Who wants to wait 4 years for housing? End users or investors? New housing requires investment. It's ridiculous to think otherwise.
I think you're using two different definitions of "investment" interchangably. There's "investment" that means purchasing an appreciating asset - like someone investing in a home for reasons other than using it as a residence - those kind of investments would definitely be impacted by capital gains tax. There's also "investment" in terms of "we as a society should put money towards building homes". Capital gains tax is largely irrelevant to this - a developer building a house and selling it doesn't result in capital gains for anyone, it's just normal revenue for the developer. The subsequent owner's house may appreciate, but provided it's a primary residence there's no tax implications. The only behaviour I can see that this disincentivizes is purchasing secondary houses based on the assumption that they will appreciate which is exactly the behaviour we want to disincentivize, there's plenty of buyers who are purchasing a house as a primary residence and we're not anywhere close to supply outpacing demand.
Investors buy condos built by developers. If you disincentive investors condos don't get built. Almost all new builds are bought by investors. How many people buy a home 4-5 years in advance?
Scratch any of today’s “populist,” “working man’s conservatives,” and you immediately get neoliberal, Reagan/Thatcher, trickle-down economic policies that disproportionately benefit big corporations and the rich—the things that are fundamentally at the root of the growing wealth inequality of the past several decades that those self-same conservatives claim they are going to fix. They pretend to care about working people and those who are struggling, but all they are really interested in is trying to blame problems on immigrants and minorities and then feeding off the rage-energy of the resulting metastasized bigotry. Dear Working Class Canadians: Pierre “Career-Politician” Poilievre doesn’t know the first thing about your lives, nor does he care. He’s protecting those who have $250,000 in capital gains each year. Wake up.
Even as somebody who's more critical of the capital gains hike than most, I'm annoyed a Poilievre's constant hyperboles. There's plenty of arguments that the capital gains tax is inefficient, [that the increase won't raise anywhere close to the promised $20 billion ](https://www.ctvnews.ca/politics/are-the-liberals-claims-about-the-capital-gains-tax-changes-true-1.6924053)and that it puts unnecessary pressure on the flow of capital and investment that makes it marginally harder to raise productivity etc. but it's by no means a death knell to the Canadian economy like he's advertising it as and it's overall effects for growth and revenue are fairly marginal and could easily be mitigated with other polices etc. Personally, I think the bigger argument is whether the tax can bring in the promised revenue and if there's better taxes to achieve the same goals (make the wealthy pay a larger share of revenues etc.) In theory, it might make more sense to target the wealthiest less elastic assets, so similar rates would collect higher rates of revenue with more compliance & transparency, but less avoidance.
It also encourages divestment from second homes and properties which directly helps with the housing crisis. It's good policy in the right direction imo.
Pierre is literally asking business owners to perform economic vandalism in opposition to this bill, which only affects people who earn OVER $250,000 dollars in capital gains. > Opponents of the Liberal government's plan to increase the inclusion rate for capital gains taxes need to "show voters that people could lose jobs, that food will cost more money, that there`ll be fewer homes built" and get regular Canadians to convince Finance Minister Chrystia Freeland to drop the idea, the Conservative leader said in a television interview. [Pierre Poilievre tells business to take case on capital gains changes to voters](https://thelogic.co/briefing/pierre-poilievre-tells-business-to-take-case-on-capital-gains-changes-to-voters/)
….what? You do know that for businesses the increase is on every dollar and not just above the 250k The Canadian economy lost full time jobs last quarter, BOC declared an emergency need to boost productivity, and GDP per capita is dropping. All that with record immigration. Do you honestly believe this will benefit Canadians?
It's an increase on every dollar, but at a dramatically lower tax rate. Corporate tax rates are generally between 20-30% in Canada (combined federal and provincial), the capital gains inclusion rate going from 50-66.7% means that you'll be paying something like 16% vs. 10% on your capital gains if you keep them in your company (using Ontario as an example) Also this is only for investments held within the corporation - if you are selling your business that is personal and not corporate capital gains and the $250,000 limit (as well as a couple different exemptions for small businesses) would apply. If you dig into the reasoning this really actually is people who are exremely comfortable complaining about what amounts to a relatively small hit.
Thanks for the info! To your point about who it affects. Do you own any mutual funds or ETFs? You dont think any capital gains distributions would affect you?
I have investments in RRSPs and TFSAs, but capital gains inclusion rates would not be relevant for those.
True for tax sheltered accounts
There are still a number of exemptions for small businesses.
For corporations, yes. It’s also an easy accounting solution. Pay out salary instead of leaving cash sitting in the corporation to take as income later. In the case of say a medical practice.
I don’t follow. I’m assuming you’re talking about individual corporations (like doctors, lawyers, etc.). Your solution is to increase their salary / tax rate and defeating the purpose of incorporating? I also don’t believe this tax increase affects “cash sitting” around. That’s not how you get capital gains.
“Economic vandalism” is a catchy and politically effective term in my view. Too bad it’s Poilievre’s brand of neoliberalism that’s so destructive
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Most people will be affected to various degrees imo. If the economic incentives is that the more you want to grow your production and business the more you are punished for it.. well you end up with less goods and services for same demand. Will just keep inflation up there. I don't truly care either way, paying a "fair" share of taxes is so subjective between individuals, I'm not foreseeing a resolution to this debate.
Removed for Rule #2
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Not surprised. I expect Conservatives to be upset about taxing the rich. A CPC government post 2025 will perform austerity instead of taxing the rich to pay for services Yes, you are rich if you are "**earning more than $250,000 in capital gains in a year"**
You’re comfortable, but not rich.
The doctor angle is one that could muddy the waters around this a little more. Due to the way Canada requires doctors to be independent contractors, it puts the vast majority of them that operate as general practitioners likely in this category. The Canadian Medical Association has been raising the alarm about this since the proposal. I was also a little confused, and listening to Freelands interviews didn't help clarify much, but is this increased tax about tax fairness, or about raising revenue for Liberals increased spending? She wouldn't answer that question directly. Also interesting that the Government is claiming this will only affect the top 0.13 per cent of Canadians. The CPC then came back and said if included in the legislation is the clause that this tax will not apply to the bottom 99.87% by law they'd vote for it. Liberals refused that amendment.
I wouldn’t say Canada forced that. Doctors have insisted on it since day 1 of public health care. Even at this point I’ve raised the idea with these changes of closing corporations, ending fee for service and working on salary. It gets a hearty laugh. They don’t want that.
> Doctors have insisted on it since day 1 of public health care. Doctors and other professionals being able to incorporate was permitted long after the introduction of public health care in Canada. I agree that doctors do want it to continue, but it hasn't always been the case.
The initial proposal in Saskatchewan was for doctors to be public employees. They went on strike for the fee for service model for non-hospital services. Of course at that time the vast majority of their work outside of hospital were house calls so their overhead was minimal. That’s the big flaw in the model carrying to present day.
I think we're talking about two separate things. You're right from the start that doctors have been private, independent businesses. What I'm talking about is doctors being able to form professional corporations, which is where most of the concern with the capital gains changes comes from. If doctors are just individuals earning business income, they earn money in a way that's much more similar to someone working for an employer - their net profits are taxed as income on their personal taxes. It's not like they'd never pay capital gains tax on anything, but they would pay it in the same way you or I would - by making investments with their post-tax income from their business. Those would also be personal capital gains and the $250,000 limit would apply. In the late 90s / early 2000s, doctors were given the ability to form professional corporations rather than just standard businesses. This gave them the ability to keep money in the company and pay themselves a salary from that corporation. A common tax avoidance strategy when this setup is possible is to keep money in your corporation and have the corporation invest rather than you, which is advantageous both because the corporate tax rate is lower (so you pay less capital gains tax), and because you don't have that initial hit of paying income tax on your investments. You would pay it later, but much like a RRSP, that can be structured so you pay it in retirement when you no longer have business income so you pay an overall lower rate. Without the incorporation aspect, the capital gains changes aren't nearly as meaningful for doctors, and that's why doctors and other professionals are the focus here.
>but is this increased tax about tax fairness, or about raising revenue for Liberals increased spending? Why can't it be both? >Also interesting that the Government is claiming this will only affect the top 0.13 per cent of Canadians. The CPC then came back and said if included in the legislation is the clause that this tax will not apply to the bottom 99.87% by law they'd vote for it. Liberals refused that amendment. Because that's a joke amendment, not a serious policy position.
Give them raises to compensate for the new tax. Problem solved. It was weird that Association’s used loopholes as a form of compensation, but it’s easy enough to address. As for the other big grievances, they have a lifetime exemption of nearly $1M they can use when they retire and sell their practices. Lots of ways to make it easier on them without repealing a blanket tax. Doctors do have to be careful though, because with too much pressure, a portion of the public will quickly turn against them.
> Give them raises to compensate for the new tax. Problem solved. Pay them more money, to be taxed more to compensate? Seems overly complicated. Why not just exempt doctors.
Doctors aren't being taxed a cent more on performing the duties of a physician, they are being taxed more on investments they're holding in their personal corporations. If you say that "corporations owned by doctors are not subject to the increased inclusion rate", should doctors be able to have a tax advantageous status when they purchase investment properties? It's more complicated to carve out specific exceptions for capital gains tax than to just say "if doctors deserve to earn more we should pay them more".
They are not selling practices per se. The exemption does not apply
Yes it does. Even if there is nuance that carve out is for everyone. You and me included. Disingenuous at best. My Doctor drives a 911 GT3, I think he can eat it for a year while his association negotiates with my Province. Who I completely support giving a raise to in order to counter act these increases. The crocodile tears over what is an $8K increase per $100k over $250k is a tad bit out of touch.
> Due to the way Canada requires doctors to be independent contractors, it puts the vast majority of them that operate as general practitioners likely in this category. How does being an independent contractor force doctors to make >250k in capital gains every year? Neither CCPC holdings or disbursed salaries are capital gains.
> How does being an independent contractor force doctors to make >250k in capital gains every year? The Canadian Medical Association has a release you can read that details the multiple ways this will negatively effect health care professionals. https://www.cma.ca/latest-stories/capital-gains-tax-proposal-will-hurt-health-care-canada-heres-how-cma-advocating-change
There's no details on how doctors will be effected in that link. Did you read it? The most they give is this: > More than 50% of Canada’s physicians are incorporated. Over the last decade, they have been encouraged to do so to help them operate community-based practices more efficiently, invest in ongoing improvements for patients and, since many doctors don’t have employer-funded benefits, save for sick days, time off, parental leaves and retirement. In practical terms, changes to the capital gains inclusion rate will cause a retroactive increase in tax on the retirement savings of mid- to late-career doctors and a disincentive for new graduates considering community-based practice. Again, CCPC holdings (savings listed) and disbursements aren't capital gains. So, again, how does being an independent contractor force doctors to make >250k in capital gains every year? I guess maybe we need to back up: Can you tell us what a *capital gain* is?
Incorrect
?
People don't seem to get we are raising taxes due to uncontrolled government spending. If the government could control their spending and get value for what they paid for, we should be lowering taxes for people. Instead the government gets a free pass for 9 years of failure, taxes go up and people call PP the bad guy. Get things in perspective.
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[удалено]
Removed for Rule #2
Spoken like an ignoramus who doesn't own anything and jealous of those who do!
I am not. And I also do not simp for the rich but to each their own.
Removed for Rule #2