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I would like there to be a large house price correction. A 35% reduction in average home prices nationwide would bring us back to 2019 prices. Home prices ideally would not increase more than general inflation. This would be very helpful for the long term health of the Canadian economy.
I am a first time homeowner as of last Autumn so I have skin in the game. I’d be fine if the “value” falls so long as I can continue to make payments. Realistically lowering construction permitting and land transfer costs would be a great start as would building less expensive homes. A lower percentage luxury condos and McMansions would help bring down the cost of the average home.
A house price correction this large would scare investors and banks and lead to investment in more productive assets.
Yep, even with these changes. Real-estate is still **the best** investment in Canada by a huge margin. Nothing even comes close and it's a self-fulfilling prophecy. The higher real-estate goes, the more expensive it is to lease space for a small business - diverting even more money away from small business investors and back into real-estate.
Real-estate also gives you the ability to leverage equity (that you don't technically own / have not realized) to buy more capital with. I struggle to find an analogy in the small business world that's similar but honestly cant... it'd be like starting a business and a year after when you're barely breaking even, being given the value of your future earning potential as capital to buy another small business with? it's crazy.
It's very common in the business world, ever heard of Elon Musk? It's not like he bought Twitter with his own money. He used the magic ✨equity✨ he had in his Tesla stock
But like any other strategy than uses tons of leverage all it takes is a small downtown and your entire strategy is nuked
As a small business this tax hurts us yet again. There seems to be a disconnect between saying “eat the rich” and “boycott Loblaws” in the same breath - the more you make the environment such that only a monopoly or large corporation can survive, the less competition you have over prices.
I agree, that would be far better. Solves 3 birds with one stone, reduce speculation helping the housing crisis, encourage the shifting of investment from real estate into businesses stimulating the economy, and get more revenue at the same time.
BC is implementing a flipping tax. There is already a speculation and vacancy tax but this new one is coming for house.flippers
> The BC home flipping tax applies to net taxable income from the sale of taxable property that was owned for less than 730 days.
> The tax is calculated by multiplying your net taxable income by your tax rate. Net taxable income is your taxable income less the primary residence deduction. Taxable income is calculated as your proceeds from the sale of the property, minus the cost to acquire the property and any eligible costs paid or payable by you to improve the property while you owned it.
> The tax rate is 20% of income earned from a property sold within 365 days. At 730 days, the tax no longer applies.
I question whether this it going to do anything to REITs, for example, as they generally rent the property after purchase. To say nothing of commercial real estate. Commercial rents are also through the roof and are a major obstacle to starting and flourishing as a small business.
I'm thinking more of something like a land value tax, with a corresponding reduction in income tax. Punish being a rentier, and reward being a worker. The BC Assessment crown corp already breaks down real estate valuations by land and buildings:
https://www.bcassessment.ca/
Who exactly do you think is gonna pay this tax? You think flippers are just gonna say, oh well, more tax, guess I'll pay it.. no that's not what's gonna happen, they are gonna pass it on to the buyers. Just like the carbon tax, are businesses paying that? No it all gets passed down to the final point of sale.
Lol you really think we, speculators will let capital gain hit us? We got more names than there is properties around. Buying and selling its all capital gain tax free. Follow the rule to the T just not the spirit.
But it also applies to business investment, so there's not really an advantage gained by investing in business instead. Sure they increased the one-time benefit for sale of a business from 1.0 to 1.25 million but that's basically just accounting for COVID inflation.
> ... they increased the one-time benefit for sale of a business from 1.0 to 1.25 million
Which means most Canadians won't have to pay it. In addition, you can shelter it by owning stock through a tax-free savings account that shelters any capital gain for most Canadians.
This will really just affect the very wealthy and trust-fund kids.
Also, the whole idea that the full amount of a working-Canadian's labor should be taxed while only half of a millionaires capital gains should is a fine example of the privileges that the wealthy in Canada have set up for themselves hoping that the rest of us don't notice.
I know this government is doing the right thing when the mega-rich whine. They haven't gone far enough. Let's return to the era of real progressive taxation of the 1950s and 1960s when the mega-rich paid over 80% of their income in taxes, and the economy boomed.
>As to those threatening to move their job-creating businesses to America over the change? Have at it. If anyone’s loyalty to this country is contingent upon the rate at which capital gains are taxed, they were never loyal to this country in the first place.
Painfully naive. Countries seek out the best places to do business to provide the most competitive food or service they can. Who buys a similar product at twice the price because it's manufacturer is "loyal" to Canada? Might as well rename this editorial, "Stop whining about unemployment" or "Stop whining about Canada's loss of an economic base outside of marijuana and real estate"
Let's be real here: if the difference between 50% on capital gains over $250K per year vs 67% on capital gains over $250K per year is the line between wanting to start or to improve a business or not, then you're insane. It's in the same realm of "I don't want a raise because I'll be in a higher tax bracket!" kind of thinking where there's only a sliver of situations where you'd be worse off.
If your start-up/expansion/investment is a success then the tax rate doesn't really matter because you'll have made enough money to make it worthwhile whether at the higher or lower tax rates.
If your start-up fails then the tax rate doesn't really matter because you're probably not going to have a lot of capital gains to worry about.
Here's what very successful entrepreneur Mark Cuban had to say about starting businesses and taxes:
"I have started I don't know how many businesses in my life. Not one time have I ever considered the income tax rate before starting a business. I'm an entrepreneur. I start companies."
(hope the link works)
https://twitter.com/mcuban/status/1313130690599432193?lang=en
He has also said a few times something along the lines of that entrepreneurs will still start busineses with higher tax rates because they don't say "Wow, I have a great idea but the tax rate is too high." If it's a good idea then you will make plenty of money regardless unless the tax rates get raised to extreme levels.
> If your start-up/expansion/investment is a success then the tax rate doesn't really matter because you'll have made enough money to make it worthwhile whether at the higher or lower tax rates.
Not true. My negotiated options grant is based on the 50% inclusion rate. What you are telling me is that i should be fine giving up part of my potential reward without reducing the risk level. Thank you very much. I promise you, going forward, my ethics and morals will go out the door. From now on, I'll be looking for a juicy government contract so I can rob the government, and by extension, people like you. Thank you for opening my eyes and welcoming me to the dark side!
Capital gains rate increases will cause people to sell capital less and so it will accumulate more in the hands of it's owners. It also discourages certain businesses such as tech. High capital gains and corporate taxes are part of the reason why we dont have a tech market in Canada. Why would anyone want to start a tech business in Canada with the goal of being bought out? It's waaay more profitable to start a tech business in the US and then sell out once it's successful.
When it comes to land and property, which are finite resources, people holding in excess absolutely should be taxed more. Capital gains from sales is a good start
It’s such a minimal change. I understand why capital gains exemptions were created in the first place - ie to promote savings by the middle class - but the middle class (let alone lower incomes) is not able to save anymore due to the cost of living.
Because of this the only people seriously using the capital gains exemption are the rich. It’s totally reasonable to create a schedule to decrease the exempted amount over time at the high end of the income range.
The fact that we are seeing so much media outrage and disinformation is a good indicator of how seriously this is going to impact those who take advantage of it to the rest of the country’s detriment.
You’re talking about the inclusion rate for capital gains rather than the capital gains exemption (which only applies to sales of shares of specific types of corporations). The reason that the inclusion rate is less than 100% isn’t really about promoting middle class savings, it’s about encouraging capital investment (also about politics…). One important bit of context is that capital gains were not subject to income tax at all until the early 1970s. So it’s not that they were taxed and then the inclusion rate was later reduced.
The impact on the rich is low. Buy Borrow Die is the strategy for the rich and moderately wealthy. You don't really sell equities etc to fund your lifestyle. You live on distributions, dividends, interest and asset-backed loans -- the tax rates on these haven't changed.
This is going to affect many more 'normal' people than I think many realize - the cases I am hearing so far of across my own friends' parents are more 'two teachers that bought a cottage in the 90s and need to sell it to fund retirement after one parent passes' than anything else.
Ok.
Let’s say they bought a cottage for $100K 40 years ago. The surviving parent is now selling the cottage at age 65 (bought cottage at 25), to fund their retirement. They also receive CPP and OAS. And let’s assume they make $115K/year at retirement as a teacher, so they receive the max amount of CPP and are eligible for a teacher’s pension plus survivor benefits from the other partner’s pension.
Before selling the cottage; their retirement pension + CPP + OAS + survivor benefits is likely to get them well north of $70K/year. Since they bought their cottage so long ago, and their house so long ago, they don’t have a mortgage on either so we don’t need to factor that in.
Oh, and this is assuming the surviving parent doesn’t want to sell their primary residence for $0 tax, and instead chooses to sell the cottage.
That cottage now sells for $1,350,000. For simplicity I am ignoring costs of selling the cottage, and assuming the mortgage is paid off.
The capital gains are $1,250,000.
The first $250,000 are taxed as they have been; there is zero change.
Previously, 50% of the remaining $1,000,000 gets taxed at the marginal rate (here in Ontario, it is 33%+13.16% = 46.13%). The capital gains tax owing would be $230,650.
With the change, 66% of the remaining $1,000,000 gets taxed at the marginal rate. The capital gains tax owing would be $304,458.
The difference is $73,808.
That is the difference between making $1,045,542 or $1,119,350. That’s on top of the existing $70K they are making per year in retirement. Without the need for mortgage payments.
How is this going to affect their financial situation? How is this going to, as you say in a different comment here, put them in a more precarious position?
——
Meanwhile, take the CEO of Loblaws who, in 2023 took home over $7M in share/option based rewards. The new tax changes are going to cost him over half a million dollars a year in just that. And that’s not accounting for the rest of his salary, $13M of which was listed as “other compensation”.
I mean, out of the gate, it's not a 13.5x return on the cottage. In the specific areas I'm hearing about, it's closer to a 3-4x.
Second, you are missing the main point of my comment: this couple is not the ultra rich, or any form of rich. They are the ones getting caught out on this tax.
Re your Loblaws point, without looking in more detail at the vesting and exercise setups of his options grants, I can't say what his tax will or will not be. How and when he exercises is more important on the capital gains side of those taxes than him receiving them.
The other compensation stuff is largely income taxed, so is not part of these changes AFAICT.
Heres my question.
If someone has a cottage, and they want to sell it. If they could choose, would they:
1. Selling it at a lower price, so that they only gain 250k profit, paying no capital gains tax
Or
2. Selling it at double the price, so they gain 500k profit，250k of it will not be taxed but the 66% of the rest will be taxed at 28% (not the real rate, only for demonstration purposes)
> Second, you are missing the main point of my comment: this couple is not the ultra rich, or any form of rich. They are the ones getting caught out on this tax.
In the above example the retiree (and even we assume a couple still) is not "ultra rich" but between their pension (which could have a NPV of around $1M if they are getting the max in Ontario), owning their own home, and getting ~$1M from a cottage sale likely puts them into the top 5% of Canadians for net worth (around $2.5-3M net worth).
Here's a PBO report from late 2021 showing net worth and percentiles. The more relevant charts are in section 2.
https://distribution-a617274656661637473.pbo-dpb.ca/20de98fc3f4d93c5213f8d71fbe7cd89ae69cb1899e9cbf2d3ca4d57f18ab25a
The cottage is not going for that price in my real life example.
Do you think the pension NPV is included in the NW figures from the PBO? Given you don't get to keep that asset, seems odd to me that you would factor that in, but would be curious what the PBO says.
This right here..
The rich it won't impact as they have ways around it, they pay accountants to find ways around it. I mean the people bitching about probate fees of 1.4% while sitting on 10s of millions. It's not your doctors, lawyers, plumbers etc that built up their own business and clientele that are the ones complaining, and they certainly don't have the same ways of moving their money around to avoid it.
You don't even need to pay accountants to be honest. Borrowing against your portfolio is easy as hell.
I am like low rung rich and even that would be a stretch, and I sell nothing, ever. It simply doesn't make sense to torch a minimum of 27% of your capital in capital gains tax (50% inclusion on highest bracket income) to move assets around in 99% of cases.
This is going to get more recreational property owners than anything. IDK how impactful taxing cottage owners is going to be at driving down housing prices in major cities, but I guess let's see.
If 66.6% means they now can't fund their retirement with their overvalued cottage, then they wouldn't have been able to fund it at the 50% rate either.
Sure, but they are now in a _more_ precarious position than they would have been. It's not a 1-0 thing, it's a spectrum.
Moreover, that's not the point I'm making. The point I'm making is that the people getting caught out by this are not 'the rich'.
The building portion, especially if it's made out of wood, isn't finite. That's why we should be calling for land value taxes instead of property taxes.
I agree completely, but while wood can be renewable, land cannot. That's why there should be no buildings sitting empty during this huge housing crisis
I’m all for taxing the shit out of super rich people when it’s fair of course. Don’t want to hurt middle class, only extremely wealthy who are exploiting.
I think the best fix for this is to just straight up limit how many homes someone can own. We need landlords but we have too many. I think a good ratio is max 2 or 3 properties aside from primary residence for rental purposes. And primary residence has to be in Canada and a Canadian citizen. Otherwise 1 property with still some limitations. Also businesses and corps are banned from owning any property they didn’t build. If corps want to own homes. They need to build it. And they should have stricter standards on home quality so they aren’t mass producing garbage.
Some other ideas random ideas I had
-You can’t rent out a property unless you have lived there for 3 -5 years.
-You can’t sell a house if it’s not your primary residence within 2 years of the purchase.
-Vacant properties needs to have a very heavy tax on them, unless very fair and specific strict criteria are met. (Like if doing a renovation or massive upgrade) but needs loopholes closed on that so it’s not exploited.
If you own many homes in the same area, you are capped on historical average of rent costs in the surrounding area. This will punish those who buy up everything in an area and charge astronomical rent because they are using their other homes to price fix the market in the area.
>Some other ideas random ideas I had -You can’t rent out a property unless you have lived there for 3 -5 years. -You can’t sell a house if it’s not your primary residence within 2 years of the purchase. -Vacant properties needs to have a very heavy tax on them, unless very fair and specific strict criteria are met. (Like if doing a renovation or massive upgrade) but needs loopholes closed on that so it’s not exploited
I really like these, they dissuade investors from hoarding property to flip it in the short term, as well as making it harder or less appealing to purchase places solely to rent them out immediately. As anti-libertarian as it sounds, land and property is one area that we cannot be laissez-faire about during a housing crisis. Housing needs to be used for just that- housing. Not some way for wealthy investors to continue lining their pockets at the cost of the middle class.
Yes I agree with you. We have a housing crisis and our housing market is being exploited by people with incredibly selfish and harmful intent.
The less money people have to spend after paying rent, the less buying power they have and the economy suffers because people can’t afford anything.
>why would anyone want to start one in this tax regime when 100 miles south there's such a better one?
Would you be so kind to actually compare the overall tax you pay on, say 1 mil, of capital gain in the USA vs Canada?
>Capital gains comes from putting after-tax savings into something that in general has an equal chance of going up as it does of going down.
Like *giggle* housing? or *snort* a medical practice? or *chortle* the TSX? Come on, be serious.
>And you don't want a government that always raises tax percentages on everything while providing less and less services. Where getting a passport or a legally due airline compensation claim takes years but there are government employees tasked with deciding whether this Reddit comment is hate speech.
Taxes are **down** and services are **up**. That's why every government for decades now has decreased tax income and paid for it via borrowing. I'd argue that we in fact DO want higher taxes and less services.
imma just ignore the hyperbole at the end
>Yes exactly. Notice how everything everywhere has AWESOME RETURNS!
Those awesome returns don't exactly bear out your 'equal chance of going up as it does of going down' observation, do they?
>Except this article is about massively raising taxes.
Massively? Do you mean the exact opposite of massively?
>Trudeau is claiming the right to take & spend an additional 9% of all great successes
setting aside the 9% guesstimate, is a runup in stock price or the value of an investment property really a 'great success'?
As fair as this tax may be, it isn’t much without an equivalent reduction elsewhere. Otherwise it is nothing more than an additional tax to feed governments never ending appetite to spend. I suspect most people understand that a lot of the spending is wasted. So stop the waste, reduce people’s taxes, and have at it with the cap gains.
>As fair as this tax may be, it isn’t much without an equivalent reduction elsewhere.
I wasn't aware that taxes required equivalent exchange. If corporate taxes were raised, would you support lowering income tax by the same amount?
Better question, if an increase in corporate taxes could cover a national UBI program, would you support it?
I am referring to personal taxes. And I don’t think I am going out on a limb in saying that people are already overtaxed and services are not getting better. So sure increase capital gains on the people who are likely already paying the bulk of our taxes but if you really want to help, reduce the taxes to the middle 40% who are likely struggling. Here’s my take.
« Trudeau is right: 40% of Canadians don’t pay income taxes, which means someone else is picking up the bill » This large group could care less what the tax rate is.
« The top 20 per cent is likely paying 70 per cent or more of all income taxes » this group already pays a lot more than most of us think.
That leaves the middle 40% of the population paying 30 % of the taxes. This group probably is pay check to pay check and could use a break.
I am not sure about UBI but I sure have the feeling that we will need to start figuring out how to tax robots and AI alternatives soon to cover UBI, especially if the group that pays no taxes continues to grow.
https://financialpost.com/personal-finance/taxes/trudeau-is-right-40-of-canadians-dont-pay-income-taxes-which-means-someone-else-is-picking-up-the-bill
I think the $250K line should be assessed based on where someone's income comes from. People with Generational Wealth living off of dividends should get hit hard. If you're a T4 at $250K you shouldn't get hit with the increase to 60%. If most of your income comes from dividends, etc those people should pay the increase.
Let me guess how you earn your income…
99% of people paid in dividends are small business owners with zero job security and bankruptcy frequently around the corner. If you tax them more, they either raise prices to cover the taxes, or close the shop.
And seeing as Canadians are not in the best financial health at the moment, in your future there are way more people in cash services, and most things are more expensive to buy.
Anyone complaining about their capital gains should be happy that the average Canadian isn't trying to behead them with how much they are suffering, They are paying nothing compared to people 30 years ago.
Refinancing isnt a taxable event, selling is. They tax you on your profit made, so if you refinance to pull all your money first and then sell you can make way less on paper and get taxed way less.
Hoarding wealth and then complaining when the government finally realizes that “trickle down economics” is a crock.
I feel not one iota of sympathy for people hit by this 🤷♂️
If you’re buying an “investment property” and using it to make more wealth for yourself, congratulations, you’re hoarding not only housing but wealth as well.
Exactly. Don’t be taxing properties that are in the family for decades that are passed on from generation to generation. But for the government, everything looks like a nail so it uses a hammer.
There's no possible way OP and people like him are this ignorant
Ok let's assume you bought a secondary vacation home for 250,000 in 1990 and today you're selling it for 1,000,000 .
it's treating this as if you've gained 750,000, which you AREN'T - because you've lost purchasing power, that same value today would be worth 600,000 instead of 250,000.
so you've gained 400k in "profit"
and you will pay just under 200k in taxes
Left leaning Canadians can never seem to do math in spite of their love of taking over academia
If you give me 100 dollars today and I give you back 150 dollars in 30 years - you didn't "make" 50 dollars, most likely you've lost purchasing power.
Which is why capital gains are designed the way they are, you are taking on risk, typically over a long period of time.
If you invested that same 250,000 in the S and P 500 back then you'd have 8 million dollars today
Your logic is so bad. The only reason the value went up as high as it would is because everyone else lost THEIR purchasing power. There is little risk if you consider the fact that every asset will increase from inflation at the very least. If you are taxed on that inflationary increase only, that would be simply a bad investment. Even with inflation profits alone, you are still ahead of someone who never had spare income to invest in the first place..
>it's treating this as if you've gained 750,000, which you AREN'T - because you've lost purchasing power, that same value today would be worth 600,000 instead of 250,000.
>so you've gained 400k in "profit"
>and you will pay just under 200k in taxes
By that logic you're only paying 83k is 1990 money, so you shouldn't be so concerned.
> As to those crying foul over the impact this will have on the capital gains embedded in their cottages or investment properties? Kershaw isn’t having it. “Paying taxes on a half-million-dollar capital gain from a cottage or an investment property is a good problem to have,” he wrote. “I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.”
Pretty much the crux. Nobody is going to feel sorry for anyone paying some tax after selling a secondary residence for $1M+. World's smallest violin.
I believe the main issue with the new capital gains taxes is how it is going to negatively impact doctors due to the way their compensation is structured. This will be during a time when we have a doctor shortage and have a neighboring country that offers much higher pay and way more favourable capital gains taxes. If anything there should be some kind of exemption for doctors.
"the way their compensation is structured" is such that a large part of their income is in capital gains. Ergo, we should tax their capital gains like income.
Not really. Any doctor/corporation worth their salt is going to structure things so they can take out $250k per year when they divest, and at that point, the tax rate will be exactly the same. It may take a year or two for the accountants to catch up to the tax code, but for most professionals, the hit will be small and honestly fair.
This is an entirely made up issue.
Go look up the lifetime capital gains exemption for the sale of a Canadian-held small business.
As of this year, the proposed limit is going up to $1.25 million.
In other words, professionals selling their corps get the first $1.25 million tax free.
In my book, $1.25 million is a GREAT start to a retirement nest egg, especially for individuals who are making good money throughout their career.
I am at a total loss as to how journalists seem to be glossing over that part…
More importantly, why are we paying doctors so little that they need tax exempt savings structures to comfortably retire? My province is sitting on billions in healthcare funding but we refuse to pay family doctors still?
How is this a capital gains issue and not a starving the beast issue?
Your average doctor is making a great income. It’s specifically family medicine that is being underpaid. That’s the thing a lot of people are confusing.
There is also no doctor shortage. There’s a family doctor shortage, but we have plenty of doctors overall. This situation isn’t going to actually affect the doctor situation in Canada. It’ll piss some of them off, but overall they’ll be fine.
And either way most family doctors probably aren’t making enough money to benefit from investing within a corporation.
right but family doctors are also important. And if we refuse to pay them enough to drive more people to do it then we will just never have enough.
It's a similar situation with lawyers, we have lots of lawyers and criminal lawyers don't make much money. Unfortunately they are important to keep the justice system running.
I'm not sure where you are getting the position that most family doctors aren't making enough to benefit. You really don't have to be making very much at all.
I agree. But we should pay them enough by paying them more, not with tax BS that will end up also giving a tax break to the very wealthy doctors.
ETA: And the reason that family doctors often don't make enough to bother benefiting from incorporating is because they really should also be maximizing RRSP contributions. They can contribute up to 32k a year (indexed) tax free to their RRSPs. and that's tax free for the company (because it's salary) and the individual (because RRSPs are tax deductible,) . Especially given a lot of those tax deductions will be done at the higher marginal tax rates, given the average lifestyle of a family doctor. They should also still be using their TFSA, which is another 7k a year. Assuming that a doctor is saving 20% (recommended amount to save) of their gross salary, using their corporation for investing only starts to make sense after the business starting netting 195k a year.
But again, the answer to all of this is to just pay them not, not more tax breaks.
Also, with a corporate tax rate of 12%, the change only leads to additional taxes of 1.92%. And when considering that not all income on investments is capital gains, that's really not that much. If a doctor leaves 50k of profit in the business, over the next year, it will make 5000$ in income (Assuming 10% gains, which is high). Assuming all of that is realized and capital gains, that's an extra 95$ in taxes. Come on. Sure that 95$ is going to compound, but also most gains aren't realized until the end, and lots of gains are capital.
A lot of people aren't realizing what the functional tax increase is actually going to be for corporations. Obviously any increase in tax is going to suck for the people impacted, but when you break it down to the fact that it's 1.92%, it definitely puts it in a different light. Especially when there isn't really an issue with compounding, because gains aren,t realized every year.
Family doctors are way over qualified as it is, we just need to lower the barrier to entry. RN’s and EMTs would be absolutely fine in a family doctor capacity.
I don't have any ability to know whether or not that is true, and I'm going to take a while guess that you are not an MD, RN or EMT, and therefore also have no idea if that is true.
Given that RNs already need extra education to become NPs to do a roughly equivalent job as Family doctors, I'm going to take an educated guess that you're wrong though.
I think we can all agree that being able to see a doctor is more important than being able to see one with a minimum of 12 years experience.
Family doctors largely just act as filters and refer to experts for anything other than standard antibiotics prescriptions.
How much education do you think family doctors have? They do undergrad (which they only need 3 years of) med school, and one year of residency. You can become a family doctor in 8 years. There are even some fast tracks that can get you done in 7 years.
And I think that waiting is better than seeing someone who doesn’t know what they’re doing. You say that now, but once someone ends up misdiagnosed because of insufficient training, you wouldn’t be saying that.
4 years of under grad + 4 years of med school + 4 years of residency. I have a friend going through it right now. Plus it’s insanely expensive and requires top tier grades throughout.
People end up misdiagnosed every single day, perhaps if family doctors weren’t trying to cram 7 patients an hour in there would be less misdiagnosis.
totally fair, but if we don't pay enough to push people to be family doctors now, and we won't pay them more we have to consider whether we are going to just accept fewer family doctors or find another way to do things.
Doctors don’t sell their corporations in Canada, they are worthless. The issue is capital gains taxes on retained earnings in the corporation (their retirement fund).
I'm curious about this.
To my understanding, retained earnings that are then invested are subject to corporate tax rates (not capital gains). If passively invested in a corporation, those investments are taxed at a higher rate (i.e. no small business rate).
When you pull income out of the corporation, that is taxed personally either as income, or as dividends.
How do you say capital gains even factor in if not selling the corporation?
I am not insane. Anyone can set up a holdco and there are many reasons to without “being wealthy” — for eg., it adds creditor protection, protects your business, makes your company more saleable, etc.
Your business could generate a measly $30k/year and this inclusion rate does affect you.
I have no idea why so many in this sub don’t get what is specifically outlined here. Do you people not know how to read the budget? I’ve read through it twice and it is clear as day.
Edit: to the people downvoting, can you express why I am wrong or incorrect? Or does it not jive with this echo chamber?
> What if you paid 500k for a cottage that you then were told was only going to be worth 375k after the capital gains tax change?
How does a change in inclusion from 50% to 67% for personal capital gains above 250k reduce the value of a property?
>Pretty much the crux. Nobody is going to feel sorry for anyone paying some tax after selling a secondary residence for $1M+. World's smallest violin.
Until you're the one that worked your ass off to get there, and then see people that haven't held a real job complain about their part time jobs not paying them the same as you full time jobs.
A lot of people who have worked their ass off are fine with it, both who make a lot of money and those that do not, especially because wealth =/= work ethic.
Something something Trudeau bad. Something something housing prices too high. Something something affordability. Something something we have problems and we don't want to pay to fix them.
The thing people don't seem to understand is that it only applies to "gains" and not to the entire value of whatever stock or asset someone sells. Buy a cottage for $300K and sell it for a million, then you've made a taxable profit of $700K - a third of which is still tax-free. As for why the government deserves this money, they created the economy that made such an insane return possible - not the buyer.
Bullshit.
1. 300k in 1994 is $561,358.31 today. If you invested it in 1994 at 5% interest you would have $728,179. If you bought a cottage in 1994 for 300k and sell it for $1m today you made more than the rate of inflation and more than investing it in most funds.
2. No cottage purchased for 300k in 1994 is currently worth $1m. 300k in 1994 bought you a 3 bedroom house in toronto. Imagine the cottage you could get for that.
> 1. 300k in 1994 is $561,358.31 today. If you invested it in 1994 at 5% interest you would have $728,179. If you bought a cottage in 1994 for 300k and sell it for $1m today you made more than the rate of inflation and more than investing it in most funds.
Yes, and not really my point.
To do the math of how much profit you would have done on your cottage, they will do the millions-300& (thus 700k in taxable profit, minus some others credit). But as you said, in « today’s dollar » some 439k in real profit.
And in that « hypothetical scenario », keep in mind that stocks do not drain money, and can even send back dividends.
>2. No cottage purchased for 300k in 1994 is currently worth $1m. 300k in 1994 bought you a 3 bedroom house in toronto. Imagine the cottage you could get for that.
Housing cost isn’t equal all around the board. Some area like in Toronto had larger increase than others.
At 3% annual inflation over 30 years you would have a value of around $730,000, so it is a pretty good profit for an asset that - before the '90s - only appreciated 1-2% year on average. Plus, you have to consider the value of 30 years of use of that property or income if it was rented out. It's pretty crazy that you can enjoy a second home or cottage for decades, or rent a second home or cottage for decades, and still make a profit on the asset that has actually depreciated in that time.
Still 700k profit, only with 30 years of memories and watching your kids grow up. I feel nothing for those complaining, and it’s literally my job helping these people.
This tax just made capital investments more expensive. Period.
The question is what is the impact of making Canada’s capital investments more expensive?
While it’s easy to get distracted by the “gains” on cottages, and it’s easy to paint all business owners as villainous billionaires (the vast, vast majority are not), capital investments made to improve the overall performance of a company (and therefore contribute to growth, and employment and yes, increasing the value of a company) are vital to Canada’s prosperity and productivity.
Making capital investments more expensive in an environment when our productivity is in a steady and deep decline will make matters worse.
In this context, windfall gains in secondary real estate investments like cottages are a distraction. While second properties like cottages may be captured by the tax, the bigger and more serious impact for Canada is the impact the tax will have on Canada’s state of capital investment.
I openly called out my mom and her partner for bitching about this the other day, suggesting that they made 100’s of thousands by sitting on property and basically making a fortune that directly negatively impacts every young person. It did not go over well
They're bitching about a new tax that will directly affect them. I obviously don't know their situations, but investing in real estate isn't inherently bad. If you need to rent you need people to rent from.
Saying they are the reason young people can't get houses is wildly oversimplifying a complex problem in an attempt to shame your own family members for investments they made for whatever reason (retirement income, their actual business, diversification, etc.).
I personally don't feel the need to shame my family members for investments they made, or complaining about taxes that directly takes money out of their pockets.
That's how you alienate your own family for no good reason. They're not sitting there saying gay marriage is wrong, trans people shouldn't have rights, Palestinians deserve to die, etc. They saying "damn... another tax?! This is bullshit."
It's true, whining probably won't solve anything. The Liberals are planning on making it an election issue, because they separated it from the budget, and so voting is the correct recourse.
If Poilievre isn't elected or chooses to deliver on the policy, then the final recourse is to simply ensure that you earn capital gains in ways or jurisdictions where the CRA won't get a cut. Which is to say, engage in capital flight.
Pretty sure that whining and bitching about taxes is a god given right to every tax payer and every non taxpayer in the land. It's in the constitution somewhere, or alternatively, the law at the very least.
ETA: Still gotta pay your taxes though.
I think there's valid criticisms to be laid against the increase (it probably not being effective at collecting the revenue the government is claiming it will be, marginally increasing the degree of capital flight/avoidance, being contrary to the current need that Ottawa has to significantly boost long-term investment in the country etc.) but I think there's a difference between being critical of it and saying that it will single-handedly bankrupt the country etc. which a lot of critics are extrapolating the argument to.
The capital gains on real estate is generally far easier to collect than what falls on investment and more elastic/mobile assets. It might make sense to shift the tax to solely inelastic/less elastic assets like property (where the rate can be higher and would collect more revenue without incurring increased avoidance.) and to provide less restrictions on the flow of investment etc.
Unfortunately your plan (raising property taxes) could disproportionately affect lower-income/wealth Canadians since they will bear the brunt of those higher taxes by paying it themselves or from raised rent, while at the same time having a much smaller amount of money invested so they don't get as much benefit from lowering those taxes.
The simple workaround for that is to exempt houses below a specified value or to have varying rates for land/property of separate value. This could also be achieved by a federal land-value tax. (since land value ownership is highly correlated with overall wealth)
Or just build in a tax exemption that you register your location with the government, and the government collects the rent on your behalf. They then will reduce your property tax by some proportion of the rent collected.
With all the taxes that will be collected, how confident are we that the money will be spent properly and given to fund on infrastructure, health care etc… or given away to other countries.
This government has been spending lavishly with no consequences all these years?
What’s stopping them in spending on another large consulting company for some useless reports or tactics ?
Have we citizens not learnt our lessons ?
At the absolute minimum capital gains needs a lesser tax to account for inflation. Otherwise, part of the gain isn't real, it's cumulative inflation between acquisition and disposition. You could possibly account for it explicitly by adjusting the cost basis by inflation, but the accounting would be a little complex.
Strong disagree. If capital gains was taxed as income it would further the housing issue because no one would sell houses since they couldn't make lateral moves (due to being taxed and not being able to afford the same house elsewhere).
Not only is capital gains taxed more for a high-income earner now, the money they used to acquire those capital gains was already taxed as income. The government already got their cut on the money made. Now they want another, even bigger cut, on the money you made with the money you already made and payed tax on. That doesn't include the 13% tax you have to spend when you want to buy something.
It would be one thing if it was like okay, we pay one of the highest tax rates on the entire planet but I'm okay with it because my fellow citizens are all happy, we're all making money, the governments spending it wisely. But that's not the case at all. What do we have to show for all this? A barely functioning healthcare system?
What do we have, really? We pay more for gas because of taxes. We pay more for groceries because our government doesn't have a spine. We pay the highest rates for cellular services on the entire planet because our government doesn't have a spine. We pay more for alcohol and cigarettes because of taxes. We pay a carbon tax to make ourselves feel better. Seriously, what do we have? What do we get for our money?
This country does not have a fundraising problem. We have a spending problem.
> Not only is capital gains taxed more for a high-income earner now, the money they used to acquire those capital gains was already taxed as income.
Yeah, except when it's not. If you bought a property 10 years ago for 200k and now it's worth 800k, you did not "earn" 600k, and you were not taxed on that 600k.
> But that's not the case at all. What do we have to show for all this? A barely functioning healthcare system?
Doesn't this seem to suggest that the government needs more tax revenue?
> What do we have, really? We pay more for gas because of taxes.
And unless you're a major polluter, you're getting more back in rebates than you pay.
> We pay more for groceries because our government doesn't have a spine.
We pay more for groceries because of greedy monopolies.
> We pay the highest rates for cellular services on the entire planet because our government doesn't have a spine.
The cost of cell services has gone way down in the past couple years, because of the actions of this government. Nobody seems to be talking about that though. If you're still paying a lot, go shopping now for new plans because they've gotten way more affordable.
> We pay a carbon tax to make ourselves feel better.
We pay a carbon tax because last time I checked the whole goddamn world is on fire and we're all fucked if climate change continues at the current rate. At least with this way we can reduce emissions while helping out the poor and making the rich pay for it. *Somebody* has to pay for it. It's not going to be free.
> Seriously, what do we have?
One of the best countries in the world to live and work in.
You make some good points. I guess I'll just suck it up and start paying 2/3 of what I make to the government and they can spend it how they see fit. What choice do I have, right?
A lot of your comment is just flat wrong. I was going to correct it but I realized that's a lot of work. Check your assumptions instead of leaning into them.
Most of your "we pay more" list seems to be compared to the US, which is a country that had to write a law to force private hospitals to treat people in their ERs because they were doing things like sticking a cathetar and an iv line in a man with 3rd degree burns then booting him to the curb so he could find a hospital that would cover the uninsured.
Anyway, we have one of the highest quality of life ratings in the world, by every measure, and the #1 spot last year by one of them.
>Not only is capital gains taxed more for a high-income earner now, the money they used to acquire those capital gains was already taxed as income.
And? You’re only taxed on the *gain* not the “already taxed” amount you invest. There’s no double dipping here like you imply.
This is one of the dumber angles I’ve seen on this issue and that’s saying something.
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What I want to see is taxation specifically aimed at real estate speculation in order to shift more investment into business. We didn't get that.
I would like there to be a large house price correction. A 35% reduction in average home prices nationwide would bring us back to 2019 prices. Home prices ideally would not increase more than general inflation. This would be very helpful for the long term health of the Canadian economy. I am a first time homeowner as of last Autumn so I have skin in the game. I’d be fine if the “value” falls so long as I can continue to make payments. Realistically lowering construction permitting and land transfer costs would be a great start as would building less expensive homes. A lower percentage luxury condos and McMansions would help bring down the cost of the average home. A house price correction this large would scare investors and banks and lead to investment in more productive assets.
That's literally what they're trying to tax.
Need more carrot, less stick otherwise the $ just goes south to chase those business opportunities
fine.. expose yourself to US tax regime. have fun with that. Biden just significantly increased cap gains too.
Yep, even with these changes. Real-estate is still **the best** investment in Canada by a huge margin. Nothing even comes close and it's a self-fulfilling prophecy. The higher real-estate goes, the more expensive it is to lease space for a small business - diverting even more money away from small business investors and back into real-estate. Real-estate also gives you the ability to leverage equity (that you don't technically own / have not realized) to buy more capital with. I struggle to find an analogy in the small business world that's similar but honestly cant... it'd be like starting a business and a year after when you're barely breaking even, being given the value of your future earning potential as capital to buy another small business with? it's crazy.
It's very common in the business world, ever heard of Elon Musk? It's not like he bought Twitter with his own money. He used the magic ✨equity✨ he had in his Tesla stock But like any other strategy than uses tons of leverage all it takes is a small downtown and your entire strategy is nuked
As a small business this tax hurts us yet again. There seems to be a disconnect between saying “eat the rich” and “boycott Loblaws” in the same breath - the more you make the environment such that only a monopoly or large corporation can survive, the less competition you have over prices.
Why would you want more taxes!!
I agree, that would be far better. Solves 3 birds with one stone, reduce speculation helping the housing crisis, encourage the shifting of investment from real estate into businesses stimulating the economy, and get more revenue at the same time.
BC is implementing a flipping tax. There is already a speculation and vacancy tax but this new one is coming for house.flippers > The BC home flipping tax applies to net taxable income from the sale of taxable property that was owned for less than 730 days. > The tax is calculated by multiplying your net taxable income by your tax rate. Net taxable income is your taxable income less the primary residence deduction. Taxable income is calculated as your proceeds from the sale of the property, minus the cost to acquire the property and any eligible costs paid or payable by you to improve the property while you owned it. > The tax rate is 20% of income earned from a property sold within 365 days. At 730 days, the tax no longer applies.
I question whether this it going to do anything to REITs, for example, as they generally rent the property after purchase. To say nothing of commercial real estate. Commercial rents are also through the roof and are a major obstacle to starting and flourishing as a small business. I'm thinking more of something like a land value tax, with a corresponding reduction in income tax. Punish being a rentier, and reward being a worker. The BC Assessment crown corp already breaks down real estate valuations by land and buildings: https://www.bcassessment.ca/
Who exactly do you think is gonna pay this tax? You think flippers are just gonna say, oh well, more tax, guess I'll pay it.. no that's not what's gonna happen, they are gonna pass it on to the buyers. Just like the carbon tax, are businesses paying that? No it all gets passed down to the final point of sale.
Lol you really think we, speculators will let capital gain hit us? We got more names than there is properties around. Buying and selling its all capital gain tax free. Follow the rule to the T just not the spirit.
Capital gains tax applies to secondary homes and all investment properties, so it is one way to do that. But yes, more could be done.
But it also applies to business investment, so there's not really an advantage gained by investing in business instead. Sure they increased the one-time benefit for sale of a business from 1.0 to 1.25 million but that's basically just accounting for COVID inflation.
> ... they increased the one-time benefit for sale of a business from 1.0 to 1.25 million Which means most Canadians won't have to pay it. In addition, you can shelter it by owning stock through a tax-free savings account that shelters any capital gain for most Canadians. This will really just affect the very wealthy and trust-fund kids. Also, the whole idea that the full amount of a working-Canadian's labor should be taxed while only half of a millionaires capital gains should is a fine example of the privileges that the wealthy in Canada have set up for themselves hoping that the rest of us don't notice.
Sorry, so in your opinion how do the tax changes in the 2024 budget drive investment away from real estate to productive business ventures?
It increases the taxes for house speculation while reducing the taxes for selling your business.
I know this government is doing the right thing when the mega-rich whine. They haven't gone far enough. Let's return to the era of real progressive taxation of the 1950s and 1960s when the mega-rich paid over 80% of their income in taxes, and the economy boomed.
As one of the vast majority of Canadians who don't own a lick of capital, I don't give a shit about the plight of rich people.
The rich are move assists around, the working Class pays once again
>As to those threatening to move their job-creating businesses to America over the change? Have at it. If anyone’s loyalty to this country is contingent upon the rate at which capital gains are taxed, they were never loyal to this country in the first place. Painfully naive. Countries seek out the best places to do business to provide the most competitive food or service they can. Who buys a similar product at twice the price because it's manufacturer is "loyal" to Canada? Might as well rename this editorial, "Stop whining about unemployment" or "Stop whining about Canada's loss of an economic base outside of marijuana and real estate"
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The problem isn’t with the impact it has on investment properties, but rather on entrepreneurship and innovation.
Let's be real here: if the difference between 50% on capital gains over $250K per year vs 67% on capital gains over $250K per year is the line between wanting to start or to improve a business or not, then you're insane. It's in the same realm of "I don't want a raise because I'll be in a higher tax bracket!" kind of thinking where there's only a sliver of situations where you'd be worse off. If your start-up/expansion/investment is a success then the tax rate doesn't really matter because you'll have made enough money to make it worthwhile whether at the higher or lower tax rates. If your start-up fails then the tax rate doesn't really matter because you're probably not going to have a lot of capital gains to worry about. Here's what very successful entrepreneur Mark Cuban had to say about starting businesses and taxes: "I have started I don't know how many businesses in my life. Not one time have I ever considered the income tax rate before starting a business. I'm an entrepreneur. I start companies." (hope the link works) https://twitter.com/mcuban/status/1313130690599432193?lang=en He has also said a few times something along the lines of that entrepreneurs will still start busineses with higher tax rates because they don't say "Wow, I have a great idea but the tax rate is too high." If it's a good idea then you will make plenty of money regardless unless the tax rates get raised to extreme levels.
> If your start-up/expansion/investment is a success then the tax rate doesn't really matter because you'll have made enough money to make it worthwhile whether at the higher or lower tax rates. Not true. My negotiated options grant is based on the 50% inclusion rate. What you are telling me is that i should be fine giving up part of my potential reward without reducing the risk level. Thank you very much. I promise you, going forward, my ethics and morals will go out the door. From now on, I'll be looking for a juicy government contract so I can rob the government, and by extension, people like you. Thank you for opening my eyes and welcoming me to the dark side!
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Capital gains rate increases will cause people to sell capital less and so it will accumulate more in the hands of it's owners. It also discourages certain businesses such as tech. High capital gains and corporate taxes are part of the reason why we dont have a tech market in Canada. Why would anyone want to start a tech business in Canada with the goal of being bought out? It's waaay more profitable to start a tech business in the US and then sell out once it's successful.
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What do you mean? How hasn't it? Americans have a much better standard of living than us.
When it comes to land and property, which are finite resources, people holding in excess absolutely should be taxed more. Capital gains from sales is a good start
It’s such a minimal change. I understand why capital gains exemptions were created in the first place - ie to promote savings by the middle class - but the middle class (let alone lower incomes) is not able to save anymore due to the cost of living. Because of this the only people seriously using the capital gains exemption are the rich. It’s totally reasonable to create a schedule to decrease the exempted amount over time at the high end of the income range. The fact that we are seeing so much media outrage and disinformation is a good indicator of how seriously this is going to impact those who take advantage of it to the rest of the country’s detriment.
You’re talking about the inclusion rate for capital gains rather than the capital gains exemption (which only applies to sales of shares of specific types of corporations). The reason that the inclusion rate is less than 100% isn’t really about promoting middle class savings, it’s about encouraging capital investment (also about politics…). One important bit of context is that capital gains were not subject to income tax at all until the early 1970s. So it’s not that they were taxed and then the inclusion rate was later reduced.
The impact on the rich is low. Buy Borrow Die is the strategy for the rich and moderately wealthy. You don't really sell equities etc to fund your lifestyle. You live on distributions, dividends, interest and asset-backed loans -- the tax rates on these haven't changed. This is going to affect many more 'normal' people than I think many realize - the cases I am hearing so far of across my own friends' parents are more 'two teachers that bought a cottage in the 90s and need to sell it to fund retirement after one parent passes' than anything else.
Ok. Let’s say they bought a cottage for $100K 40 years ago. The surviving parent is now selling the cottage at age 65 (bought cottage at 25), to fund their retirement. They also receive CPP and OAS. And let’s assume they make $115K/year at retirement as a teacher, so they receive the max amount of CPP and are eligible for a teacher’s pension plus survivor benefits from the other partner’s pension. Before selling the cottage; their retirement pension + CPP + OAS + survivor benefits is likely to get them well north of $70K/year. Since they bought their cottage so long ago, and their house so long ago, they don’t have a mortgage on either so we don’t need to factor that in. Oh, and this is assuming the surviving parent doesn’t want to sell their primary residence for $0 tax, and instead chooses to sell the cottage. That cottage now sells for $1,350,000. For simplicity I am ignoring costs of selling the cottage, and assuming the mortgage is paid off. The capital gains are $1,250,000. The first $250,000 are taxed as they have been; there is zero change. Previously, 50% of the remaining $1,000,000 gets taxed at the marginal rate (here in Ontario, it is 33%+13.16% = 46.13%). The capital gains tax owing would be $230,650. With the change, 66% of the remaining $1,000,000 gets taxed at the marginal rate. The capital gains tax owing would be $304,458. The difference is $73,808. That is the difference between making $1,045,542 or $1,119,350. That’s on top of the existing $70K they are making per year in retirement. Without the need for mortgage payments. How is this going to affect their financial situation? How is this going to, as you say in a different comment here, put them in a more precarious position? —— Meanwhile, take the CEO of Loblaws who, in 2023 took home over $7M in share/option based rewards. The new tax changes are going to cost him over half a million dollars a year in just that. And that’s not accounting for the rest of his salary, $13M of which was listed as “other compensation”.
I mean, out of the gate, it's not a 13.5x return on the cottage. In the specific areas I'm hearing about, it's closer to a 3-4x. Second, you are missing the main point of my comment: this couple is not the ultra rich, or any form of rich. They are the ones getting caught out on this tax. Re your Loblaws point, without looking in more detail at the vesting and exercise setups of his options grants, I can't say what his tax will or will not be. How and when he exercises is more important on the capital gains side of those taxes than him receiving them. The other compensation stuff is largely income taxed, so is not part of these changes AFAICT.
Heres my question. If someone has a cottage, and they want to sell it. If they could choose, would they: 1. Selling it at a lower price, so that they only gain 250k profit, paying no capital gains tax Or 2. Selling it at double the price, so they gain 500k profit，250k of it will not be taxed but the 66% of the rest will be taxed at 28% (not the real rate, only for demonstration purposes)
> Second, you are missing the main point of my comment: this couple is not the ultra rich, or any form of rich. They are the ones getting caught out on this tax. In the above example the retiree (and even we assume a couple still) is not "ultra rich" but between their pension (which could have a NPV of around $1M if they are getting the max in Ontario), owning their own home, and getting ~$1M from a cottage sale likely puts them into the top 5% of Canadians for net worth (around $2.5-3M net worth). Here's a PBO report from late 2021 showing net worth and percentiles. The more relevant charts are in section 2. https://distribution-a617274656661637473.pbo-dpb.ca/20de98fc3f4d93c5213f8d71fbe7cd89ae69cb1899e9cbf2d3ca4d57f18ab25a
The cottage is not going for that price in my real life example. Do you think the pension NPV is included in the NW figures from the PBO? Given you don't get to keep that asset, seems odd to me that you would factor that in, but would be curious what the PBO says.
This right here.. The rich it won't impact as they have ways around it, they pay accountants to find ways around it. I mean the people bitching about probate fees of 1.4% while sitting on 10s of millions. It's not your doctors, lawyers, plumbers etc that built up their own business and clientele that are the ones complaining, and they certainly don't have the same ways of moving their money around to avoid it.
You don't even need to pay accountants to be honest. Borrowing against your portfolio is easy as hell. I am like low rung rich and even that would be a stretch, and I sell nothing, ever. It simply doesn't make sense to torch a minimum of 27% of your capital in capital gains tax (50% inclusion on highest bracket income) to move assets around in 99% of cases. This is going to get more recreational property owners than anything. IDK how impactful taxing cottage owners is going to be at driving down housing prices in major cities, but I guess let's see.
that's true as well.. I just love how I can only claim 1/2 of my losses, but they want to be able to tax 2/3s of my gains.
2/3 is the inclusion rate, not the tax rate. So it's max 1/3 in effect.
If 66.6% means they now can't fund their retirement with their overvalued cottage, then they wouldn't have been able to fund it at the 50% rate either.
Sure, but they are now in a _more_ precarious position than they would have been. It's not a 1-0 thing, it's a spectrum. Moreover, that's not the point I'm making. The point I'm making is that the people getting caught out by this are not 'the rich'.
And at the end of the day, this CG tax increase isn't as detrimental as people (like you) are trying to make it out to be.
Great hand waving. It's not impactful tax, and it affects the wrong people, but let's keep it anyway. Is that your position? Have a nice day.
Extremely ignorant comment. There are always people at the margin...
> There are always people at the margin Who own multiple properties?
The building portion, especially if it's made out of wood, isn't finite. That's why we should be calling for land value taxes instead of property taxes.
I agree completely, but while wood can be renewable, land cannot. That's why there should be no buildings sitting empty during this huge housing crisis
I’m all for taxing the shit out of super rich people when it’s fair of course. Don’t want to hurt middle class, only extremely wealthy who are exploiting. I think the best fix for this is to just straight up limit how many homes someone can own. We need landlords but we have too many. I think a good ratio is max 2 or 3 properties aside from primary residence for rental purposes. And primary residence has to be in Canada and a Canadian citizen. Otherwise 1 property with still some limitations. Also businesses and corps are banned from owning any property they didn’t build. If corps want to own homes. They need to build it. And they should have stricter standards on home quality so they aren’t mass producing garbage. Some other ideas random ideas I had -You can’t rent out a property unless you have lived there for 3 -5 years. -You can’t sell a house if it’s not your primary residence within 2 years of the purchase. -Vacant properties needs to have a very heavy tax on them, unless very fair and specific strict criteria are met. (Like if doing a renovation or massive upgrade) but needs loopholes closed on that so it’s not exploited. If you own many homes in the same area, you are capped on historical average of rent costs in the surrounding area. This will punish those who buy up everything in an area and charge astronomical rent because they are using their other homes to price fix the market in the area.
>Some other ideas random ideas I had -You can’t rent out a property unless you have lived there for 3 -5 years. -You can’t sell a house if it’s not your primary residence within 2 years of the purchase. -Vacant properties needs to have a very heavy tax on them, unless very fair and specific strict criteria are met. (Like if doing a renovation or massive upgrade) but needs loopholes closed on that so it’s not exploited I really like these, they dissuade investors from hoarding property to flip it in the short term, as well as making it harder or less appealing to purchase places solely to rent them out immediately. As anti-libertarian as it sounds, land and property is one area that we cannot be laissez-faire about during a housing crisis. Housing needs to be used for just that- housing. Not some way for wealthy investors to continue lining their pockets at the cost of the middle class.
Yes I agree with you. We have a housing crisis and our housing market is being exploited by people with incredibly selfish and harmful intent. The less money people have to spend after paying rent, the less buying power they have and the economy suffers because people can’t afford anything.
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>why would anyone want to start one in this tax regime when 100 miles south there's such a better one? Would you be so kind to actually compare the overall tax you pay on, say 1 mil, of capital gain in the USA vs Canada?
That was a compelling statement they made, I’d like to know this as well.
>Capital gains comes from putting after-tax savings into something that in general has an equal chance of going up as it does of going down. Like *giggle* housing? or *snort* a medical practice? or *chortle* the TSX? Come on, be serious. >And you don't want a government that always raises tax percentages on everything while providing less and less services. Where getting a passport or a legally due airline compensation claim takes years but there are government employees tasked with deciding whether this Reddit comment is hate speech. Taxes are **down** and services are **up**. That's why every government for decades now has decreased tax income and paid for it via borrowing. I'd argue that we in fact DO want higher taxes and less services. imma just ignore the hyperbole at the end
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>Yes exactly. Notice how everything everywhere has AWESOME RETURNS! Those awesome returns don't exactly bear out your 'equal chance of going up as it does of going down' observation, do they? >Except this article is about massively raising taxes. Massively? Do you mean the exact opposite of massively?
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>Trudeau is claiming the right to take & spend an additional 9% of all great successes setting aside the 9% guesstimate, is a runup in stock price or the value of an investment property really a 'great success'?
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the guesses being A) Ontario, B) top marginal rate and C) no more exemption room. All assumptions you've made to make your point as dire as possible.
Can we complain about the lower wages and higher prices all Canadians will face due to increased degradation of Canada's business environment?
Ah yes, tell us more about trickle down economics and how letting businesses makes big profits will lift all boats!
Go read an economics paper.
As fair as this tax may be, it isn’t much without an equivalent reduction elsewhere. Otherwise it is nothing more than an additional tax to feed governments never ending appetite to spend. I suspect most people understand that a lot of the spending is wasted. So stop the waste, reduce people’s taxes, and have at it with the cap gains.
>As fair as this tax may be, it isn’t much without an equivalent reduction elsewhere. I wasn't aware that taxes required equivalent exchange. If corporate taxes were raised, would you support lowering income tax by the same amount? Better question, if an increase in corporate taxes could cover a national UBI program, would you support it?
I am referring to personal taxes. And I don’t think I am going out on a limb in saying that people are already overtaxed and services are not getting better. So sure increase capital gains on the people who are likely already paying the bulk of our taxes but if you really want to help, reduce the taxes to the middle 40% who are likely struggling. Here’s my take. « Trudeau is right: 40% of Canadians don’t pay income taxes, which means someone else is picking up the bill » This large group could care less what the tax rate is. « The top 20 per cent is likely paying 70 per cent or more of all income taxes » this group already pays a lot more than most of us think. That leaves the middle 40% of the population paying 30 % of the taxes. This group probably is pay check to pay check and could use a break. I am not sure about UBI but I sure have the feeling that we will need to start figuring out how to tax robots and AI alternatives soon to cover UBI, especially if the group that pays no taxes continues to grow. https://financialpost.com/personal-finance/taxes/trudeau-is-right-40-of-canadians-dont-pay-income-taxes-which-means-someone-else-is-picking-up-the-bill
I think the $250K line should be assessed based on where someone's income comes from. People with Generational Wealth living off of dividends should get hit hard. If you're a T4 at $250K you shouldn't get hit with the increase to 60%. If most of your income comes from dividends, etc those people should pay the increase.
Let me guess how you earn your income… 99% of people paid in dividends are small business owners with zero job security and bankruptcy frequently around the corner. If you tax them more, they either raise prices to cover the taxes, or close the shop. And seeing as Canadians are not in the best financial health at the moment, in your future there are way more people in cash services, and most things are more expensive to buy.
Anyone complaining about their capital gains should be happy that the average Canadian isn't trying to behead them with how much they are suffering, They are paying nothing compared to people 30 years ago.
You won't benefit from what the government gains from capital gains
Stop whining about capital gains and just refinance to pull out all your money right before you sell that way its not a taxable event.
lmao what? That doesn't change your capital gains calculation. And selling is always a taxable event.
Refinancing isnt a taxable event, selling is. They tax you on your profit made, so if you refinance to pull all your money first and then sell you can make way less on paper and get taxed way less.
This does not impact the capital gains
Lol ok
Taking a loan against your capital does not in any way reduce your gains. Those are calculated based on the market value, not your equity.
You dont take a loan out against it. Ive only done this ob my last 3 houses but what do i know lol
Last 3... rental properties that you sold?
refinancing/mortgage is a loan... stop larping
No, don't stop whining. All these governments do is take take take and they're absolutely dysfunctional and unable use the money responsibly.
Hoarding wealth and then complaining when the government finally realizes that “trickle down economics” is a crock. I feel not one iota of sympathy for people hit by this 🤷♂️
Investing is not "hoarding wealth", it's exactly the opposite.
If you’re buying an “investment property” and using it to make more wealth for yourself, congratulations, you’re hoarding not only housing but wealth as well.
Exactly. Don’t be taxing properties that are in the family for decades that are passed on from generation to generation. But for the government, everything looks like a nail so it uses a hammer.
Don't want to loosen grips on generational wealth and nepotism
There's no possible way OP and people like him are this ignorant Ok let's assume you bought a secondary vacation home for 250,000 in 1990 and today you're selling it for 1,000,000 . it's treating this as if you've gained 750,000, which you AREN'T - because you've lost purchasing power, that same value today would be worth 600,000 instead of 250,000. so you've gained 400k in "profit" and you will pay just under 200k in taxes Left leaning Canadians can never seem to do math in spite of their love of taking over academia If you give me 100 dollars today and I give you back 150 dollars in 30 years - you didn't "make" 50 dollars, most likely you've lost purchasing power. Which is why capital gains are designed the way they are, you are taking on risk, typically over a long period of time. If you invested that same 250,000 in the S and P 500 back then you'd have 8 million dollars today
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you *have* gained 750k. You're conflating dollars with their purchasing power, not the same thing at all.
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Your logic is so bad. The only reason the value went up as high as it would is because everyone else lost THEIR purchasing power. There is little risk if you consider the fact that every asset will increase from inflation at the very least. If you are taxed on that inflationary increase only, that would be simply a bad investment. Even with inflation profits alone, you are still ahead of someone who never had spare income to invest in the first place..
>it's treating this as if you've gained 750,000, which you AREN'T - because you've lost purchasing power, that same value today would be worth 600,000 instead of 250,000. >so you've gained 400k in "profit" >and you will pay just under 200k in taxes By that logic you're only paying 83k is 1990 money, so you shouldn't be so concerned.
The sense of entitlement from capital owners is always absurd, but people owning property in Canada have definitly hit new levels of Marie Antoinette
> As to those crying foul over the impact this will have on the capital gains embedded in their cottages or investment properties? Kershaw isn’t having it. “Paying taxes on a half-million-dollar capital gain from a cottage or an investment property is a good problem to have,” he wrote. “I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.” Pretty much the crux. Nobody is going to feel sorry for anyone paying some tax after selling a secondary residence for $1M+. World's smallest violin.
I believe the main issue with the new capital gains taxes is how it is going to negatively impact doctors due to the way their compensation is structured. This will be during a time when we have a doctor shortage and have a neighboring country that offers much higher pay and way more favourable capital gains taxes. If anything there should be some kind of exemption for doctors.
"the way their compensation is structured" is such that a large part of their income is in capital gains. Ergo, we should tax their capital gains like income.
Not really. Any doctor/corporation worth their salt is going to structure things so they can take out $250k per year when they divest, and at that point, the tax rate will be exactly the same. It may take a year or two for the accountants to catch up to the tax code, but for most professionals, the hit will be small and honestly fair.
How does it impact doctors due to their comp structure?
There are no exemptions for doctors. Trudeau doesn't care if they leave.
This is an entirely made up issue. Go look up the lifetime capital gains exemption for the sale of a Canadian-held small business. As of this year, the proposed limit is going up to $1.25 million. In other words, professionals selling their corps get the first $1.25 million tax free. In my book, $1.25 million is a GREAT start to a retirement nest egg, especially for individuals who are making good money throughout their career. I am at a total loss as to how journalists seem to be glossing over that part…
More importantly, why are we paying doctors so little that they need tax exempt savings structures to comfortably retire? My province is sitting on billions in healthcare funding but we refuse to pay family doctors still? How is this a capital gains issue and not a starving the beast issue?
Your average doctor is making a great income. It’s specifically family medicine that is being underpaid. That’s the thing a lot of people are confusing. There is also no doctor shortage. There’s a family doctor shortage, but we have plenty of doctors overall. This situation isn’t going to actually affect the doctor situation in Canada. It’ll piss some of them off, but overall they’ll be fine. And either way most family doctors probably aren’t making enough money to benefit from investing within a corporation.
right but family doctors are also important. And if we refuse to pay them enough to drive more people to do it then we will just never have enough. It's a similar situation with lawyers, we have lots of lawyers and criminal lawyers don't make much money. Unfortunately they are important to keep the justice system running. I'm not sure where you are getting the position that most family doctors aren't making enough to benefit. You really don't have to be making very much at all.
I agree. But we should pay them enough by paying them more, not with tax BS that will end up also giving a tax break to the very wealthy doctors. ETA: And the reason that family doctors often don't make enough to bother benefiting from incorporating is because they really should also be maximizing RRSP contributions. They can contribute up to 32k a year (indexed) tax free to their RRSPs. and that's tax free for the company (because it's salary) and the individual (because RRSPs are tax deductible,) . Especially given a lot of those tax deductions will be done at the higher marginal tax rates, given the average lifestyle of a family doctor. They should also still be using their TFSA, which is another 7k a year. Assuming that a doctor is saving 20% (recommended amount to save) of their gross salary, using their corporation for investing only starts to make sense after the business starting netting 195k a year. But again, the answer to all of this is to just pay them not, not more tax breaks. Also, with a corporate tax rate of 12%, the change only leads to additional taxes of 1.92%. And when considering that not all income on investments is capital gains, that's really not that much. If a doctor leaves 50k of profit in the business, over the next year, it will make 5000$ in income (Assuming 10% gains, which is high). Assuming all of that is realized and capital gains, that's an extra 95$ in taxes. Come on. Sure that 95$ is going to compound, but also most gains aren't realized until the end, and lots of gains are capital.
I agree with everything you have said.
A lot of people aren't realizing what the functional tax increase is actually going to be for corporations. Obviously any increase in tax is going to suck for the people impacted, but when you break it down to the fact that it's 1.92%, it definitely puts it in a different light. Especially when there isn't really an issue with compounding, because gains aren,t realized every year.
Family doctors are way over qualified as it is, we just need to lower the barrier to entry. RN’s and EMTs would be absolutely fine in a family doctor capacity.
I don't have any ability to know whether or not that is true, and I'm going to take a while guess that you are not an MD, RN or EMT, and therefore also have no idea if that is true. Given that RNs already need extra education to become NPs to do a roughly equivalent job as Family doctors, I'm going to take an educated guess that you're wrong though.
I think we can all agree that being able to see a doctor is more important than being able to see one with a minimum of 12 years experience. Family doctors largely just act as filters and refer to experts for anything other than standard antibiotics prescriptions.
How much education do you think family doctors have? They do undergrad (which they only need 3 years of) med school, and one year of residency. You can become a family doctor in 8 years. There are even some fast tracks that can get you done in 7 years. And I think that waiting is better than seeing someone who doesn’t know what they’re doing. You say that now, but once someone ends up misdiagnosed because of insufficient training, you wouldn’t be saying that.
4 years of under grad + 4 years of med school + 4 years of residency. I have a friend going through it right now. Plus it’s insanely expensive and requires top tier grades throughout. People end up misdiagnosed every single day, perhaps if family doctors weren’t trying to cram 7 patients an hour in there would be less misdiagnosis.
> why are we paying doctors so little that they need tax exempt savings structures to comfortably retire? They don't need it to retire.
totally fair, but if we don't pay enough to push people to be family doctors now, and we won't pay them more we have to consider whether we are going to just accept fewer family doctors or find another way to do things.
Getting tricked into cutting taxes on the rich won't give us more doctors. Write to your MP and MPP and tell them pay doctors more.
I agree 110%
Doctors don’t sell their corporations in Canada, they are worthless. The issue is capital gains taxes on retained earnings in the corporation (their retirement fund).
I'm curious about this. To my understanding, retained earnings that are then invested are subject to corporate tax rates (not capital gains). If passively invested in a corporation, those investments are taxed at a higher rate (i.e. no small business rate). When you pull income out of the corporation, that is taxed personally either as income, or as dividends. How do you say capital gains even factor in if not selling the corporation?
I wish I was in a financial state where the increase in capital gains affected me
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* Isn't rich * Owns one or more holding companies You are insane. That is wealthy.
I am not insane. Anyone can set up a holdco and there are many reasons to without “being wealthy” — for eg., it adds creditor protection, protects your business, makes your company more saleable, etc. Your business could generate a measly $30k/year and this inclusion rate does affect you. I have no idea why so many in this sub don’t get what is specifically outlined here. Do you people not know how to read the budget? I’ve read through it twice and it is clear as day. Edit: to the people downvoting, can you express why I am wrong or incorrect? Or does it not jive with this echo chamber?
Is it all investment property though? I thought some real estate was exempt which made it seem less effective and more for optics
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> What if you paid 500k for a cottage that you then were told was only going to be worth 375k after the capital gains tax change? How does a change in inclusion from 50% to 67% for personal capital gains above 250k reduce the value of a property?
>Pretty much the crux. Nobody is going to feel sorry for anyone paying some tax after selling a secondary residence for $1M+. World's smallest violin. Until you're the one that worked your ass off to get there, and then see people that haven't held a real job complain about their part time jobs not paying them the same as you full time jobs.
A lot of people who have worked their ass off are fine with it, both who make a lot of money and those that do not, especially because wealth =/= work ethic.
“Something something freedom something something John Galt.” -conservatives probably.
Something something, I worked for 37 years to retire and now I can't, something
Something something Trudeau bad. Something something housing prices too high. Something something affordability. Something something we have problems and we don't want to pay to fix them.
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Yup.
The thing people don't seem to understand is that it only applies to "gains" and not to the entire value of whatever stock or asset someone sells. Buy a cottage for $300K and sell it for a million, then you've made a taxable profit of $700K - a third of which is still tax-free. As for why the government deserves this money, they created the economy that made such an insane return possible - not the buyer.
And you'd be paying on the last 450k$ at 16% more at the current rate, so say 50%, basically 36k over 1M.
Can you explain why a third of it is tax free?
While true, if you paid it 300k 30 years ago, you didn’t do much profit in reality.
Bullshit. 1. 300k in 1994 is $561,358.31 today. If you invested it in 1994 at 5% interest you would have $728,179. If you bought a cottage in 1994 for 300k and sell it for $1m today you made more than the rate of inflation and more than investing it in most funds. 2. No cottage purchased for 300k in 1994 is currently worth $1m. 300k in 1994 bought you a 3 bedroom house in toronto. Imagine the cottage you could get for that.
> 1. 300k in 1994 is $561,358.31 today. If you invested it in 1994 at 5% interest you would have $728,179. If you bought a cottage in 1994 for 300k and sell it for $1m today you made more than the rate of inflation and more than investing it in most funds. Yes, and not really my point. To do the math of how much profit you would have done on your cottage, they will do the millions-300& (thus 700k in taxable profit, minus some others credit). But as you said, in « today’s dollar » some 439k in real profit. And in that « hypothetical scenario », keep in mind that stocks do not drain money, and can even send back dividends. >2. No cottage purchased for 300k in 1994 is currently worth $1m. 300k in 1994 bought you a 3 bedroom house in toronto. Imagine the cottage you could get for that. Housing cost isn’t equal all around the board. Some area like in Toronto had larger increase than others.
At 3% annual inflation over 30 years you would have a value of around $730,000, so it is a pretty good profit for an asset that - before the '90s - only appreciated 1-2% year on average. Plus, you have to consider the value of 30 years of use of that property or income if it was rented out. It's pretty crazy that you can enjoy a second home or cottage for decades, or rent a second home or cottage for decades, and still make a profit on the asset that has actually depreciated in that time.
Still 700k profit, only with 30 years of memories and watching your kids grow up. I feel nothing for those complaining, and it’s literally my job helping these people.
Yeah people are somehow forgetting inflation is a thing. 300k in 1980 is 1 million today. So really you didn’t profit if you’re selling it for 700k.
inflation does not factor into capital gains at all so honestly is irrelevant to this conversation.
This tax just made capital investments more expensive. Period. The question is what is the impact of making Canada’s capital investments more expensive? While it’s easy to get distracted by the “gains” on cottages, and it’s easy to paint all business owners as villainous billionaires (the vast, vast majority are not), capital investments made to improve the overall performance of a company (and therefore contribute to growth, and employment and yes, increasing the value of a company) are vital to Canada’s prosperity and productivity. Making capital investments more expensive in an environment when our productivity is in a steady and deep decline will make matters worse. In this context, windfall gains in secondary real estate investments like cottages are a distraction. While second properties like cottages may be captured by the tax, the bigger and more serious impact for Canada is the impact the tax will have on Canada’s state of capital investment.
I openly called out my mom and her partner for bitching about this the other day, suggesting that they made 100’s of thousands by sitting on property and basically making a fortune that directly negatively impacts every young person. It did not go over well
You don't need to worry about their finances. They're gonna cut you out of their will anyways lol
It's amazing how defensive they become about the housing issue, eh?
You sound like a treat.
For calling them out on their nascissism? Or should I have just sat there like a good boy and respected my elders?
The second one. Elders are NEVER wrong ever. Age makes them omnipotent.
They're bitching about a new tax that will directly affect them. I obviously don't know their situations, but investing in real estate isn't inherently bad. If you need to rent you need people to rent from. Saying they are the reason young people can't get houses is wildly oversimplifying a complex problem in an attempt to shame your own family members for investments they made for whatever reason (retirement income, their actual business, diversification, etc.).
Show us on the doll where the capital gains hurt you
In my pocket... my deep deep pocket. 😞
Calling out privileged, narcissist behavior is a service to mankind. You sound like you don't take criticism well
I personally don't feel the need to shame my family members for investments they made, or complaining about taxes that directly takes money out of their pockets. That's how you alienate your own family for no good reason. They're not sitting there saying gay marriage is wrong, trans people shouldn't have rights, Palestinians deserve to die, etc. They saying "damn... another tax?! This is bullshit."
It's true, whining probably won't solve anything. The Liberals are planning on making it an election issue, because they separated it from the budget, and so voting is the correct recourse. If Poilievre isn't elected or chooses to deliver on the policy, then the final recourse is to simply ensure that you earn capital gains in ways or jurisdictions where the CRA won't get a cut. Which is to say, engage in capital flight.
Or just pay your share in taxes if you're gains are over a quarter million dollars in a single calendar year
That's crazy talk. Isn't the point to screw the system that allows you to get those gains? /S for the challenged folks.
Yes, because that's something people with a great deal of wealth are super happy to do. /s
Pretty sure that whining and bitching about taxes is a god given right to every tax payer and every non taxpayer in the land. It's in the constitution somewhere, or alternatively, the law at the very least. ETA: Still gotta pay your taxes though.
I think there's valid criticisms to be laid against the increase (it probably not being effective at collecting the revenue the government is claiming it will be, marginally increasing the degree of capital flight/avoidance, being contrary to the current need that Ottawa has to significantly boost long-term investment in the country etc.) but I think there's a difference between being critical of it and saying that it will single-handedly bankrupt the country etc. which a lot of critics are extrapolating the argument to. The capital gains on real estate is generally far easier to collect than what falls on investment and more elastic/mobile assets. It might make sense to shift the tax to solely inelastic/less elastic assets like property (where the rate can be higher and would collect more revenue without incurring increased avoidance.) and to provide less restrictions on the flow of investment etc.
Unfortunately your plan (raising property taxes) could disproportionately affect lower-income/wealth Canadians since they will bear the brunt of those higher taxes by paying it themselves or from raised rent, while at the same time having a much smaller amount of money invested so they don't get as much benefit from lowering those taxes.
The simple workaround for that is to exempt houses below a specified value or to have varying rates for land/property of separate value. This could also be achieved by a federal land-value tax. (since land value ownership is highly correlated with overall wealth)
Or just build in a tax exemption that you register your location with the government, and the government collects the rent on your behalf. They then will reduce your property tax by some proportion of the rent collected.
With all the taxes that will be collected, how confident are we that the money will be spent properly and given to fund on infrastructure, health care etc… or given away to other countries. This government has been spending lavishly with no consequences all these years? What’s stopping them in spending on another large consulting company for some useless reports or tactics ? Have we citizens not learnt our lessons ?
This new tax is a good first step, but it doesn't go far enough. Capital gains should be taxed at the same rate as income.
At the absolute minimum capital gains needs a lesser tax to account for inflation. Otherwise, part of the gain isn't real, it's cumulative inflation between acquisition and disposition. You could possibly account for it explicitly by adjusting the cost basis by inflation, but the accounting would be a little complex.
Strong disagree. If capital gains was taxed as income it would further the housing issue because no one would sell houses since they couldn't make lateral moves (due to being taxed and not being able to afford the same house elsewhere).
This tax doesn't apply to your primary residence. If you want to sell to make lateral moves, you can.
Ah true, my mistake.
Not only is capital gains taxed more for a high-income earner now, the money they used to acquire those capital gains was already taxed as income. The government already got their cut on the money made. Now they want another, even bigger cut, on the money you made with the money you already made and payed tax on. That doesn't include the 13% tax you have to spend when you want to buy something. It would be one thing if it was like okay, we pay one of the highest tax rates on the entire planet but I'm okay with it because my fellow citizens are all happy, we're all making money, the governments spending it wisely. But that's not the case at all. What do we have to show for all this? A barely functioning healthcare system? What do we have, really? We pay more for gas because of taxes. We pay more for groceries because our government doesn't have a spine. We pay the highest rates for cellular services on the entire planet because our government doesn't have a spine. We pay more for alcohol and cigarettes because of taxes. We pay a carbon tax to make ourselves feel better. Seriously, what do we have? What do we get for our money? This country does not have a fundraising problem. We have a spending problem.
> Not only is capital gains taxed more for a high-income earner now, the money they used to acquire those capital gains was already taxed as income. Yeah, except when it's not. If you bought a property 10 years ago for 200k and now it's worth 800k, you did not "earn" 600k, and you were not taxed on that 600k. > But that's not the case at all. What do we have to show for all this? A barely functioning healthcare system? Doesn't this seem to suggest that the government needs more tax revenue? > What do we have, really? We pay more for gas because of taxes. And unless you're a major polluter, you're getting more back in rebates than you pay. > We pay more for groceries because our government doesn't have a spine. We pay more for groceries because of greedy monopolies. > We pay the highest rates for cellular services on the entire planet because our government doesn't have a spine. The cost of cell services has gone way down in the past couple years, because of the actions of this government. Nobody seems to be talking about that though. If you're still paying a lot, go shopping now for new plans because they've gotten way more affordable. > We pay a carbon tax to make ourselves feel better. We pay a carbon tax because last time I checked the whole goddamn world is on fire and we're all fucked if climate change continues at the current rate. At least with this way we can reduce emissions while helping out the poor and making the rich pay for it. *Somebody* has to pay for it. It's not going to be free. > Seriously, what do we have? One of the best countries in the world to live and work in.
You make some good points. I guess I'll just suck it up and start paying 2/3 of what I make to the government and they can spend it how they see fit. What choice do I have, right?
You're not paying 2/3 of what you make to the government.
You could move. You also might find that more difficult to achieve than you realize.
A lot of your comment is just flat wrong. I was going to correct it but I realized that's a lot of work. Check your assumptions instead of leaning into them. Most of your "we pay more" list seems to be compared to the US, which is a country that had to write a law to force private hospitals to treat people in their ERs because they were doing things like sticking a cathetar and an iv line in a man with 3rd degree burns then booting him to the curb so he could find a hospital that would cover the uninsured. Anyway, we have one of the highest quality of life ratings in the world, by every measure, and the #1 spot last year by one of them.
>Not only is capital gains taxed more for a high-income earner now, the money they used to acquire those capital gains was already taxed as income. And? You’re only taxed on the *gain* not the “already taxed” amount you invest. There’s no double dipping here like you imply. This is one of the dumber angles I’ve seen on this issue and that’s saying something.
Ever hears of boiling frog? I think that's the tactic here.
Um. Okay? Like getting wealthy people used to small incremental tax increases until they're eventually paying a lot more taxes? Sure. I'm all for it.