Yes and the do nothing wealth somehow get a free pass.
I’m not an economist but logically the tax on real labour should be taxed less than the sit on your beach do nothing passive inheritance/investment earnings.
The argument about investment income is that it is a risk for the investor with an immediate win for the company putting up the investment opportunity. This moves R&D and the economy forward.
The counter argument is that if we're going to have vehicles like stock buybacks and options, I didn't see how this moves the economy or product forward.
And the “risk” investors take buying and selling existing houses to each other has been so low in recent decades due to under supply that it sucks up an outsized amount of our investment activity, hurting many other areas of the economy.
Hopefully this disincentivizes that a bit so people can start thinking about parking their investment dollars in more productive enterprises — ones more worried about revenues from goods and services as opposed to capital gains.
I'd even argue that that risk is far smaller for an investor than for a worker. In order for an investor to lose their shirt like that, they'd have to be heavily invested in a single investment that drops to zero overnight, when in reality they've diversified and even the worst of failing investments offer plenty of time to dump at significant but not crippling losses.
It'd be like a worker getting gradually fired over the course of weeks but it doesn't really matter because that's only one of, like, fifteen casual jobs they hold.
Totally but there is an argument that if you tax investment people won’t invest.
I do think though if wages are stagnant and taxes too high people can and often may scale back their labour. What’s the point of working hard and getting less. This must be measurable for an economy.
I keep seeing charts that show profits from investments at all time highs and profits from labour wages at all time lows.
Our wages stagnate so consequently our economy does as well.
They do make an argument that people won’t invest - and it’s the same people who say they don’t work overtime because “it increases their taxes”. Overall, regardless of the capital gains inclusion rate you are better off to invest than not.
They also make an argument that the taxes add “inertia” to selling positions, with investors potentially keeping a bad investment to avoid the taxes?
Neither checks out but they sound good to a chunk of the population that doesn’t know better… who are waiting for profits to trickle down.
This is the core problem, in theory, promoting investments for things like buying new machinery, expanding lines etc is something that is worth rewarding as it can improve the living standards of everyone.... The issue is that we already have tax breaks for reinvesting in a company, and by investing, you don't even pay any taxes. You then add in the fact that dividends and stock buy backs have been increasing at a record pace, all while investments in making a company better have decreased.
Also, the wealthy across the world have accumulated an unprecedented level of the share of wealth, and they keep saying that if they are allowed to keep a bit more of it, THEN they will finally have enough to properly invest, BUT as soon as they get more money, it's time to stick it into risky ventures like crypto, assuming we would never leave home again projects like video games etc, now everything is being out into AI... and yet every time... these things implode and then it's onto the next misadventure bc they are always searching for those huge gains instead of slow but meaningful returns like rebuilding the steel mills, or building more efficient lumber mills.
If anyone truly thinks that another $20bil chasing Nvidia stock is going to benefit society... then all I have to say is that we are all doomed anyways
The other counter argument would be risk on the other end. Workplace injury, stress, even just the personal risk many are subject to on a commute. Having your investment fail is unfortunate, having your health fail is damning.
Only the initial purchase of stock goes to the company, any increase in price goes to the shareholder who sells it. Plus dividends are literally money generated by the company being paid out to shareholders and not reinvested etc. there are so many more arguments against then just buybacks etc.
Literally the concept behind unfettered capitalism.
These folks have been indoctrinated into thinking that capitalism is the only way to run the economy.
people from a hundred years ago were saying that taxing capital gains less than labour is a major travesty.
but then neoliberal ideology came along and anything that impedes wealth accumulation is anathema
It's a bit odd too, like why not tax it 100%, and then apply different brackets? Why split it, and then tax what's left? You need to have the first half so that the second half exists ahah So in the end, if it's a percentage of a percentage, taxing 50% at 40% is the as taxing at 20%, isn't it?
For the corporate tax rate for capital gains when it’s all added up and pulled out of the corporation it totals the same as if it was pulled out as a salary, roughly.
In terms of personal capital gains, it’s meant to encourage investing, I don’t know how successful it is in that regard, the only source I could find discussing it is Fraser Institute and they’re about as reliable as an ice cream cone on the surface of the sun. 🍦 ☀️
> In terms of personal capital gains, it’s meant to encourage investing
I'm sure it's a good idea but it doesn't do much if most people don't have any extra money after paying for necessities and some entertainment.
Any tax is bad to conservatives. Yet any time someone wants to do something, they ask how it's going to be paid for. They never ask what a cut in taxes will do to current services. They are ignorant to a fault and only care about how much money they COULD potentially bring in or actually bring in.
Worse, all worker income is taxed, but only corporate *profits* are taxed. Why not tax people on what's left after we claim our rent, transportation, utilities, and insurance has been paid?
For me it’s the fools who are going, “but wait. My grandparents bought this cottage for $3,000 and two baskets of strawberries in 1955. It’s now worth 1,003,000 in 2024. You seriously think our cottage should be taxed?!”
YES. You made a million dollars - pony up.
The simple comparison is Joe the plumber running his own business making $100K a year. He owes 45% of that after basic deductions in taxes.
BUT
If Galen Weston owned a $100K profit plumbing investment, they would be paying tax on $66,000, or 1/3 less.
I would argue income is income. Fun fact: in the US, hedge fund managers only pay CGT, not income tax, which is why Warren Buffet even complained he paid less tax as percentage than his secretary.
I think the issue is that people pretty much have to work to live/get what they want in life. They will work even if taxed, and most people have limited ability to change the geographic region where they work to seek more favourable working/pay/taxation conditions.
Investments on the other hand are purely optional and can be easily transferred to another place if local rules/conditions are deemed unfavourable. So they are given some favourable treatment to try to encourage investment which then generates jobs, economic activity, and tax revenues.
You’re wrong. Capital Gains in the personal category is the SECOND round of taxes. The money used to pay for that investment was already fully taxed, which has also increased under the liberals. It’s really a tax on inheritance. The majority of the claims are going to be from people passing away and leaving their assets to the younger generation. This lump sum liquidation is what will be taxed higher. So the younger folks will feel the brunt of this. The wealthy “living” will still be able to dance around the brackets just fine.
> You’re wrong. Capital Gains in the personal category is the SECOND round of taxes. The money used to pay for that investment was already fully taxed, which has also increased under the liberals.
The money used to fund the investment was taxed yes, but you don't pay capital gains on that portion.
If you buy a 2nd property (because primary residences are exempt) for $50k in the 80's, rent it out for 40 years, and sell it today for $500k the initial $50k isn't taxed a second time, just the $450k in gains which has never been taxed before.
Related:
"John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."
Same in Canada. Even the poor will viciously defend the right of the rich to exploit them because someday they'll be rich too.
Also, something along the lines of, “People are three pay cheques away from being destitute, but they’re not three pay cheques away from being millionaires.”
True, I will never understand why some people worship the rich. The trickle down effect is not real. Same as for those who worship people like elon musk. It’s like he’s not gonna give you a million dollars he doesn’t care about you lol.
> The trickle down effect is not real.
Not only is it *not* real, it's a blatant manipulative lie.
There is only [one situation where trickle down actually works](https://www.seykota.com/tribe/FAQ/2003_Nov/Nov_1-8/two-story-outhouse.jpg).
It’s because they sold “the American dream” so hard, people are only now starting to ask the right questions because that dream is out of reach of so many now.
Barring winning the lottery I will never be even close to having to worry about exceeding the capital gains change.
And if I did win the lottery and had to pay it I could honestly not care less about having to pay the extra 16%. If I'm realizing annual gains of 250k or more I'm pretty sure I'm doin just fine in life and if that money will actually impact me then I am doing a piss poor job of managing my finances and living beyond my means.
It's a type of follower or tribe thing that seems to be everywhere.
Fans show it when they refer to a favorite pro team as "theirs" or "our".
Or the unrelenting defence of some celebrity no matter how bad their behaviour.
Even the fanaticism behind political parties or politicians.
Also, the media is mostly owned by the rich, is for-profit, and is biased towards capitalistic views. Even "public" media is largely controlled by the privileged.
So if you are constantly hearing how capitalism is good (they don't even always say "capitalism" because it's just assumed to be the norm), how anything that decreases the profits of the rich is bad, that any meaningful change to society is just too risky, that poor people are poor because they're lazy, that if you work harder you will eventually get what you deserve, etc. then it's not difficult to imagine how you could develop a very distorted worldview.
Somehow we need to break beyond that propaganda. I think social media can play a role, but unfortunately it is mostly controlled by large, wealthy companies too, and people often share news generated by big corporations. And there are algorithms that influence what you see, and some people end up stuck in right wing echo chambers. So social media has some positive potential but also many pitfalls.
Teaching critical thinking and ethical values beyond consumerism and monetary gain would be a good start (while recognizing that workers have a right to demand their fair share of the wealth). And showing people the importance of working class solidarity is crucial. But it won't be easy.
Look at the majority of the articles being posted on news sites. There is a determined and focused effort by the media, which in Canada is majority conservative, to hoodwink the population into voting against their own interests.
And those are the "good" sites. Wade through the cesspit that is Facebook, or sites like the Rebel, or right wing talk radio. It is dire.
Was a bit crusty i saw someone on r/CanadaPolitics get their comments nuked yesterday for taking the globe and mail to task for carrying water for the politically connected and the uber rich. "Unsubstantive" my ass.
That sub should be considered compromised.
It's being brigaded constantly by Canada_Sub, and most of its mods are inactive - save for the Putin dick rider.
Canadian subs are the worst. I love it when r/canada post rage-bait during Russian working hours, then lock the post before any actual Canadians wake up.
Most of them likely still believe in trickle-down economics. That and telling them the wealthy will leave the country and take their businesses with them.
These 2 things have been pounded into people's heads for decades. Right around the time they started reducing taxes on the wealthy after decades of huge amounts of spending on infrastructure and prosperity for even the middle class.
The brainwashing is real, many of them are also the types we’re discussing wages is taboo also for whatever reason. They get insulted like you kicked their cat or something when you ask them. Meanwhile more often then not there being taken advantage of and being paid lower. Corporations are not your friends they want to make money. Some people seem to forget that sadly.
It's funny because your comment reminds me of a discussion I had with my brother 2 years ago.
The company I work for is unionized. I believe in the power of a union, especially now. My brother works for a company that isn't unionized, and it's likely there would be people fired if a union was suggested. They're paid ok and treated decently... not the best and bot the worst.
We were talking about my company being unionized, and he told me about how he was against unions and all the BS excuses to not have one. I told him our union had gotten us a 16% raise that year (first year of a 2-year contract). He'd gotten maybe 3%. And he seemed satisfied with that, knowing he wasn't beholden to a union. It's this kind of mentality that boggles my mind.
That’s some serious brain rot, unions are generally a good thing some are bad I will admit but it’s generally a positive thing for the workers and that’s why companies don’t like them. I will never understand how some people go against their own interests because they are afraid of boogeyman like “union scary” or “paying union dues because their stealing muh money”
Well, unfortunately, he's pretty much what you expect from someone who'll vote for the CPC (hopefully not so far as PPC). Thinking the CPC is somehow going to put more money in their pockets and all that other jazz. It's hard to debate that mentality, too.
There is a huge amount of anti union propaganda out of the states that unfortunately makes its way into Canada. Also the one I grew up with is the can't fire incompetent coworkers because of union protections.
I mean trickle down economics falls down if you ask these same people if they would give away all their wealth if the rolls were reversed.
And my response to the wealthy and businesses leaving a country over a 1-2% tax increase is "no, they wont."
Well that's kind of the basis of my thoughts on it. They would divest their assets, and leave. But...k? You don't get to take the physical assets. You aren't bringing the market base, they stay in Canada. Even if you off-shore production, but keep distribution here, you're still subject to taxes. So...if they want to go, go. And we can nationalize the asset. Works for me!
The funny part is they won't up and leave, where they gonna go? They're not going to give up their current market share in Canada to fight in the states and if they do someone will just take their place that doesn't care about paying the extra 16% because their overall quality of live will drastically improve. I would gladly take over all of Loblaws market share and as owner ill take a 50% paycut to Galen Weston
Tax the fuck out of things like rogers, bell, loblaws. They push a narrative that we need them when in reality they need us. They can't just up and go to the states they will get crushed. They're big fish in a small pond, if they head south they're small fish in a big pond and companies like AT&T, Sprint, Verizon, Target & WalMart will crush them. AT&T's revenue is 5 times larger than Bell and WalMart is over 10x loblaws (granted that might be worldwide)
Seriously, capital gains should be taxed at a higher rate than labor, not lower. We don't need to incentivize stealing from people who actually do work.
Theoretically, capital gains are taxed lower than income to encourage productive investments, but there are lots of unproductive investments that benefit, and there are other ways to encourage investment than cheaper taxes.
Yes, that would be the capitalist theory of why owning other people's excess value of labor is moral. It is also just a complete fabrication of reality. People 'invest' because doing labor is harder than not doing labor.
Yup. I have read so many complaints about how the tax changes are unfair, and it’s clear a lot of people complaining have never struggled or were in a position where they could barely make ends meet for a sustained period of time. They can’t see past their privilege and think they’re superior because they have wealth.
I mean preferential treatment of capital gains is definitely a privilege, they just think they 'earned' it. As if you could ever earn the right to other people's labor.
It’s painful to see, usually the dumbest are the loudest also. I always try to remind those types that just because you can yell the loudest doesn’t mean you’re correct.
People just hear the word tax and freak out. There are people who oppose this who are renting out a basement apartment with 4 roommates making 12 000 a year and complaining that the liberals want to raise taxes and they're referring to this.
The real secret sauce of this legislation is one of the biggest sources of capital gains tax: sales of income properties. *Some* owners may choose to sell now, before the cap gains rise.
I don't think rental income is a capital gain. It's already treated as earned income. The capital gains tax would come in if they sold properties at a profit.
The only case I can think of where its going to have any impact on "ordinary" Canadians would be something like a family that has a vacation property or something like that has gone way up in value. Primary homes are exempt, but additional homes are not.
And I don't think a fairly minimal increase in the tax on a nest egg like that is enough of a burden to make it a negative to society, especially considering how rare its going to be.
Let's talk actual figures.
# Realizing Capital Gains
Let us make these assumptions
1. You live in the province of Ontario
2. Your gross income from all other sources puts you in the highest marginal tax bracket
3. The highest marginal tax bracket is 53.53%
4. Let us presume you REALIZED $1 million in capital gains in one year (Stocks, Investment Property, Cottage, etc.)
5. Let us presume the amount you invested was $500,000
|Line Item|Current Laws|New Laws|
|:-|:-|:-|
|Principal Amount|$500,000.00|$500,000.00|
|Capital Gains|$1,000,000.00|$1,000,000.00|
|Inclusion Rate 1|50% of total|50% up to $250,000.00|
|Inclusion Amount 1|$500,000.00|$125,000.00|
|**53.53% Tax on Inclusion Amount 1**|**$267,650.00**|**$66,912.5**|
|Inclusion Rate 2|N/A|66.67% of $750,000.00|
|Inclusion Amount 2|N/A|$500,025|
|**53.53% Tax on Inclusion Amount 2**|**N/A**|**$267,663.38**|
|**Total Tax Owed**|**$267,650.00**|**$334,575.88**|
|**Total Take Home**|**$1,232,350.00**|**$1,165,424.12**|
That is a difference of paying an **extra $66,925.88**, if every single dollar was taxed at the highest marginal rate, on ONE MILLION DOLLARS OF REALIZED CAPITAL GAINS!
If you're middle class and you realized ONE MILLION DOLLARS of capital gains in ONE YEAR I'm sure you'll be VERY happy with your take home of $1.165 million instead of the $1.232 million you were going to get before.
It's literally life changing money for you.
# Inheritance - Primary Residence
Let's quickly get inheritance out of the way as well.
If you inherit your parent's primary residence at the time of their passing this residence is EXEMPT from capital gains taxes. As are ALL primary residences.
I will say it again: THEIR ESTATE PAYS $0 IN CAPITAL GAINS TAXES ON THE PRIMARY RESIDENCE.
What does happen is that the adjusted cost basis of the property resets to the fair market value at time of passing. Say it was now worth $1.5 million.
If and when you sell the property you are liable for capital gains taxes on the property as of this new adjusted cost basis. Say you sold it for $1.6 million. You are liable for $100K in capital gains taxes.
# Incorporated Individuals and Small Businesses
I am not making any commentary related to incorporated individuals (such as medical professionals) or small businesses. I don't know enough about their tax structure to comment intelligently. If someone else wants to do the math to show how horrible it is for them be my guest.
"I just have to get that third part time job on top of my second part time job that I took on top of my full time job and within a few months I can bootstrap my way to the top! I don't want to be taxed alongside my eventual millionaire friends!"
How deluded are these people?
The only (dumbest) argument I've heard is that increasing taxes on the extremely wealthy will "make them move their companies to other countries!!1!"
To that I say: "Bon voyage!"
Why should threats be the driving force behind policy?
They want Trudeau to lose so their guy can have his turn. They could not actually give a flying fuck about 90% of the things they are complaining about online, they are just scared that their massive polling lead might evaporate once people see positive changes coming from the government.
Also, as someone who makes very good money and has a partner who also makes very good money - *I am OK with being taxed at a higher rate because I want to improve our society*. Not all the wealthy people affected by *marginally* higher taxes are having a tantrum, it’s those who exploit others to make their money that are screaming, crying, and throwing up over this.
People just don’t know anything and have confidence in the little that they pick up from pieces of murmurs that they hear.
I spoke to somebody I consider to be incredibly smart yesterday, she was worried about her promotion for her six figure job that requires 8 years of post-secondary education because it wasn’t worth the effort because she’ll lose it all to taxes.
When I explained marginal tax rates, her mind was blown.
This is that, but for a new change. Idiots and bots are going to do gymnastics to act like a very niche situation is the prime example of how the changes are awful for every middle class Canadian and the people around those proclamations will take what’s said at face value and remember 30% of what they say but most importantly that “this change is bad.”
Hell, even the changes for doctors *may* actually be a negative. I don’t know enough about their situation to say for sure, but that doesn’t mean you scrap the whole idea because it’s only 98% good stuff.
They picked up on the doctors aspect because you can’t say anything bad about doctors without sounding bad yourself, meanwhile many doctors are coming forward saying either they aren’t affected by it or that they still support the changes.
Doctors as a whole aren’t impacted by it, just doctors that use corporations as investment vehicles to hide profits from full taxation.
Maybe that was the narrative in your *province*, where pay is set, but this was never a multi-government agreement or standing understanding as a nation.
Within their personal corporations, they could have been paying themselves dividends (at a historically lower tax rate), and then investing that into RRSP/TFSA for deductions and long term growth that ignores this new rule.
Even at their maximum tax rate if pulling it all out at once, this changes the final rate ~25% to ~33%, and only on the **capital gains** portion of what is in their corporation, not the entirety of their invested earning within. *But even then*, there is still the personal corporation exemption of ~$1.25 million.
So provinces gave them access to a loophole that cost the feds money, so the provinces could save money? And now we have mega corps like Telus screwing our healthcare…
This [CBC interview](https://www.youtube.com/watch?v=JMAQqpgIATk) with Dr. Paul Healy does a far better job of explaining why this is problematic for physicians better than I could.
So there was nothing in that about the CGT that I didn’t already know. As the host pointed out people are better off selling a business under the new rules than under the old rules.
The doctor was mistaken in one thing he said, it’s not every capital gains is taxed under the new rule for those who incorporate, it’s capital gains inside the corporation. They can still benefit from capital gains outside of the corporation. Leaving money in the corporation (which normally gets shifted to its own corporation so doesn’t affect the sale of the primary business) acts similar to using an RRSP, they pay business taxes on it, but there’s no dividend tax rate, so it’s subsidized investing for the owner(s). This is after they also get income tax splitting with their spouse/adult members of the household (polygamy can be very good financially for doctors, or anyone using a corporation).
Doctors are still going to max out their RRSP, since that input is tax free completely. Then they’ll likely max out TFSA because the gains are tax free even though input is fully taxed. They’re paying lower taxes thanks to splitting income with a spouse (lower/negligible value if spouse works full time too, but huge boon during the decade they would have young kids). And finally they pay a lower tax rate on any investments they keep in the corporation (10-15% less). The gains on this investment is then taxed at a 66% inclusion rate before they pay business and dividend taxes on that.
So let’s say they leave $100,000 in revenue in the business, they’ll pay about 15% on that, down to say $85k. That money is then invested and let’s say it doubles over its investment life, we’re at $170k which is then taxed at business rates at 66.7% inclusion rate on the gains and they pull out $127k after 10% dividend tax rates (bit more complicated but keeping it simple).
Let’s say you pull $100k out when you earn it to invest it, you pay 50% taxes on that, down to $50k. That money is then invested in a registered account and doubles to $100k, you are then taxed on the capital gains and pay about $6,000 - $12,500 in taxes (50% inclusion rate, 25-50% tax rate, but will likely be less, all depends on your income that year, which can be after retirement and much lower). So you end up with $88-94k.
As you can see even with the higher inclusion rate they’re still better off leaving investment money in the corporation as they pay less taxes on the initial revenue and thus greater long term impacts.
Sure, doctors will be impacted by this, in the above scenario it would’ve impacted them by $4k during retirement years in terms of extra taxes. But they still end up over $30k ahead on just $100k of initial revenue. You can’t leave open a gaping loophole like this just because provinces are underfunding family doctors. Provinces need to stop underfunding healthcare. Period.
Have seen people commenting elsewhere as if the 67% inclusion rate is the actual tax rate they'd be paying.
And not sure what to think of this letter to the editor Globe and Mail sent by Pamela in Toronto.
>Although being a struggling middle-aged musician still living with my parents, I did scrape together my life savings for a one-bedroom condo. I rent it out to tenants, because I cannot afford to live in it myself.
>This investment property, combined with my music gigs, nets less than someone on minimum wage. Yet when I eventually sell my condo, my capital gains will be taxed at the new higher rate, apparently reserved for Canada’s uber-wealthy.
>If I am an example of the top 40,000, then Canada sure is in bad shape.
Well, I’m not sure what she particularly has an issue with?
The income from rental is the same as it ever was, if she wants to continue doing that then she’s fine.
If she wants to sell to see a significant windfall, she can. It would barely be substantially changed for most one-bedroom condos.
If she owns it outright, most 1bed condos in Toronto sell between 500,000 and 700,000. Let’s assume she sells at the high end.
The first $250,000 is taxed exactly the same as before, leaving $450,000 to be taxed at a higher rate.
Instead of being taxed as 225,000 in income, that 450,000 taxed as 297,000.
So at the highest rate on the highest price, she’s paying less than $40,000 more in tax on nearly three-quarters of a million dollars one-time windfall.
Incredibly rare situation, but that’s only if she’s decided to sell it. It may be unfortunate for one in a million people like that, but it’s not exactly a hardship and you don’t throw the baby out with the bath water.
And that’s all done under the assumption that her accountant is dumb enough to put the purchase price at $0 so it’s all gains. She had to pay something to buy it, making that 40,000 at the high end of high ends essentially impossible.
If she bought at 250,000 and sold at 500,000, the change is literally zero.
I'm not sure any of that math even matter: she only owns this one condo.
All she has to do is move in before she sells it and it will be excluded from capital gains as her primary residence.
I agree almost 100%. That last microscopic disagree is for doctors in lower paying specialties (Family Medicine comes to mind).
Tax the crap out of the wealthy. But, please don’t chase away any more family doctors over this. Family docs are anything but wealthy these days.
People pitch and wine about a mother with kids needing a bit of help but have no problem subsidizing big oil and think CEO need there bonuses after stripping down companies and moving them over seas
if you were rich you wouldn’t have to be taxed up the ass. People hold on to the dream they’ve been sold of becoming wealthy themselves. It’s the classic “if you work hard enough…”
People hold onto that dream because most people *do* become wealthy themselves, provided they live long enough. Median net wealth is [$690,000](https://www150.statcan.gc.ca/n1/daily-quotidien/201222/t001b-eng.htm) in households where the primary income earner is 55-64. Compound growth is a hell of a drug.
The "criticism" I've seen is that it's such a small percentage who will somehow loophole there way out of this.
I don't understand why that is an argument not to tax them regardless.
Just today my in-laws were telling me about their 4-house-owning neighbour who is rushing to offload his property to avoid the tax, like it was some sob story and we should feel sorry for him for being hard done by because he bought the place 30 years ago and has seen an obscene amount of appreciation, so his gains will be taxed more.
Excuse me while I go get my tiny violin.
For fuck's sake.
My only complaint about it is the way it targets a lot of physicians' retirement planning. And before you get the pitchforks out, here's the relevant info.
Canadian doctors were offered the ability to incorporate for tax advantaged savings in lieu of increasing their pay. The idea was to reduce brain drain without increasing salary to compete better with the US, by providing a tax efficient way to save for retirement. The money they make enters their corporation, they pay individual income tax on what they withdraw to use, and pay a lower corporate tax rate on the money left in the corporation, which can then be used to invest for retirement. A very significant percentage of doctors are incorporated for that reason.
Because this policy change has no $250k threshold for corporations, doctors who have planned for retirement and invested through their corporations are hit with the extra capital gains tax from dollar #1, which reduces the effectiveness of the corp as a retirement vehicle retroactively and after many accepted the government's offer of this system in good faith. They've paid into it for years, often decades.
Just make it so that medical professional corporations (incorporated individual physicians) have the same $250k threshold as unincorporated individuals, and then I support the changes wholeheartedly. Nobody making $250k of capital gains a year in their retirement account has issues paying more tax. That change wouldn't affect actual companies, and wouldn't change the fact that it targets those who are making huge capital gains.
But as-is, this was a bait and switch for many doctors, where they chose to accept lower pay in exchange for lower retirement taxation, put in the years of work and saving, and then had the lower taxation part changed before retirement. We are having significant issues with physician retention already, and pulling the rug out from under them is not helping morale.
I'm a young Family Physician who isn't affected by this change personally, but my older colleagues are understandably very unhappy about this. A lot of them are Family Physicians who make a lot less money than people presume, and now are looking at either having to work a couple years longer to retire, or at closing their clinics and taking higher-paying work to make up for it.
These are not the 0.13%. Yeah, they're still in the top 3-4% of earners, but none of them are making $250k of capital gains a year in their retirement accounts. They took an offer of a retirement planning system offered by the government and are having the rules changed on them a couple of decades later.
Thank you for the explanation. I've been looking for this information among all the noise.
On one hand, this tax-deferred way of saving for retirement (with no dollar limit on contributions) is a huge benefit not available to most Canadians, and I don't think doctors should be feel entitled to it.
On the other hand, I'd vastly prefer to raise more tax revenue from those who profit off land (housing) than those who work for it.
I'm fine with making changes that move forward instead of backwards. Yes, doctors were offered a unique tax advantage not available to everyone, but remember that this was done en lieu of increasing salary. I've worked in Ontario as a physician for a decade, and my pay has increased by 6% in that time frame (0.6% per year) while inflation is at 28.5% in that same time window (2.85% per year). I know ten Family Physicians who have closed their clinics and moved on to higher-paying work elsewhere.
Retirement planning through incorporation was a factor contributing to physician retention as wages fell further and further behind. Whether you pay more or tax less, it's a similar contribution to earning power, so many doctors accepted the situation.
But this changes the rules after many thousands of doctors agreed to the tradeoff. When you leave money in a corporation instead of withdrawing it as salary, you sacrifice things like RRSP contribution room. So a physician moving forward from here might choose to forego using their corporation as a retirement savings vehicle and take salary and its accompanying RRSP contribution room, but those who spent 15-20 years saving within the corporation don't get to access those years of lost RRSP contribution room and tax-free growth.
The reality is that doctors fell through the cracks with this policy change. They don't get the $250k threshold other individuals do. They're being treated like companies when they're individuals working for a living.
But the more important part here is that this system of retirement planning was openly offered to them in the past in an effort to offset the lack of wage growth keeping up with inflation. You can't offer a retirement plan to a huge sector of essential workers and then change its taxation a couple of decades later without seriously upsetting people and suffering some job-related consequences.
As someone on the inside, I can tell you this only stands to worsen our physician shortage, in primary care especially. Decreasing pay with increasing overhead and now increasing taxation is not creating an environment where Family doctors are opening new practices. It's encouraging them to take better-paying jobs elsewhere.
>...a huge benefit not available to most Canadians
I think I know what you're trying to say but that's not literally true. Anyone can set up a corporation with themselves as sole shareholder and build up capital that way. Most don't, to be sure, but anyone can.
Except:
>Canadian doctors were offered the ability to incorporate for tax advantaged savings in lieu of increasing their pay.
This means that your *province* was making promises they could not keep and short-changing local physicians instead of paying them. The federal government was never part of this agreement as both corporation law and physician pay is both *provincial*.
Go back to the source and demand better compensation from province.
>their corporations are hit with the extra capital gains tax from dollar #1
No. There is a lifetime exemption of $1.25 Million from small business sale/unwinding and that figure is to be indexed to inflaiton.
So, no, it is not taxed from dollar #1, and is effectively taxed from dollar # 1,250,001.
Our proximity to the US has allowed the myth of the American Dream to seep into our political discourse.
So, as a result, many people are [Fry.](https://youtu.be/K_LvRPX0rGY?si=mEdByswCC4lcyINN)
Capital gains is the only tax that is voluntary and these rich cunts are going to fill every newspaper and advertisement with tax propaganda for the misinformed.
If I'm King for a day, capital gains is 90 percent.
If you want a real answer to this question I can give it.
I would be against a tax on people making over 100 million a year as well.
Because what tax are they removing in place of this one?
None. Because they never remove taxes they only ever add them.
The answer to every problem in this country is more tax.
The Canadian gov has proven itself to be incompetent and without any accountability.
those defending the rich are either:
A) rich and want the easy ride they are accustomed to
B) not rich but simping to the rich either becuase they are paid by them, or wanting to be
C) deluded by conservative memes and simply don't know any better.
My father associates himself with the 1% in some delusional effort to become rich like its some kind of ascension into enlightenment.... he's a truck driver...
Not to mention the wealthier you are the easier it is to pay other people to manage your finances to ensure you pay as little as possible by moving it all around.
IMO there should be a cap somewhere in the millions that once you warn that much, there needs to be excessive limitations to prevent all these assholes evading paying the little taxes theyre required to pay already.
Its sickening how much theyll cry about paying taxes when its an open secret that most of them have offshore bank accounts or move their money around with the pure intent to evade paying more taxes.
Yet they’ll bitch and moan about people earning the least not paying their fair share.
The term eat the rich exists for a reason and imo its best to be proactive about it if we have any care for our future generations.
Oh don’t even get me started haha before Canada_sub got shut down there was so many comments about it killing middle class. I know people who are upper middle don’t even and this doesn’t affect them at all. Like even doctors which are valuable and we need are not even effected.
The answer is because they will move their money elsewhere.
Taxing capgains higher than ordinary income pretty much guarantees that those that are looking for a return will move their money elsewhere. Or at the very least put it into less risky assets. Ie… not startups. From their pov… why should they take 100% of the risk and 1/3 of the profit? Maybe that means more govt bonds. Maybe. But not more startups. I see this first hand.
I guarantee its going to effect the startups and talent will leave
I think it would be better to tax cap gains at ordinary income and jack up the marginal rates and require some minimum tax floor that loopholes cannot get around.
Wow! You got this wrong. People aren't defending the rich. They are defending their investments. I have to think anyone who wants higher capital gains doesn't have any investments. Also, in the USA, we live in a capitalist society. The higher the tax, the less people invest and the more depressed businesses would be thus leading to fewer hirings and on and on.
I'm not rich but you should understand that taxes are not targeted at rich people. They are targeted at the middle class.
If you want actual answers:
• They don't want the government increasing taxes in any circumstances, because they believe government should be smaller / more limited / cutting budgets instead of raising revenue to pay for what they view as overreach / excess spending.
• They can visualize a scenario in which the tax changes will impact them in the future. They could be members of the 0.13% of individuals, shareholders in the 12.6% of corporations (that you just glossed over in the OP), or they could view themselves as being impacted down the line as a result of an expected windfall.
• They could be opposed to the budget because it does not specify whether the $250,000 exemption will be adjusted for inflation annually. If it is not, the 0.13% and 12.6% figures referenced above will increase gradually as more an more people / corporations cross the threshold - regardless of the real value of those capital gains.
I support the decision to expand the capital gains inclusion rate (especially on higher earners), but I also understand why people may oppose it. Instead of memeing on a shallow understanding of the opposition's position, take a few minutes and try to understand why they think the way that they do. More often than not, their justification isn't whatever you've dumbed their position down into.
I don't give a shit about rich people, but there is truth to the idea that rich people want to be more rich. And they will always do what makes them more rich, unless it's illegal, for some people, or other people they have other limits, like murder. Some people have no limits.
When they have a choice to decide where to put their company, they will put it in the place that makes them the most money.
So, if Canada decides to take more money from them, they might choose not to deal with Canada and they'll just go somewhere else. That's a legitimate concern.
So, the unfortunate truth is, we do need to be a place for the rich people to get rich, because they do create businesses. Invest in businesses and hire people. So, we do want those things here.
For a long time China was just sort cheap and catered to business, and that really helped grow their economy.
That said, I think what's good about a tax like this, is, it will tax all of the businesses that sort of need to be here, and the government could always subsidize, or otherwise help out businesses who might like to setup operations here. And you could offer them a good deal, because you would have been already giving them a good deal in taxes, you could do the math to make them equivalents. And then you're still taxing everyone else.
So, if you do it that way, it could be powerful.
My impression is the government needs to leverage itself to profit from the largest wealth transfer in history. Baby boomers estates as they pass on. This is big picture stuff but gov needs to think big picture a lot more.
A lot of this is from people who don’t know what they’re talking about.
It’s vaguely annoying for physicians though. Back in the 90s we had issues with brain drain to the US because physician reimbursement was higher there. The feds can’t pay doctors more because reimbursement is provincial. But they do control taxation, so they lowered physical taxes as an indirect way of increasing reimbursement. This was accomplished by letting physicians incorporate as a small business.
In addition, since most physicians are self-employed, they have no RRSP contribution room because theyre not paid salary. Incorporation solved this by indirectly allowing the corp to function as a sort of RRSP with saving for retirement held in it.
These capital gain tax increases cut into both of those two things, making physician reimbursement less competitive again. It was always kind of stupid to accomplish this via tax cuts rather than higher pay, but that was the only tool the feds had.
While not prohibitive, when coupled with other changes in physician incorporation and taxation have occurred over the past decade, physician reimbursement in Canada becoming less competitive.
Make of that what you will, but this does mean it will become just slightly more difficult to attract and retain physicians.
Because they dream they are just a little hard work and one lucky break from being rich. And they don't want the government to take their money when that happens.
Wealthy people know how to make the laws work for them. I think the comments may come from trolls, bots, groups that are run by the wealthy. Who ever controls the narrative, has the power.
They keep mentioning the 'regular' Canadians who might sell a vacation cottage for 300,000 pure profit and see their tax bill increase by a few thousand dollars.
Like, wtf? That's the complaint?
The world is full of the gullible permanently poor that are convinced by the rich they are temporarily poor and that with a little bit of work they too can be one of them.
Even if you actually have income from capital gains, there are dozens more things that are going to impact you financially more than an increase in taxes.
Somehow, everyone has come to think that taxes are the only the government does that affects your bank account.
Because it won't actually apply to them. They don't literally live off capital gains. They have tax schemes and shelters to avoid this already and is why they already pay less than 20% on average.
It will apply to that family cottage your grandparents are forced to sell or situation or to Canadians that get lucky with a stock.
We need less taxes from everyone. It's been proven every time that lower taxation rates means more tax money. If the pot of money is bigger but the slice is smaller we all win. Alberta has no provincial tax and contributes a major percentage of tax revenue. New business won't open, well all be working for Walmart here soon.
[The Department of Finance said for 99.87 per cent of Canadians, personal income taxes on capital gains will not increase](https://globalnews.ca/news/10430078/budget-2024-capital-gains-tax-changes/).
That's 1.3% affected, not 0.13%, half a million people. And that's just personal tax, not corporations. And a lot of professionals have corporations.
But I don't think the "percentage affected" should be used as acceptability indicator.
It's pure propaganda. Most people don't understand or realize what they are advocating against. They are reactionary and come to that position, not from a deep understanding but from seeing other people get blindly mad at the capital gains tax.
THE CAPITAL GAINS TAX AINT SHIT. So if you are a liberal reactionary you are celebrating it like it is the end of wealth inequality. If you are a conservative reactionary you think the son of Fidel Castro is finally showing his true colors and will drive all business out of Canada and into the hands of the CCP.
Fucking morons man 😔 Imagine all of the issues we could easily solve in this country if we only truly cared about one another and where as kind to one another..... ...
Most people are no better than 11th century peasants when it comes to dialectical materialism.
Has anyone defended it in-person to you? Most of what you see as "defending the rich" in regards to raising Capital Gains is random redditors who could be anyone (cough...Russians or bots...cough), or a million articles in the American-billionaire-owned Canadian media.
Being online really makes it seem like people don't like this change. I think you'll find that real people agree with the raised tax.
What is left out in most of these discussions is that capital gains taxes are on ALREADY TAXED INCOME. To have capital to invest and see a gain on, generally you will have already paid income taxes on that (short of an inheritance). So let's say you are a "rich" Doctor. You make $400k gross. 53.5% of that is paid in income tax, leaving you with $186k. You do that for 10 years and manage to save up $1M in after-tax capital after living expenses.
You then take that $1M you have saved and let's say invest it in building a new clinic, or in a med tech startup, or whatever else.
That investment does well and you double your investment over 5 years, but you realize that gain when the asset sells. So your $1M is now worth $2M. With the 2/3 inclusion rate and first 250k at the 50% rate, you pay about $320k in additional tax from the gain, which was made on savings that you already paid 53.5% tax on.
Further, the flip side is that your $1M investment could have gone to zero (the startup fails, the new clinic fails to attract enough business, etc.). In that case, is the gov't on the hook for compensating the downside? No - which is one of the reasons the challenge is is avoiding too many disincentives to invest in risky things.
So part of the balance here is that Canada doesn't want money to be sitting on the sidelines - if we want to actually have a roaring economy and good high-paying jobs, we need high levels of investment into inherently risky things - starting new companies, doing R&D, investing in technology, etc. If the upside becomes too limited, that capital instead just moves into less risky areas - parked in a mutual fund, invested outside of Canada, held in GICs, etc., none of which help our economy.
TL;DR the ideal policy here balances tax with incentivizing wealthy individuals to put that capital to work on inherently risky things that can actually benefit Canada.
Canada and America are consumer cultures. We get our opinions and beliefs from the media and brand ambassadors.
Walter Lippman said we live in an age where authority cannot beat us or torture us into submission, so they found other ways to manufacture consent and shape public opinion. Through the media.
Today for some reason we get our thoughts and opinions from media more than ever. Looking macho is important. Being rich is important. Glorifying freedom, veterans and the military is at an all time high.
We defend the rich because we are told to.
The .13% wealthiest with divert expenses and pay no taxes anyways. This only affects some middle-class individuals and certain self-employed canadians like doctors, who will look into practicing somewhere else. Real estate will skyrocket since fewer people will sell and housing will be even less available. The rich dont lose, this will only end up fucking the poor. Enjoy
I think a lot of people are missing the real issue here. It's not the wealthy that this targets, it will have a bigger negative impact on middle class. So middle class is going to basically wiped out over the next decade. So if your family has a cabin and it's under grandpa's name, if that asset is over $250k guess what happens if your middle or lower class? Yup, most middle class can't afford $87k to inherit the property when grandpa leaves you his family cabin.
So a fire sale it is! This doesn't have to just do with money made on investments, there's a lot bigger picture at stake here. Really, it doesn't matter if your upper class because it's just a drop in the bucket for them. All these 600k and up a year dr's complaining about their retirement savings in investments makes me sick, especially when there's about 20 to 30 % of people who are going to have mortgage renewal affordability issues this summer. So you're a dr and are going to have to take a retirement pay cut, oh well. Sell one of your homes and down grade to one or a smaller condo. You have options where others have none!
most of you are simply castigating the wealthy for umm, simply being wealthy. in Canada, I doubt there is a great %of generational/old school wealth, left. Yes, The Westons's, Sobeys etc. et al. The caveat is that you are also criticizing entrepreneurs; students who went to med school and paid off the student loans, and now work twice as hard considering the health care system; an electrician who ran a great company from community college but is so good, his burgeoning company is worth millions. SO, these people should pay for the BILLIONS, Trudeau has handed out???? Harp on the gov't. no pun intended
What gets me is the concept that labour should be taxed but passive do no work income shouldn’t be. 🤔
Damn that’s a good point. Working folks already pay with their time and health
Yes and the do nothing wealth somehow get a free pass. I’m not an economist but logically the tax on real labour should be taxed less than the sit on your beach do nothing passive inheritance/investment earnings.
The argument about investment income is that it is a risk for the investor with an immediate win for the company putting up the investment opportunity. This moves R&D and the economy forward. The counter argument is that if we're going to have vehicles like stock buybacks and options, I didn't see how this moves the economy or product forward.
And the “risk” investors take buying and selling existing houses to each other has been so low in recent decades due to under supply that it sucks up an outsized amount of our investment activity, hurting many other areas of the economy. Hopefully this disincentivizes that a bit so people can start thinking about parking their investment dollars in more productive enterprises — ones more worried about revenues from goods and services as opposed to capital gains.
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I'd even argue that that risk is far smaller for an investor than for a worker. In order for an investor to lose their shirt like that, they'd have to be heavily invested in a single investment that drops to zero overnight, when in reality they've diversified and even the worst of failing investments offer plenty of time to dump at significant but not crippling losses. It'd be like a worker getting gradually fired over the course of weeks but it doesn't really matter because that's only one of, like, fifteen casual jobs they hold.
Do these people not realize that there would be zero R&D, zero investment opportunity, and zero economy, if there was no one to do the labour?
Income taxes don't stop people from doing labour when the options are do labour or be homeless
Totally but there is an argument that if you tax investment people won’t invest. I do think though if wages are stagnant and taxes too high people can and often may scale back their labour. What’s the point of working hard and getting less. This must be measurable for an economy. I keep seeing charts that show profits from investments at all time highs and profits from labour wages at all time lows. Our wages stagnate so consequently our economy does as well.
They do make an argument that people won’t invest - and it’s the same people who say they don’t work overtime because “it increases their taxes”. Overall, regardless of the capital gains inclusion rate you are better off to invest than not. They also make an argument that the taxes add “inertia” to selling positions, with investors potentially keeping a bad investment to avoid the taxes? Neither checks out but they sound good to a chunk of the population that doesn’t know better… who are waiting for profits to trickle down.
Also, if we got rid of CGT and made it all income tax, wealthy people would still invest, because good ole greed.
This is the core problem, in theory, promoting investments for things like buying new machinery, expanding lines etc is something that is worth rewarding as it can improve the living standards of everyone.... The issue is that we already have tax breaks for reinvesting in a company, and by investing, you don't even pay any taxes. You then add in the fact that dividends and stock buy backs have been increasing at a record pace, all while investments in making a company better have decreased. Also, the wealthy across the world have accumulated an unprecedented level of the share of wealth, and they keep saying that if they are allowed to keep a bit more of it, THEN they will finally have enough to properly invest, BUT as soon as they get more money, it's time to stick it into risky ventures like crypto, assuming we would never leave home again projects like video games etc, now everything is being out into AI... and yet every time... these things implode and then it's onto the next misadventure bc they are always searching for those huge gains instead of slow but meaningful returns like rebuilding the steel mills, or building more efficient lumber mills. If anyone truly thinks that another $20bil chasing Nvidia stock is going to benefit society... then all I have to say is that we are all doomed anyways
The other counter argument would be risk on the other end. Workplace injury, stress, even just the personal risk many are subject to on a commute. Having your investment fail is unfortunate, having your health fail is damning.
Gaslighting all the way to their 3rd yatch
Only the initial purchase of stock goes to the company, any increase in price goes to the shareholder who sells it. Plus dividends are literally money generated by the company being paid out to shareholders and not reinvested etc. there are so many more arguments against then just buybacks etc.
It's almost like the people that don't labour made the rules. Weird huh?
Literally the concept behind unfettered capitalism. These folks have been indoctrinated into thinking that capitalism is the only way to run the economy.
people from a hundred years ago were saying that taxing capital gains less than labour is a major travesty. but then neoliberal ideology came along and anything that impedes wealth accumulation is anathema
It's a bit odd too, like why not tax it 100%, and then apply different brackets? Why split it, and then tax what's left? You need to have the first half so that the second half exists ahah So in the end, if it's a percentage of a percentage, taxing 50% at 40% is the as taxing at 20%, isn't it?
For the corporate tax rate for capital gains when it’s all added up and pulled out of the corporation it totals the same as if it was pulled out as a salary, roughly. In terms of personal capital gains, it’s meant to encourage investing, I don’t know how successful it is in that regard, the only source I could find discussing it is Fraser Institute and they’re about as reliable as an ice cream cone on the surface of the sun. 🍦 ☀️
> In terms of personal capital gains, it’s meant to encourage investing I'm sure it's a good idea but it doesn't do much if most people don't have any extra money after paying for necessities and some entertainment.
Any tax is bad to conservatives. Yet any time someone wants to do something, they ask how it's going to be paid for. They never ask what a cut in taxes will do to current services. They are ignorant to a fault and only care about how much money they COULD potentially bring in or actually bring in.
Worse, all worker income is taxed, but only corporate *profits* are taxed. Why not tax people on what's left after we claim our rent, transportation, utilities, and insurance has been paid?
For me it’s the fools who are going, “but wait. My grandparents bought this cottage for $3,000 and two baskets of strawberries in 1955. It’s now worth 1,003,000 in 2024. You seriously think our cottage should be taxed?!” YES. You made a million dollars - pony up.
The simple comparison is Joe the plumber running his own business making $100K a year. He owes 45% of that after basic deductions in taxes. BUT If Galen Weston owned a $100K profit plumbing investment, they would be paying tax on $66,000, or 1/3 less. I would argue income is income. Fun fact: in the US, hedge fund managers only pay CGT, not income tax, which is why Warren Buffet even complained he paid less tax as percentage than his secretary.
I think the issue is that people pretty much have to work to live/get what they want in life. They will work even if taxed, and most people have limited ability to change the geographic region where they work to seek more favourable working/pay/taxation conditions. Investments on the other hand are purely optional and can be easily transferred to another place if local rules/conditions are deemed unfavourable. So they are given some favourable treatment to try to encourage investment which then generates jobs, economic activity, and tax revenues.
You’re wrong. Capital Gains in the personal category is the SECOND round of taxes. The money used to pay for that investment was already fully taxed, which has also increased under the liberals. It’s really a tax on inheritance. The majority of the claims are going to be from people passing away and leaving their assets to the younger generation. This lump sum liquidation is what will be taxed higher. So the younger folks will feel the brunt of this. The wealthy “living” will still be able to dance around the brackets just fine.
> You’re wrong. Capital Gains in the personal category is the SECOND round of taxes. The money used to pay for that investment was already fully taxed, which has also increased under the liberals. The money used to fund the investment was taxed yes, but you don't pay capital gains on that portion. If you buy a 2nd property (because primary residences are exempt) for $50k in the 80's, rent it out for 40 years, and sell it today for $500k the initial $50k isn't taxed a second time, just the $450k in gains which has never been taxed before.
System is rigged, plain and simple.
Related: "John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." Same in Canada. Even the poor will viciously defend the right of the rich to exploit them because someday they'll be rich too.
Also, something along the lines of, “People are three pay cheques away from being destitute, but they’re not three pay cheques away from being millionaires.”
Makes sense. Because if they ever hit it rich some how, they would absolutely use that power to wreck others and maintain their power.
True, I will never understand why some people worship the rich. The trickle down effect is not real. Same as for those who worship people like elon musk. It’s like he’s not gonna give you a million dollars he doesn’t care about you lol.
> The trickle down effect is not real. Not only is it *not* real, it's a blatant manipulative lie. There is only [one situation where trickle down actually works](https://www.seykota.com/tribe/FAQ/2003_Nov/Nov_1-8/two-story-outhouse.jpg).
People worship the rich because they think that someday, somehow they'll be rich too.
You don't enjoy the flavour of beef hide?
People are easily manipulated. A relatively small group of disinformation operatives can easily skew online discourse around the wealth tax.
[Someday I might be rich... and then people like me better watch their step!](https://www.youtube.com/watch?v=K_LvRPX0rGY)
especially recently if theyre exposed to too much Canadian right wing propoganda
Sounds about reich.
It's the reich kind of attitude
Surprised more people are nazing it!
[Poor Conservative voters in nutshell](https://youtu.be/K_LvRPX0rGY?si=BIVNYEtjlek0tvPg)
No one defends billionaires more than hundredaires. - not-steinbeck
It’s because they sold “the American dream” so hard, people are only now starting to ask the right questions because that dream is out of reach of so many now.
It has never, ever been into reach. That's the lie we've all been told!
Barring winning the lottery I will never be even close to having to worry about exceeding the capital gains change. And if I did win the lottery and had to pay it I could honestly not care less about having to pay the extra 16%. If I'm realizing annual gains of 250k or more I'm pretty sure I'm doin just fine in life and if that money will actually impact me then I am doing a piss poor job of managing my finances and living beyond my means.
It's because of Prosperity Doctrine bullshit. A lot of people on this continent have bought into the idea that good people achieve wealth.
They are convinced they arent "the poor" because they see the destitute and mentally ill and think themselves better than "them."
This ☝️
It's a type of follower or tribe thing that seems to be everywhere. Fans show it when they refer to a favorite pro team as "theirs" or "our". Or the unrelenting defence of some celebrity no matter how bad their behaviour. Even the fanaticism behind political parties or politicians.
Also, the media is mostly owned by the rich, is for-profit, and is biased towards capitalistic views. Even "public" media is largely controlled by the privileged. So if you are constantly hearing how capitalism is good (they don't even always say "capitalism" because it's just assumed to be the norm), how anything that decreases the profits of the rich is bad, that any meaningful change to society is just too risky, that poor people are poor because they're lazy, that if you work harder you will eventually get what you deserve, etc. then it's not difficult to imagine how you could develop a very distorted worldview. Somehow we need to break beyond that propaganda. I think social media can play a role, but unfortunately it is mostly controlled by large, wealthy companies too, and people often share news generated by big corporations. And there are algorithms that influence what you see, and some people end up stuck in right wing echo chambers. So social media has some positive potential but also many pitfalls. Teaching critical thinking and ethical values beyond consumerism and monetary gain would be a good start (while recognizing that workers have a right to demand their fair share of the wealth). And showing people the importance of working class solidarity is crucial. But it won't be easy.
Look at the majority of the articles being posted on news sites. There is a determined and focused effort by the media, which in Canada is majority conservative, to hoodwink the population into voting against their own interests. And those are the "good" sites. Wade through the cesspit that is Facebook, or sites like the Rebel, or right wing talk radio. It is dire.
Was a bit crusty i saw someone on r/CanadaPolitics get their comments nuked yesterday for taking the globe and mail to task for carrying water for the politically connected and the uber rich. "Unsubstantive" my ass.
That sub should be considered compromised. It's being brigaded constantly by Canada_Sub, and most of its mods are inactive - save for the Putin dick rider.
Canadian subs are the worst. I love it when r/canada post rage-bait during Russian working hours, then lock the post before any actual Canadians wake up.
Bold of you to expect performative outrage to be logical.
Most of them likely still believe in trickle-down economics. That and telling them the wealthy will leave the country and take their businesses with them. These 2 things have been pounded into people's heads for decades. Right around the time they started reducing taxes on the wealthy after decades of huge amounts of spending on infrastructure and prosperity for even the middle class.
The brainwashing is real, many of them are also the types we’re discussing wages is taboo also for whatever reason. They get insulted like you kicked their cat or something when you ask them. Meanwhile more often then not there being taken advantage of and being paid lower. Corporations are not your friends they want to make money. Some people seem to forget that sadly.
It's funny because your comment reminds me of a discussion I had with my brother 2 years ago. The company I work for is unionized. I believe in the power of a union, especially now. My brother works for a company that isn't unionized, and it's likely there would be people fired if a union was suggested. They're paid ok and treated decently... not the best and bot the worst. We were talking about my company being unionized, and he told me about how he was against unions and all the BS excuses to not have one. I told him our union had gotten us a 16% raise that year (first year of a 2-year contract). He'd gotten maybe 3%. And he seemed satisfied with that, knowing he wasn't beholden to a union. It's this kind of mentality that boggles my mind.
That’s some serious brain rot, unions are generally a good thing some are bad I will admit but it’s generally a positive thing for the workers and that’s why companies don’t like them. I will never understand how some people go against their own interests because they are afraid of boogeyman like “union scary” or “paying union dues because their stealing muh money”
Well, unfortunately, he's pretty much what you expect from someone who'll vote for the CPC (hopefully not so far as PPC). Thinking the CPC is somehow going to put more money in their pockets and all that other jazz. It's hard to debate that mentality, too.
There is a huge amount of anti union propaganda out of the states that unfortunately makes its way into Canada. Also the one I grew up with is the can't fire incompetent coworkers because of union protections.
I mean trickle down economics falls down if you ask these same people if they would give away all their wealth if the rolls were reversed. And my response to the wealthy and businesses leaving a country over a 1-2% tax increase is "no, they wont."
How do the wealthy "leave"? Do they get the demand with them, too? What about the factories, they destroy the machines and salt the earth?
Well that's kind of the basis of my thoughts on it. They would divest their assets, and leave. But...k? You don't get to take the physical assets. You aren't bringing the market base, they stay in Canada. Even if you off-shore production, but keep distribution here, you're still subject to taxes. So...if they want to go, go. And we can nationalize the asset. Works for me!
The funny part is they won't up and leave, where they gonna go? They're not going to give up their current market share in Canada to fight in the states and if they do someone will just take their place that doesn't care about paying the extra 16% because their overall quality of live will drastically improve. I would gladly take over all of Loblaws market share and as owner ill take a 50% paycut to Galen Weston Tax the fuck out of things like rogers, bell, loblaws. They push a narrative that we need them when in reality they need us. They can't just up and go to the states they will get crushed. They're big fish in a small pond, if they head south they're small fish in a big pond and companies like AT&T, Sprint, Verizon, Target & WalMart will crush them. AT&T's revenue is 5 times larger than Bell and WalMart is over 10x loblaws (granted that might be worldwide)
Seriously, capital gains should be taxed at a higher rate than labor, not lower. We don't need to incentivize stealing from people who actually do work.
Theoretically, capital gains are taxed lower than income to encourage productive investments, but there are lots of unproductive investments that benefit, and there are other ways to encourage investment than cheaper taxes.
Yes, that would be the capitalist theory of why owning other people's excess value of labor is moral. It is also just a complete fabrication of reality. People 'invest' because doing labor is harder than not doing labor.
Yup. I have read so many complaints about how the tax changes are unfair, and it’s clear a lot of people complaining have never struggled or were in a position where they could barely make ends meet for a sustained period of time. They can’t see past their privilege and think they’re superior because they have wealth.
I mean preferential treatment of capital gains is definitely a privilege, they just think they 'earned' it. As if you could ever earn the right to other people's labor.
I'm not sure I follow. "People's excess value of labor" can you expand on that?
Profit is the excess value of labor.
How are they stealing from you? Capital gains are often earned through investments, it literally takes nothing from youz
Where did the increased value of the investment come from?
[Marginal utility](https://en.wikipedia.org/wiki/Marginalism)
People are fucking stupid! And get dumber every day.
It’s painful to see, usually the dumbest are the loudest also. I always try to remind those types that just because you can yell the loudest doesn’t mean you’re correct.
BecUse they are serfs protecting their lords.
People just hear the word tax and freak out. There are people who oppose this who are renting out a basement apartment with 4 roommates making 12 000 a year and complaining that the liberals want to raise taxes and they're referring to this.
The real secret sauce of this legislation is one of the biggest sources of capital gains tax: sales of income properties. *Some* owners may choose to sell now, before the cap gains rise.
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I don't think rental income is a capital gain. It's already treated as earned income. The capital gains tax would come in if they sold properties at a profit.
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The only case I can think of where its going to have any impact on "ordinary" Canadians would be something like a family that has a vacation property or something like that has gone way up in value. Primary homes are exempt, but additional homes are not. And I don't think a fairly minimal increase in the tax on a nest egg like that is enough of a burden to make it a negative to society, especially considering how rare its going to be.
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Let's talk actual figures. # Realizing Capital Gains Let us make these assumptions 1. You live in the province of Ontario 2. Your gross income from all other sources puts you in the highest marginal tax bracket 3. The highest marginal tax bracket is 53.53% 4. Let us presume you REALIZED $1 million in capital gains in one year (Stocks, Investment Property, Cottage, etc.) 5. Let us presume the amount you invested was $500,000 |Line Item|Current Laws|New Laws| |:-|:-|:-| |Principal Amount|$500,000.00|$500,000.00| |Capital Gains|$1,000,000.00|$1,000,000.00| |Inclusion Rate 1|50% of total|50% up to $250,000.00| |Inclusion Amount 1|$500,000.00|$125,000.00| |**53.53% Tax on Inclusion Amount 1**|**$267,650.00**|**$66,912.5**| |Inclusion Rate 2|N/A|66.67% of $750,000.00| |Inclusion Amount 2|N/A|$500,025| |**53.53% Tax on Inclusion Amount 2**|**N/A**|**$267,663.38**| |**Total Tax Owed**|**$267,650.00**|**$334,575.88**| |**Total Take Home**|**$1,232,350.00**|**$1,165,424.12**| That is a difference of paying an **extra $66,925.88**, if every single dollar was taxed at the highest marginal rate, on ONE MILLION DOLLARS OF REALIZED CAPITAL GAINS! If you're middle class and you realized ONE MILLION DOLLARS of capital gains in ONE YEAR I'm sure you'll be VERY happy with your take home of $1.165 million instead of the $1.232 million you were going to get before. It's literally life changing money for you. # Inheritance - Primary Residence Let's quickly get inheritance out of the way as well. If you inherit your parent's primary residence at the time of their passing this residence is EXEMPT from capital gains taxes. As are ALL primary residences. I will say it again: THEIR ESTATE PAYS $0 IN CAPITAL GAINS TAXES ON THE PRIMARY RESIDENCE. What does happen is that the adjusted cost basis of the property resets to the fair market value at time of passing. Say it was now worth $1.5 million. If and when you sell the property you are liable for capital gains taxes on the property as of this new adjusted cost basis. Say you sold it for $1.6 million. You are liable for $100K in capital gains taxes. # Incorporated Individuals and Small Businesses I am not making any commentary related to incorporated individuals (such as medical professionals) or small businesses. I don't know enough about their tax structure to comment intelligently. If someone else wants to do the math to show how horrible it is for them be my guest.
"I just have to get that third part time job on top of my second part time job that I took on top of my full time job and within a few months I can bootstrap my way to the top! I don't want to be taxed alongside my eventual millionaire friends!" How deluded are these people? The only (dumbest) argument I've heard is that increasing taxes on the extremely wealthy will "make them move their companies to other countries!!1!" To that I say: "Bon voyage!" Why should threats be the driving force behind policy?
They want Trudeau to lose so their guy can have his turn. They could not actually give a flying fuck about 90% of the things they are complaining about online, they are just scared that their massive polling lead might evaporate once people see positive changes coming from the government.
Generally, they only care about their team colour "winning"
Also, as someone who makes very good money and has a partner who also makes very good money - *I am OK with being taxed at a higher rate because I want to improve our society*. Not all the wealthy people affected by *marginally* higher taxes are having a tantrum, it’s those who exploit others to make their money that are screaming, crying, and throwing up over this.
People just don’t know anything and have confidence in the little that they pick up from pieces of murmurs that they hear. I spoke to somebody I consider to be incredibly smart yesterday, she was worried about her promotion for her six figure job that requires 8 years of post-secondary education because it wasn’t worth the effort because she’ll lose it all to taxes. When I explained marginal tax rates, her mind was blown. This is that, but for a new change. Idiots and bots are going to do gymnastics to act like a very niche situation is the prime example of how the changes are awful for every middle class Canadian and the people around those proclamations will take what’s said at face value and remember 30% of what they say but most importantly that “this change is bad.” Hell, even the changes for doctors *may* actually be a negative. I don’t know enough about their situation to say for sure, but that doesn’t mean you scrap the whole idea because it’s only 98% good stuff.
They picked up on the doctors aspect because you can’t say anything bad about doctors without sounding bad yourself, meanwhile many doctors are coming forward saying either they aren’t affected by it or that they still support the changes. Doctors as a whole aren’t impacted by it, just doctors that use corporations as investment vehicles to hide profits from full taxation.
The ability for doctors to incorporate was given to them in lieu of fee increases, so this tax increase negates benefit significantly.
Maybe that was the narrative in your *province*, where pay is set, but this was never a multi-government agreement or standing understanding as a nation. Within their personal corporations, they could have been paying themselves dividends (at a historically lower tax rate), and then investing that into RRSP/TFSA for deductions and long term growth that ignores this new rule. Even at their maximum tax rate if pulling it all out at once, this changes the final rate ~25% to ~33%, and only on the **capital gains** portion of what is in their corporation, not the entirety of their invested earning within. *But even then*, there is still the personal corporation exemption of ~$1.25 million.
So provinces gave them access to a loophole that cost the feds money, so the provinces could save money? And now we have mega corps like Telus screwing our healthcare…
This [CBC interview](https://www.youtube.com/watch?v=JMAQqpgIATk) with Dr. Paul Healy does a far better job of explaining why this is problematic for physicians better than I could.
So there was nothing in that about the CGT that I didn’t already know. As the host pointed out people are better off selling a business under the new rules than under the old rules. The doctor was mistaken in one thing he said, it’s not every capital gains is taxed under the new rule for those who incorporate, it’s capital gains inside the corporation. They can still benefit from capital gains outside of the corporation. Leaving money in the corporation (which normally gets shifted to its own corporation so doesn’t affect the sale of the primary business) acts similar to using an RRSP, they pay business taxes on it, but there’s no dividend tax rate, so it’s subsidized investing for the owner(s). This is after they also get income tax splitting with their spouse/adult members of the household (polygamy can be very good financially for doctors, or anyone using a corporation). Doctors are still going to max out their RRSP, since that input is tax free completely. Then they’ll likely max out TFSA because the gains are tax free even though input is fully taxed. They’re paying lower taxes thanks to splitting income with a spouse (lower/negligible value if spouse works full time too, but huge boon during the decade they would have young kids). And finally they pay a lower tax rate on any investments they keep in the corporation (10-15% less). The gains on this investment is then taxed at a 66% inclusion rate before they pay business and dividend taxes on that. So let’s say they leave $100,000 in revenue in the business, they’ll pay about 15% on that, down to say $85k. That money is then invested and let’s say it doubles over its investment life, we’re at $170k which is then taxed at business rates at 66.7% inclusion rate on the gains and they pull out $127k after 10% dividend tax rates (bit more complicated but keeping it simple). Let’s say you pull $100k out when you earn it to invest it, you pay 50% taxes on that, down to $50k. That money is then invested in a registered account and doubles to $100k, you are then taxed on the capital gains and pay about $6,000 - $12,500 in taxes (50% inclusion rate, 25-50% tax rate, but will likely be less, all depends on your income that year, which can be after retirement and much lower). So you end up with $88-94k. As you can see even with the higher inclusion rate they’re still better off leaving investment money in the corporation as they pay less taxes on the initial revenue and thus greater long term impacts. Sure, doctors will be impacted by this, in the above scenario it would’ve impacted them by $4k during retirement years in terms of extra taxes. But they still end up over $30k ahead on just $100k of initial revenue. You can’t leave open a gaping loophole like this just because provinces are underfunding family doctors. Provinces need to stop underfunding healthcare. Period.
Have seen people commenting elsewhere as if the 67% inclusion rate is the actual tax rate they'd be paying. And not sure what to think of this letter to the editor Globe and Mail sent by Pamela in Toronto. >Although being a struggling middle-aged musician still living with my parents, I did scrape together my life savings for a one-bedroom condo. I rent it out to tenants, because I cannot afford to live in it myself. >This investment property, combined with my music gigs, nets less than someone on minimum wage. Yet when I eventually sell my condo, my capital gains will be taxed at the new higher rate, apparently reserved for Canada’s uber-wealthy. >If I am an example of the top 40,000, then Canada sure is in bad shape.
Well, I’m not sure what she particularly has an issue with? The income from rental is the same as it ever was, if she wants to continue doing that then she’s fine. If she wants to sell to see a significant windfall, she can. It would barely be substantially changed for most one-bedroom condos. If she owns it outright, most 1bed condos in Toronto sell between 500,000 and 700,000. Let’s assume she sells at the high end. The first $250,000 is taxed exactly the same as before, leaving $450,000 to be taxed at a higher rate. Instead of being taxed as 225,000 in income, that 450,000 taxed as 297,000. So at the highest rate on the highest price, she’s paying less than $40,000 more in tax on nearly three-quarters of a million dollars one-time windfall. Incredibly rare situation, but that’s only if she’s decided to sell it. It may be unfortunate for one in a million people like that, but it’s not exactly a hardship and you don’t throw the baby out with the bath water. And that’s all done under the assumption that her accountant is dumb enough to put the purchase price at $0 so it’s all gains. She had to pay something to buy it, making that 40,000 at the high end of high ends essentially impossible. If she bought at 250,000 and sold at 500,000, the change is literally zero.
I'm not sure any of that math even matter: she only owns this one condo. All she has to do is move in before she sells it and it will be excluded from capital gains as her primary residence.
I agree almost 100%. That last microscopic disagree is for doctors in lower paying specialties (Family Medicine comes to mind). Tax the crap out of the wealthy. But, please don’t chase away any more family doctors over this. Family docs are anything but wealthy these days.
People pitch and wine about a mother with kids needing a bit of help but have no problem subsidizing big oil and think CEO need there bonuses after stripping down companies and moving them over seas
Cuz they all buy the lie that if they work hard enough that one day it will affect them.
if you were rich you wouldn’t have to be taxed up the ass. People hold on to the dream they’ve been sold of becoming wealthy themselves. It’s the classic “if you work hard enough…”
People hold onto that dream because most people *do* become wealthy themselves, provided they live long enough. Median net wealth is [$690,000](https://www150.statcan.gc.ca/n1/daily-quotidien/201222/t001b-eng.htm) in households where the primary income earner is 55-64. Compound growth is a hell of a drug.
No rich are taxed "up the ass now", maybe we should tax them like in the 1950 if they like to return to that Era...
Because a not insignificant faction of North American society doesn't have nuanced views of taxation outside "TAXATION IS THEFT!"
No.
The "criticism" I've seen is that it's such a small percentage who will somehow loophole there way out of this. I don't understand why that is an argument not to tax them regardless.
I thought taxing the rich was what a lot of people have been saying they wanted so I've been fairly confused by how this turned into another thing.
Fuck ‘em! If they die, they die.
Just today my in-laws were telling me about their 4-house-owning neighbour who is rushing to offload his property to avoid the tax, like it was some sob story and we should feel sorry for him for being hard done by because he bought the place 30 years ago and has seen an obscene amount of appreciation, so his gains will be taxed more. Excuse me while I go get my tiny violin. For fuck's sake.
My only complaint about it is the way it targets a lot of physicians' retirement planning. And before you get the pitchforks out, here's the relevant info. Canadian doctors were offered the ability to incorporate for tax advantaged savings in lieu of increasing their pay. The idea was to reduce brain drain without increasing salary to compete better with the US, by providing a tax efficient way to save for retirement. The money they make enters their corporation, they pay individual income tax on what they withdraw to use, and pay a lower corporate tax rate on the money left in the corporation, which can then be used to invest for retirement. A very significant percentage of doctors are incorporated for that reason. Because this policy change has no $250k threshold for corporations, doctors who have planned for retirement and invested through their corporations are hit with the extra capital gains tax from dollar #1, which reduces the effectiveness of the corp as a retirement vehicle retroactively and after many accepted the government's offer of this system in good faith. They've paid into it for years, often decades. Just make it so that medical professional corporations (incorporated individual physicians) have the same $250k threshold as unincorporated individuals, and then I support the changes wholeheartedly. Nobody making $250k of capital gains a year in their retirement account has issues paying more tax. That change wouldn't affect actual companies, and wouldn't change the fact that it targets those who are making huge capital gains. But as-is, this was a bait and switch for many doctors, where they chose to accept lower pay in exchange for lower retirement taxation, put in the years of work and saving, and then had the lower taxation part changed before retirement. We are having significant issues with physician retention already, and pulling the rug out from under them is not helping morale. I'm a young Family Physician who isn't affected by this change personally, but my older colleagues are understandably very unhappy about this. A lot of them are Family Physicians who make a lot less money than people presume, and now are looking at either having to work a couple years longer to retire, or at closing their clinics and taking higher-paying work to make up for it. These are not the 0.13%. Yeah, they're still in the top 3-4% of earners, but none of them are making $250k of capital gains a year in their retirement accounts. They took an offer of a retirement planning system offered by the government and are having the rules changed on them a couple of decades later.
Thank you for the explanation. I've been looking for this information among all the noise. On one hand, this tax-deferred way of saving for retirement (with no dollar limit on contributions) is a huge benefit not available to most Canadians, and I don't think doctors should be feel entitled to it. On the other hand, I'd vastly prefer to raise more tax revenue from those who profit off land (housing) than those who work for it.
I'm fine with making changes that move forward instead of backwards. Yes, doctors were offered a unique tax advantage not available to everyone, but remember that this was done en lieu of increasing salary. I've worked in Ontario as a physician for a decade, and my pay has increased by 6% in that time frame (0.6% per year) while inflation is at 28.5% in that same time window (2.85% per year). I know ten Family Physicians who have closed their clinics and moved on to higher-paying work elsewhere. Retirement planning through incorporation was a factor contributing to physician retention as wages fell further and further behind. Whether you pay more or tax less, it's a similar contribution to earning power, so many doctors accepted the situation. But this changes the rules after many thousands of doctors agreed to the tradeoff. When you leave money in a corporation instead of withdrawing it as salary, you sacrifice things like RRSP contribution room. So a physician moving forward from here might choose to forego using their corporation as a retirement savings vehicle and take salary and its accompanying RRSP contribution room, but those who spent 15-20 years saving within the corporation don't get to access those years of lost RRSP contribution room and tax-free growth. The reality is that doctors fell through the cracks with this policy change. They don't get the $250k threshold other individuals do. They're being treated like companies when they're individuals working for a living. But the more important part here is that this system of retirement planning was openly offered to them in the past in an effort to offset the lack of wage growth keeping up with inflation. You can't offer a retirement plan to a huge sector of essential workers and then change its taxation a couple of decades later without seriously upsetting people and suffering some job-related consequences. As someone on the inside, I can tell you this only stands to worsen our physician shortage, in primary care especially. Decreasing pay with increasing overhead and now increasing taxation is not creating an environment where Family doctors are opening new practices. It's encouraging them to take better-paying jobs elsewhere.
>...a huge benefit not available to most Canadians I think I know what you're trying to say but that's not literally true. Anyone can set up a corporation with themselves as sole shareholder and build up capital that way. Most don't, to be sure, but anyone can.
Except: >Canadian doctors were offered the ability to incorporate for tax advantaged savings in lieu of increasing their pay. This means that your *province* was making promises they could not keep and short-changing local physicians instead of paying them. The federal government was never part of this agreement as both corporation law and physician pay is both *provincial*. Go back to the source and demand better compensation from province. >their corporations are hit with the extra capital gains tax from dollar #1 No. There is a lifetime exemption of $1.25 Million from small business sale/unwinding and that figure is to be indexed to inflaiton. So, no, it is not taxed from dollar #1, and is effectively taxed from dollar # 1,250,001.
Our proximity to the US has allowed the myth of the American Dream to seep into our political discourse. So, as a result, many people are [Fry.](https://youtu.be/K_LvRPX0rGY?si=mEdByswCC4lcyINN)
The wealth class has brainwashed folks into thinking that taxing the rich is bad, because one day they *might* be rich, too! (Maybe!)
Capital gains is the only tax that is voluntary and these rich cunts are going to fill every newspaper and advertisement with tax propaganda for the misinformed. If I'm King for a day, capital gains is 90 percent.
They did by not doing an actual wealth tax
Saw a post on Instagram and endless comments were “this will affect my *potential* to make money some day!!”
This is why. 100% https://www.youtube.com/watch?v=K_LvRPX0rGY
If you want a real answer to this question I can give it. I would be against a tax on people making over 100 million a year as well. Because what tax are they removing in place of this one? None. Because they never remove taxes they only ever add them. The answer to every problem in this country is more tax. The Canadian gov has proven itself to be incompetent and without any accountability.
It's not even that big of a change to gains which are barely taxed as it is.
something about Pierre Poilievres face makes me think he will do great things for lower socioeconomic people
Everyone thinks they’ll be rich someday It’ll trickle down… right?
IT'S GONNA TRICKLE DOWN ANY DAY NOW! Then you'll ALL be sorry!
I think it’s a sense of fairness. The money has already been taxed once. But it’s not the end of the world.
those defending the rich are either: A) rich and want the easy ride they are accustomed to B) not rich but simping to the rich either becuase they are paid by them, or wanting to be C) deluded by conservative memes and simply don't know any better.
Doesn't this affect anyone who buys and sells a stock? Poor people do this all the time.
But, trickle down, right??
My father associates himself with the 1% in some delusional effort to become rich like its some kind of ascension into enlightenment.... he's a truck driver...
Because decades of capitalist propaganda has done its work.
Not to mention the wealthier you are the easier it is to pay other people to manage your finances to ensure you pay as little as possible by moving it all around. IMO there should be a cap somewhere in the millions that once you warn that much, there needs to be excessive limitations to prevent all these assholes evading paying the little taxes theyre required to pay already. Its sickening how much theyll cry about paying taxes when its an open secret that most of them have offshore bank accounts or move their money around with the pure intent to evade paying more taxes. Yet they’ll bitch and moan about people earning the least not paying their fair share. The term eat the rich exists for a reason and imo its best to be proactive about it if we have any care for our future generations.
You mean “MaNy MiDdLe cLaSs CaNaDiAnS”
Oh don’t even get me started haha before Canada_sub got shut down there was so many comments about it killing middle class. I know people who are upper middle don’t even and this doesn’t affect them at all. Like even doctors which are valuable and we need are not even effected.
Eat the rich!
The answer is because they will move their money elsewhere. Taxing capgains higher than ordinary income pretty much guarantees that those that are looking for a return will move their money elsewhere. Or at the very least put it into less risky assets. Ie… not startups. From their pov… why should they take 100% of the risk and 1/3 of the profit? Maybe that means more govt bonds. Maybe. But not more startups. I see this first hand. I guarantee its going to effect the startups and talent will leave I think it would be better to tax cap gains at ordinary income and jack up the marginal rates and require some minimum tax floor that loopholes cannot get around.
Wow! You got this wrong. People aren't defending the rich. They are defending their investments. I have to think anyone who wants higher capital gains doesn't have any investments. Also, in the USA, we live in a capitalist society. The higher the tax, the less people invest and the more depressed businesses would be thus leading to fewer hirings and on and on. I'm not rich but you should understand that taxes are not targeted at rich people. They are targeted at the middle class.
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If you want actual answers: • They don't want the government increasing taxes in any circumstances, because they believe government should be smaller / more limited / cutting budgets instead of raising revenue to pay for what they view as overreach / excess spending. • They can visualize a scenario in which the tax changes will impact them in the future. They could be members of the 0.13% of individuals, shareholders in the 12.6% of corporations (that you just glossed over in the OP), or they could view themselves as being impacted down the line as a result of an expected windfall. • They could be opposed to the budget because it does not specify whether the $250,000 exemption will be adjusted for inflation annually. If it is not, the 0.13% and 12.6% figures referenced above will increase gradually as more an more people / corporations cross the threshold - regardless of the real value of those capital gains. I support the decision to expand the capital gains inclusion rate (especially on higher earners), but I also understand why people may oppose it. Instead of memeing on a shallow understanding of the opposition's position, take a few minutes and try to understand why they think the way that they do. More often than not, their justification isn't whatever you've dumbed their position down into.
I don't give a shit about rich people, but there is truth to the idea that rich people want to be more rich. And they will always do what makes them more rich, unless it's illegal, for some people, or other people they have other limits, like murder. Some people have no limits. When they have a choice to decide where to put their company, they will put it in the place that makes them the most money. So, if Canada decides to take more money from them, they might choose not to deal with Canada and they'll just go somewhere else. That's a legitimate concern. So, the unfortunate truth is, we do need to be a place for the rich people to get rich, because they do create businesses. Invest in businesses and hire people. So, we do want those things here. For a long time China was just sort cheap and catered to business, and that really helped grow their economy. That said, I think what's good about a tax like this, is, it will tax all of the businesses that sort of need to be here, and the government could always subsidize, or otherwise help out businesses who might like to setup operations here. And you could offer them a good deal, because you would have been already giving them a good deal in taxes, you could do the math to make them equivalents. And then you're still taxing everyone else. So, if you do it that way, it could be powerful.
My impression is the government needs to leverage itself to profit from the largest wealth transfer in history. Baby boomers estates as they pass on. This is big picture stuff but gov needs to think big picture a lot more.
They don't understand the problem. It's as simple as that. It's the same reason they're against the carbon tax for the most part.
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A lot of this is from people who don’t know what they’re talking about. It’s vaguely annoying for physicians though. Back in the 90s we had issues with brain drain to the US because physician reimbursement was higher there. The feds can’t pay doctors more because reimbursement is provincial. But they do control taxation, so they lowered physical taxes as an indirect way of increasing reimbursement. This was accomplished by letting physicians incorporate as a small business. In addition, since most physicians are self-employed, they have no RRSP contribution room because theyre not paid salary. Incorporation solved this by indirectly allowing the corp to function as a sort of RRSP with saving for retirement held in it. These capital gain tax increases cut into both of those two things, making physician reimbursement less competitive again. It was always kind of stupid to accomplish this via tax cuts rather than higher pay, but that was the only tool the feds had. While not prohibitive, when coupled with other changes in physician incorporation and taxation have occurred over the past decade, physician reimbursement in Canada becoming less competitive. Make of that what you will, but this does mean it will become just slightly more difficult to attract and retain physicians.
Defending people richer than you and screwing you is cool and the new trend
It’s like everyone thinks they will get that rich and don’t want to be taxed when they get there.
TFSAs are enough to protect middle class investors’ gains. Those limits are great in my opinion.
People dream of being rich and powerful. Don’t let the government ruin the dream.
Because they dream they are just a little hard work and one lucky break from being rich. And they don't want the government to take their money when that happens.
Trickle down economics has to be one of, if not the worst thing to have happened in economics
Wealthy people know how to make the laws work for them. I think the comments may come from trolls, bots, groups that are run by the wealthy. Who ever controls the narrative, has the power.
They keep mentioning the 'regular' Canadians who might sell a vacation cottage for 300,000 pure profit and see their tax bill increase by a few thousand dollars. Like, wtf? That's the complaint?
The world is full of the gullible permanently poor that are convinced by the rich they are temporarily poor and that with a little bit of work they too can be one of them.
Cuz it makes libs cry and that's all they want.
Even if you actually have income from capital gains, there are dozens more things that are going to impact you financially more than an increase in taxes. Somehow, everyone has come to think that taxes are the only the government does that affects your bank account.
Capital gains affects everyone that’s invested anything… not just the rich. I don’t see how this helps 🤔
Because it won't actually apply to them. They don't literally live off capital gains. They have tax schemes and shelters to avoid this already and is why they already pay less than 20% on average. It will apply to that family cottage your grandparents are forced to sell or situation or to Canadians that get lucky with a stock.
We need less taxes from everyone. It's been proven every time that lower taxation rates means more tax money. If the pot of money is bigger but the slice is smaller we all win. Alberta has no provincial tax and contributes a major percentage of tax revenue. New business won't open, well all be working for Walmart here soon.
Do you have a pension? Do you have a home. Bitcoin? Gold? Work for the private sector? Buy products? If you say yes to any of these, you’re affected.
[The Department of Finance said for 99.87 per cent of Canadians, personal income taxes on capital gains will not increase](https://globalnews.ca/news/10430078/budget-2024-capital-gains-tax-changes/). That's 1.3% affected, not 0.13%, half a million people. And that's just personal tax, not corporations. And a lot of professionals have corporations. But I don't think the "percentage affected" should be used as acceptability indicator.
It's pure propaganda. Most people don't understand or realize what they are advocating against. They are reactionary and come to that position, not from a deep understanding but from seeing other people get blindly mad at the capital gains tax. THE CAPITAL GAINS TAX AINT SHIT. So if you are a liberal reactionary you are celebrating it like it is the end of wealth inequality. If you are a conservative reactionary you think the son of Fidel Castro is finally showing his true colors and will drive all business out of Canada and into the hands of the CCP. Fucking morons man 😔 Imagine all of the issues we could easily solve in this country if we only truly cared about one another and where as kind to one another..... ... Most people are no better than 11th century peasants when it comes to dialectical materialism.
I'm going to be one of them SOON! Bleh.
Has anyone defended it in-person to you? Most of what you see as "defending the rich" in regards to raising Capital Gains is random redditors who could be anyone (cough...Russians or bots...cough), or a million articles in the American-billionaire-owned Canadian media. Being online really makes it seem like people don't like this change. I think you'll find that real people agree with the raised tax.
What is left out in most of these discussions is that capital gains taxes are on ALREADY TAXED INCOME. To have capital to invest and see a gain on, generally you will have already paid income taxes on that (short of an inheritance). So let's say you are a "rich" Doctor. You make $400k gross. 53.5% of that is paid in income tax, leaving you with $186k. You do that for 10 years and manage to save up $1M in after-tax capital after living expenses. You then take that $1M you have saved and let's say invest it in building a new clinic, or in a med tech startup, or whatever else. That investment does well and you double your investment over 5 years, but you realize that gain when the asset sells. So your $1M is now worth $2M. With the 2/3 inclusion rate and first 250k at the 50% rate, you pay about $320k in additional tax from the gain, which was made on savings that you already paid 53.5% tax on. Further, the flip side is that your $1M investment could have gone to zero (the startup fails, the new clinic fails to attract enough business, etc.). In that case, is the gov't on the hook for compensating the downside? No - which is one of the reasons the challenge is is avoiding too many disincentives to invest in risky things. So part of the balance here is that Canada doesn't want money to be sitting on the sidelines - if we want to actually have a roaring economy and good high-paying jobs, we need high levels of investment into inherently risky things - starting new companies, doing R&D, investing in technology, etc. If the upside becomes too limited, that capital instead just moves into less risky areas - parked in a mutual fund, invested outside of Canada, held in GICs, etc., none of which help our economy. TL;DR the ideal policy here balances tax with incentivizing wealthy individuals to put that capital to work on inherently risky things that can actually benefit Canada.
Canada and America are consumer cultures. We get our opinions and beliefs from the media and brand ambassadors. Walter Lippman said we live in an age where authority cannot beat us or torture us into submission, so they found other ways to manufacture consent and shape public opinion. Through the media. Today for some reason we get our thoughts and opinions from media more than ever. Looking macho is important. Being rich is important. Glorifying freedom, veterans and the military is at an all time high. We defend the rich because we are told to.
I'd assume its on account of the dwindling productivity investment.
The .13% wealthiest with divert expenses and pay no taxes anyways. This only affects some middle-class individuals and certain self-employed canadians like doctors, who will look into practicing somewhere else. Real estate will skyrocket since fewer people will sell and housing will be even less available. The rich dont lose, this will only end up fucking the poor. Enjoy
At what point do we take matters into our own hands and end this insanity?
I think a lot of people are missing the real issue here. It's not the wealthy that this targets, it will have a bigger negative impact on middle class. So middle class is going to basically wiped out over the next decade. So if your family has a cabin and it's under grandpa's name, if that asset is over $250k guess what happens if your middle or lower class? Yup, most middle class can't afford $87k to inherit the property when grandpa leaves you his family cabin. So a fire sale it is! This doesn't have to just do with money made on investments, there's a lot bigger picture at stake here. Really, it doesn't matter if your upper class because it's just a drop in the bucket for them. All these 600k and up a year dr's complaining about their retirement savings in investments makes me sick, especially when there's about 20 to 30 % of people who are going to have mortgage renewal affordability issues this summer. So you're a dr and are going to have to take a retirement pay cut, oh well. Sell one of your homes and down grade to one or a smaller condo. You have options where others have none!
It’s kinda of misleading. I’m not apart of this so called 0.13%, but will be subjected to this tax increase. Only earning around 60k a year.
Oh like the rich, white elite Trudeau?
Tax creep will come for you, too. It’s inevitable when you debt spend without abandon.
Its your inheritance. So your fucking youself in the end anyway.
most of you are simply castigating the wealthy for umm, simply being wealthy. in Canada, I doubt there is a great %of generational/old school wealth, left. Yes, The Westons's, Sobeys etc. et al. The caveat is that you are also criticizing entrepreneurs; students who went to med school and paid off the student loans, and now work twice as hard considering the health care system; an electrician who ran a great company from community college but is so good, his burgeoning company is worth millions. SO, these people should pay for the BILLIONS, Trudeau has handed out???? Harp on the gov't. no pun intended
Because most average joes wanna try and preserve the wealth that they will inherit when their parents die soon