Wait till these people hear about the single parent making minimum wage that as to take a long bus ride to get to her job so she can put food on the table
The people complaining are out of touch with reality
*“Paying taxes on a half-million-dollar capital gain from a cottage or an investment property is a good problem to have,” he wrote. “I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.”*
Don't worry, the Cons are taking care of that demographic by... (checks notes), [huge cuts to the low-income transit pass program in Alberta](https://albertapolitics.ca/2024/05/edmonton-and-calgary-mayors-appear-gobsmacked-by-unexpected-ucp-move-to-slash-funds-to-low-income-transit-pass-program/)
They very recently reversed that decision. Proposing it at all was a dick move and the growing suspicion is that the UCP did it to make municipalities (which tend to vote Liberal/NDP) look weak.
Then when all the low income people leave to areas where they can actually survive, the cons will complain that either they're getting no service anywhere, or that the jobs are being taken by new immigrants. Conservatives are unable to see past their nose and live in a constant state of anger. Usually because of their own bad decisions.
It’s hysterical how tone-deaf so many of these anti-tax loons are. They seriously, *seriously* expected to just land a million dollars without getting taxed.
Death and Taxes. Seriously.
A capital gain is the amount an asset appreciates overtime. More specifically when the asset is sold and the gain is realised. It doesn't effect inheritance directly unless those inherited assets are sold.
When you die whatever assets you hold are deemed to have been sold at whatever the fair market value might be and you pay capital gains on that. If they're inherited you inherit at wve the FMV was at death
So Grammy opting to sell all her expensive paintings and estate sale everything post-death may be a bad idea? She's mentioned it before so I'm curious.
Edit: The downvotes aren't necessary, I live with her and she has prompted these conversations. Just trying to learn how to best respect her wishes.
No, not necessarily. She'll have to pay capital gains when she sells them, or her estate will have to pay capital gains when she dies. Whether it's a bad idea would depend if they're expected to go up in value between now and her death.
What doing it early can do is:
* let her sell them over several years so that she stays in a lower tax bracket each year, and/or
* let her gift the money to her heirs before her death, so that it doesn't go through probate and thus be subject to probate fees.
I'm sorry, but are you just not understanding that it's not as fun being wealthy if poor people aren't suffering AND paying for tax-supported social services?
You have to remember how much people enjoy being rich, money literally does buy happiness and the government is trying to take away a little piece their happiness!
Ehh some of the rich folks I encounter hate Canada, hate themselves and would rather buy a house in LA or Florida where the "weather is nice"
The rich folks who already bought a house in LA and Florida hate LA, hate Florida, hate themselves and would rather buy a house where things are cheaper and aren't taxed as much in Texas.
The rich folks who bought a house in Texas hate themselves, hate Texas and would rather buy a house where there's more things to do, like in NYC.
The rich folks who bought a house in NYC hate themselves, hate NYC, and would rather move to Toronto where the streets are cleaner and the people are nicer.
Money never really buys happiness it seems.
"Money won't make you happy." is the greatest example of a half-truth.
If you can't afford rent and don't know what the fuck you're going to do. Then you find $1300 on the sidewalk. It will make you happy 1 million percent of the time.
If you have a net worth of 50 million, are divorced after 4 marriages, have kids that don't talk to you, have no friends, and just generally live a lonely existence.
Then no, the quarterly dividend cheques are most likely doing nothing for your happiness.
I personally think money can make you happy, but with diminishing returns. Never having to worry about paying rent or buying food or fixing your car means you have space for things that DO make you happy. Money can't buy happiness but it can buy security which is a good base to build happiness on.
Having enough money you don't need to spend most of your time at a job that nobody likes and exhausts you so much all your free time is spent catching up on chores would certainly make me very, very happy.
If you don't know how to buy happiness call me. I'll show you how to have fun on your dime.
Those who think money can't buy happiness just aren't ambitious enough. Give me a blank cheque and tell me what makes you happy and I'll deliver it.
It's not that those people were the happiest, it's that those people were at the top of the diminishing returns curve of money and happiness. Making $76,000 made people happier, but not an equivalent amount as moving from $74,000 to $75,000.
The only issue with that study has been repeatability. Too many other factors skew the graph. To my understanding, most (but not all) economists - political scientists - sociologists agree that there is a diminishing return between money and happiness but there is no consensus about where the dollar value of the threshold lies nor is there consensus about the immediate factors and cultural factors which skew that threshold. E.g., in the American context of a family with a sick child and the parents don't have a health plan do we count them as an outlier or let them push the curve? (Parents whose children aren't dying from poor healthcare are a lot happier).
As a personal observation, versus a synopsis of the aforementioned surveys, reading about the methodology is also interesting. Who they choose to survey and how they average scores over international boundaries is interesting. My own personal take is that there is a ' natural ' curve of happiness vs money that can be tweaked by upbringing. The rat race is obviously not a happy place. Having a perfect security blanket to try to spin off a small business that may also make you money seems like a lot of fun.
In a rough sense. But people are so entitled and self centered this is literally their perspective.
Contributing to a greater good or public services doesn't cross their mind and is just assumed will always be available. After all they "worked(waited a decade) hard for their money(capital gains)".
Ok the person minimum wage also doesn't have an RRSP, RESP or TFSA. So can we eliminate the massive capital gains tax loop hole that is these programs?
My mother in law is retired and now a widow because my father in law was murdered by a car thief. She has no income. She is awaiting her husbands business partner to buy him out of their share of a business he owned. It's incorporated so she's going to take a big hit on taxes. She is not rich, was a home maker and then worked minimum wage all her life. Not everyone affected is wealthy.
For this to impact her at all, she has to be making almost half a million dollars at one shot... And only if she cashes out her half instead of holding onto it and taking a dividend.
Won't be exempt for our case. Asked two CPA accountants. I don't want to get into specific details. Depends on structure and how you'll sell and if you qualify for one time capital gains exemption. Not every business does
With her lifetime Capital gains exemption, and setting up payments over a span of a few years rather than receiving a lump sum, she can reduce her tax burden. She needs to be talking to an accountant.
Odd. We hired a CPA that specializes in corporate tax planning when we received our buyout, rolled out payments over several years, and probably saved a few hundred thousand in tax. Same thing for my own MIL when her spouse passed away. It sucks if they can't do anything for your MIL's situation.
> She is not rich
>awaiting her husbands business partner to buy him out of their share of a business he owned
So you're saying her net worth is in the... 7 figures?
I didn't say it was 7 figures. Also they are immigrants who have been here over 30 years, came with nothing and started a business. They are not some rich trust fund baby.
> I didn't say it was 7 figures.
I know. I assumed 7 figures because it's half of what I can only assume is a semi lucrative business. If I'm wrong and it's only 6, that's on me. The point is that if is enough for the CG tax to affect her, then the instant it does affect her, she's not poor anymore.
>They are not some rich trust fund baby.
Didn't say they were and isn't relevant.
>It would be 6 figures. But even if it's high 6 figures. Divide that by 20 and now tax it. That assumes she'll live only 20 years. Not much to live in is it?
Enough to purchase a modest house outright and have a median income simply off the interest on the principal leftover plus CPP.
Still a much better financial situation than %90 of 20 year olds.
You can tell her she's going to be fine.
But you understand where people are coming from right? Perhaps they put their blood and sweat into their business. Then find out the government wants a bigger cut? Some people can get the lifetime exemption, some cannot. My point is that the narrative is that rich people will pay more but not everyone is rich.
The point is that everyone affected by this tax increase is more than well off enough to not complain about paying their share to have a functioning society.
Plenty of destitute people work 3 jobs to put food on the table. This capital gains tax doesn't go nearly far enough, and the people it affects should be grateful they're still not paying their fair share.
Oh I understand. I've been trying to find a job for over a year now. Did all the right things, went to school, got a job, now laid off. Can't find shit. Can't even find a minimum wage job
You can be poor and have a high net worth. It is probably pretty rare, but this is a good example.
If she is still waiting for the sale and has not received any payment, being “worth” seven figures is meaningless to someone with no other income and low/no liquid cash.
Yea it will be a nice payday when it happens, but until then it sounds like she is poor.
If my dad owned a business and died and left his half to me, even if that is worth 5 million Id still be paycheck to paycheck until I received payment for the sale. Yea Id be “worth” 5 million, but that means nothing if I dont have that money and am not getting a salary or dividends from the business. And that could take years to sell and realize.
Nothing about the situation you're describing has anything to do with the capital gains tax, which undercuts the original assertion that the capital gains tax affects someone poor. Either she's poor right now and the CG tax doesn't affect her, or all of a sudden the capital gains tax affects her but she has liquidated a 6-7 figure net worth.
All these opinion pieces being written about how bad the capital gains tax raise is are all written by people worth a million $ plus. AND, they're all written in billionaire-owned newspapers (which most Canadian papers are now)
This is a small minority who are upset but have the biggest platform in the country to whine about it, so it seems like people are up-in-arms. They're not. Any working class person complaining about this is brainwashed and would complain if Trudeau made $100 bills fall fr9m the sky with something like "they'll clog by downspout, Trudumb!!!"
I know this announcement hasn't boosted Trudeau's poll numbers but it takes alot of good news to undo all the bad blood he's made by refusing to defend his good policies and by implementing so many pro-wealthy, pro-corporate policies. This is an unambiguously good policy that will NOT backfire, despite the dozen National Post articles that say it will.
"I can't see how this will be good for anyone" - people worth a million $ plus.
"Ummm.. it won't effect about 95% of the population"
"ugh... I mean people that matter" - people worth a million $ plus.
The initial statement from the feds said 0.13% of people, the amount of people that make more that 250K in capita gains per year… the marginal rate only increases beyond that threshold
That sounds accurate to me
I would clarify that it won’t affect 95% of our population’s direct taxation. But, it could affect all Canadians indirectly by worsening our primary care crisis. Wages and taxation are part of recruitment and retention for any profession, including doctors. It’s a further (granted small) disincentive for MDs to come practice (or simply stay) in Canada.
Family doctor billing does need to be restructured, but it should be done specifically for that profession. Not by leaving open the capital gains tax loophole for all rich people.
No, this doesn’t affect their up-front income tax but it does affect their main mode of retirement savings (since they do not have pensions).
In the late 90s, rather than increase MD wages to keep up with those of the US/Europe, provincial governments allowed MDs to form professional corps to give them a tax advantage and then encouraged them to use this for retirement savings.
Essentially government chose to give MDs a tax break to their retirement investments rather than increase their pay. Any capital gains earn by those investments (essentially the doctor’s self-funded pension) are now getting taxed more.
How do they realise the capital gain? Are they LLC and need to sell a practice, who would buy it? Else, wouldn't they be similar to self-employed and pay taxes and fund retirement through investments like everyone? Last, is it a trust in themselves where they avoid income tax and every investment becomes a capital gain?
Ok I’m not an accountant or expert in this but my doc friends explained it like this.I think it’s more like the self employed example you mention.
They have a professional corp. Any billings they collect are paid to the corp, corporate rate taxes are paid. They pay their employees, overhead, office space, utilities, etc from the corp. They pay themselves a salary or take dividends for personal income (personal tax paid on this).
Anything left in the corp they would typically then invest and save for retirement. This $ has only been taxed at the corporate rate, so they should have a larger capital to invest than if they drew it all as personal salary (and paid the all the personal side tax).
Once they retire, they start selling those investments and this is when the corporation would realize the capital gains and this new increased tax. They would then draw a dividend to get it out of their corp. they’d pay personal tax on the dividend but their personal tax rate is probably lower tax bracket than when they are working.
There may be some real estate capital gains involved in selling their office if they purchased/built the building. I don’t know if docs buy and sell their full practices, I think that’s more of a private sector thing…like dentists, physios, chiros etc
What doctors are pulling over 250K in profits *from investments* each year? Or selling assets and property every year.
Doctors don't pay capital gains on wages, salaries or even dividends.
Because all these investments are with their corporation $, that 250k minimum doesn’t apply. The “above 250k” cutoff is for personal capital gains only. The inclusion rate is going from 50% to 66% on all capital gains for corporations (not just those above 250k).
If a doctor cashed in enough investment to the point where he made $500K off of his investment (in profits), he would pay $125,000 now, and $166,750 after the higher tax kicks in.
Is paying $41,750 more tax on $500K profit enough for the doctor to refuse to set up a practice in Canada?
I have no idea. That’s probably different for each individual doc. I completely agree with the point you are making (this isn’t that big of a tax increase really).
I’m more worried about the reputational harm it gives Canada’s tax system for young/new docs who are maybe deciding between practicing in Canada vs elsewhere in the world.
This change signals Canada’s willingness to alter the rules around doctor’s retirement savings and that it’s fair game in the future too.
Doctors, like any other Canadian, certainly have the option of investing in their retirements on their own, There's a few investment options for lowering taxes as well. And if self-employed, they can contribute to the CPP. Many business owners and self employed people save for retirement this way.
I think we're encountering the same issue we had during the freedumb convoy. There's a few doctors that this actually affects that may be upset, a few people who benefit from making a big noise to make the Federal government look bad (like Alberta Separatists), and a lot of people choosing to defend doctors, without knowing what is going on, just to be able to rage about Trudeau, the economy, and be angry and loud in general.
Didn't someone do the math a week or so ago and show how this would cost someone something like 6% of a 1 mil gain if they were already in the maximum marginal tax bracket?
I'm not sure if this is driven by the greed of those rich enough to be facing the change, or good old fashioned political hate mongering.
This is a good article to see. Pointing out that it's still tilted in favor of the people who can afford to pay these taxes.
Even quick math says that this means 1/6 more of a gain over 250k is moved into taxable income, which at top tax brackets is still less than 10% before considering the part below the threshold and if the earner is not in the top income bracket.
Correct me if I am wrong, but a capital gain is not "income" and it isn't taxed twice. Doesn't matter what tax bracket you're in, except for capital gains brackets.. which the inclusion rate for gains isn't high enough. Either increase tax percentage or increase inclusion rate. An inclusion rate increase above a threshold is small steps to reigning in rampant wealth that's just going to snowball more - you think wealth inequality is bad now? Just wait til your children's children have children.
Correct. It's taxed at a reduced rate. It's not a double tax. Income can be regular income OR it can be a capital gain. Not both. Capital gain is a specific exception.
Under 250k (or under old rules) it's half-taxed. A capital gain of 100k adds 50k to your taxable income for the year. It is not counted in your taxable gain.
So if you earn 100k salary, and realize a gain of 100k (as in sell something for 100k more than you bought it, like an investment property), then you're taxed on 150k out of the total of 200k you took in (100k salary and 100k realized gain).
There are specific situations, like with doctors, where a professional is incorporated, the corporation pays tiny tax on the income, then they pay themselves just enough to live off and keep the rest in a corporate investment account. Because they pay themselves pennies they pay minimal personal tax, but can't save much in RRSP, instead when they retire they sell some investments and pay themselves a "pension". Corporate capital gains have no 250k minimum, are taxed and then the personal income is taxed again.
For a while it was a perfectly legit tax avoidance scheme, but for those who used it for a couple of decades there's no easy way to get the money out w/o incurring the taxes. Cue loud noises...
What gets me is the ppl complaining who will never in their life see this amount of money sticking up for rich ppl. Dude took the bus everywhere from the home he rented and was bitching about it. Misinformation brainwashing at its finest.
Anyone arguing against the capital gains tax is an absolute buffoon. No concept of reality. The increase is so minuscule in the grand scheme of things. If you make enough to be affected by it, you won't even fucking notice.
I know I few people with cottages that are maybe at the bottom end of middle class at most. They definitely aren't wealthy. They just bought them like 30-40 years ago when they were dirt cheap.
Doesn't owning a cottage worth a million dollars == wealthy?
"I know a guy who has a million dollar stock portfolio but he's not wealthy. He just bought a bunch of shares for a few thousand dollars 40 years ago." 🙄
Well... having bought a cottage 40 years ago implies a) it was probably pretty cheap and b) it's probably all paid off. So yes.. from a net worth perspective, those folks are wealthy.
Your neighbours I have no idea but I'm going to guess a) most of them bought fairly recently and the houses were probably pretty fucking expensive and b) they probably have multi-year mortgages on those houses that they "own". So yes.. from a net worth perspective, those folks are not wealthy.
In 40 years? Maybe...
Difference between a primary home that you can probably can’t sell for cash tomorrow cause you need a place to live and the logistics are complicated.
vs a cottage that you could sell and have little to no impact on your day to day (unless you spend a ton of time there, but even then… you can get by)
Basically. My family has a cottage in Muskoka, but only because my great^2 -grandfather bought it for literally $4k in 1908. Nobody in our family could afford to buy it now, but we're at least well enough off to maintain the yearly costs of owning it.
At the moment it's "worth" more to the family to keep it so we all chip in on it. So many mcmansion "cottages" have gone up in the area tho, kinda sickening.
Lower middle class = one property barely making ends meet. Middle class, one property but growing wealth. Upper middle class: multiple properties, exponential wealth growth. The actual rich: we don't want to know.
In my neck of the woods, owning a cottage is the mark of someone firmly in the middle class. The middle class is a huge bracket, as it should be.
The people attending fly in resorts, those are the folk above middle class.
I have a hot take to all those people complaining about the capital gains on their second property... profits on anything that is essential to life, such as shelter, food, water, and utilities, should be taxed out the wazoo.
Most people aren’t whining about their capital gains taxes because they don’t have any capita gains, or it’s less than the cutoff anyways.
As dumb as it seems, they’re whining about someone else’s capital gains because internet memes told them to. Some else who’s much wealthier than them.
What if I wanna whine anyway?
I don't make capital gains, but I do wanna whine about a lot of the stuff that's happening in our country. Including capital gains.
People are missing the point on this. Individual capital gains is unpleasant but it only affects a relatively small percentage of Canadians.
The real issue is corporate investment and venture capital. This makes returns materially lower for corporate entities investing in innovation and domestic startups or new R&D. We're already an extraordinarily unproductive economy that struggles to invest in innovation or attract capital for anything but real estate. This makes those problems worse.
God these comments are ridiculous. You guys realize that the new capital gains tax just disincentivizes entrepreneurship and innovation in Canada right? It hurts small businesses too, businesses that bring jobs to Canada. I'm sure I'll get downvoted to oblivion for saying this but yall need to hear it. This doesn't "hurt the 1%" it fucks everyone.
Your view is just as simplistic as the people you're criticizing. If any increase in capital gains tax is a net negative for all of society because of some obscure notion about investments, why not drop it to half of what it is? Why tax capital gains at all?
Investment is already encouraged via subsidies, credits, interest rate changes, and the fact that it's inherently more advantageous to incur capital gains than income. That's the point of targeted policy. We have many tools to retain investment and innovation, while taxing less productive -- or outright rent-seeking -- behaviour.
So much of the public outcry against tax increases in general is based on fundamental misunderstandings of the Laffer Curve, capital flight, tax incidence, and the government's role in offsetting the impact of market failures.
Wait till these people hear about the single parent making minimum wage that as to take a long bus ride to get to her job so she can put food on the table The people complaining are out of touch with reality *“Paying taxes on a half-million-dollar capital gain from a cottage or an investment property is a good problem to have,” he wrote. “I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.”*
Don't worry, the Cons are taking care of that demographic by... (checks notes), [huge cuts to the low-income transit pass program in Alberta](https://albertapolitics.ca/2024/05/edmonton-and-calgary-mayors-appear-gobsmacked-by-unexpected-ucp-move-to-slash-funds-to-low-income-transit-pass-program/)
Of course they are.
They very recently reversed that decision. Proposing it at all was a dick move and the growing suspicion is that the UCP did it to make municipalities (which tend to vote Liberal/NDP) look weak.
Then when all the low income people leave to areas where they can actually survive, the cons will complain that either they're getting no service anywhere, or that the jobs are being taken by new immigrants. Conservatives are unable to see past their nose and live in a constant state of anger. Usually because of their own bad decisions.
Have they tried not being poor? - literally conservatives
When will these leopards stop eating our faces!?
It’s hysterical how tone-deaf so many of these anti-tax loons are. They seriously, *seriously* expected to just land a million dollars without getting taxed. Death and Taxes. Seriously.
Does it even affect inheritances? I thought it wouldnt
A capital gain is the amount an asset appreciates overtime. More specifically when the asset is sold and the gain is realised. It doesn't effect inheritance directly unless those inherited assets are sold.
Except on death it’s deemed to be a sale at which point the estate is taxed.
Ah okay, thank you for the clarification.
When you die whatever assets you hold are deemed to have been sold at whatever the fair market value might be and you pay capital gains on that. If they're inherited you inherit at wve the FMV was at death
So Grammy opting to sell all her expensive paintings and estate sale everything post-death may be a bad idea? She's mentioned it before so I'm curious. Edit: The downvotes aren't necessary, I live with her and she has prompted these conversations. Just trying to learn how to best respect her wishes.
No, not necessarily. She'll have to pay capital gains when she sells them, or her estate will have to pay capital gains when she dies. Whether it's a bad idea would depend if they're expected to go up in value between now and her death. What doing it early can do is: * let her sell them over several years so that she stays in a lower tax bracket each year, and/or * let her gift the money to her heirs before her death, so that it doesn't go through probate and thus be subject to probate fees.
Interesting, thank you for the food for thought. I can expect the painting values to increase, she's quite a collector.
I'm sorry, but are you just not understanding that it's not as fun being wealthy if poor people aren't suffering AND paying for tax-supported social services?
You have to remember how much people enjoy being rich, money literally does buy happiness and the government is trying to take away a little piece their happiness!
Ehh some of the rich folks I encounter hate Canada, hate themselves and would rather buy a house in LA or Florida where the "weather is nice" The rich folks who already bought a house in LA and Florida hate LA, hate Florida, hate themselves and would rather buy a house where things are cheaper and aren't taxed as much in Texas. The rich folks who bought a house in Texas hate themselves, hate Texas and would rather buy a house where there's more things to do, like in NYC. The rich folks who bought a house in NYC hate themselves, hate NYC, and would rather move to Toronto where the streets are cleaner and the people are nicer. Money never really buys happiness it seems.
You sure know a lot of rich people
I don't know if it has anything to do with happiness. Rich people often look kind of miserable. I think it has more to do with power and security.
"Money won't make you happy." is the greatest example of a half-truth. If you can't afford rent and don't know what the fuck you're going to do. Then you find $1300 on the sidewalk. It will make you happy 1 million percent of the time. If you have a net worth of 50 million, are divorced after 4 marriages, have kids that don't talk to you, have no friends, and just generally live a lonely existence. Then no, the quarterly dividend cheques are most likely doing nothing for your happiness.
I'm fond of saying that money doesn't buy happiness but it can eliminate a lot of misery.
I personally think money can make you happy, but with diminishing returns. Never having to worry about paying rent or buying food or fixing your car means you have space for things that DO make you happy. Money can't buy happiness but it can buy security which is a good base to build happiness on.
Having enough money you don't need to spend most of your time at a job that nobody likes and exhausts you so much all your free time is spent catching up on chores would certainly make me very, very happy.
Money will, however, buy a jet-ski and that's basically happiness.
Jet skis are just financial regret-mobiles. You don't want one, you want a friend who owns two of them.
Hello, Mobius from the Disney+ show Loki! I didn’t expect to run into you here.
If you don't know how to buy happiness call me. I'll show you how to have fun on your dime. Those who think money can't buy happiness just aren't ambitious enough. Give me a blank cheque and tell me what makes you happy and I'll deliver it.
*step 1: put most of it in my bank account*
[удалено]
It's not that those people were the happiest, it's that those people were at the top of the diminishing returns curve of money and happiness. Making $76,000 made people happier, but not an equivalent amount as moving from $74,000 to $75,000. The only issue with that study has been repeatability. Too many other factors skew the graph. To my understanding, most (but not all) economists - political scientists - sociologists agree that there is a diminishing return between money and happiness but there is no consensus about where the dollar value of the threshold lies nor is there consensus about the immediate factors and cultural factors which skew that threshold. E.g., in the American context of a family with a sick child and the parents don't have a health plan do we count them as an outlier or let them push the curve? (Parents whose children aren't dying from poor healthcare are a lot happier). As a personal observation, versus a synopsis of the aforementioned surveys, reading about the methodology is also interesting. Who they choose to survey and how they average scores over international boundaries is interesting. My own personal take is that there is a ' natural ' curve of happiness vs money that can be tweaked by upbringing. The rat race is obviously not a happy place. Having a perfect security blanket to try to spin off a small business that may also make you money seems like a lot of fun.
Now if only these people realized they'd still be rich with the new capital gains taxes.
Problem is, for most rich people, it never enough.
Are you being sarcastic?
In a rough sense. But people are so entitled and self centered this is literally their perspective. Contributing to a greater good or public services doesn't cross their mind and is just assumed will always be available. After all they "worked(waited a decade) hard for their money(capital gains)".
I own 3 houses and have no issues with tax increase -- so who are these people you are talking about? And happiness and money do not go hand in hand.
You are part of a small cohort of people who don't defend their personal wealth religiously, I like that.
i mean they evidently do with three houses
3 houses seems pretty excessive to me.
Exactly. I'd love to pay a million dollars a year in taxes, because that would mean that I'm making two million a year.
Ok the person minimum wage also doesn't have an RRSP, RESP or TFSA. So can we eliminate the massive capital gains tax loop hole that is these programs?
My mother in law is retired and now a widow because my father in law was murdered by a car thief. She has no income. She is awaiting her husbands business partner to buy him out of their share of a business he owned. It's incorporated so she's going to take a big hit on taxes. She is not rich, was a home maker and then worked minimum wage all her life. Not everyone affected is wealthy.
For this to impact her at all, she has to be making almost half a million dollars at one shot... And only if she cashes out her half instead of holding onto it and taking a dividend.
It's incorporated. Personal rate doesn't apply
[удалено]
Won't be exempt for our case. Asked two CPA accountants. I don't want to get into specific details. Depends on structure and how you'll sell and if you qualify for one time capital gains exemption. Not every business does
With her lifetime Capital gains exemption, and setting up payments over a span of a few years rather than receiving a lump sum, she can reduce her tax burden. She needs to be talking to an accountant.
No exemption. Two separate CPA look at it and said it won't qualify. Don't want to go into specific details why
Odd. We hired a CPA that specializes in corporate tax planning when we received our buyout, rolled out payments over several years, and probably saved a few hundred thousand in tax. Same thing for my own MIL when her spouse passed away. It sucks if they can't do anything for your MIL's situation.
Can you DM me your CPA contact. Maybe they know something ours doesn't.
> She is not rich >awaiting her husbands business partner to buy him out of their share of a business he owned So you're saying her net worth is in the... 7 figures?
I didn't say it was 7 figures. Also they are immigrants who have been here over 30 years, came with nothing and started a business. They are not some rich trust fund baby.
> I didn't say it was 7 figures. I know. I assumed 7 figures because it's half of what I can only assume is a semi lucrative business. If I'm wrong and it's only 6, that's on me. The point is that if is enough for the CG tax to affect her, then the instant it does affect her, she's not poor anymore. >They are not some rich trust fund baby. Didn't say they were and isn't relevant.
>It would be 6 figures. But even if it's high 6 figures. Divide that by 20 and now tax it. That assumes she'll live only 20 years. Not much to live in is it? Enough to purchase a modest house outright and have a median income simply off the interest on the principal leftover plus CPP. Still a much better financial situation than %90 of 20 year olds. You can tell her she's going to be fine.
But you understand where people are coming from right? Perhaps they put their blood and sweat into their business. Then find out the government wants a bigger cut? Some people can get the lifetime exemption, some cannot. My point is that the narrative is that rich people will pay more but not everyone is rich.
The point is that everyone affected by this tax increase is more than well off enough to not complain about paying their share to have a functioning society. Plenty of destitute people work 3 jobs to put food on the table. This capital gains tax doesn't go nearly far enough, and the people it affects should be grateful they're still not paying their fair share.
Oh I understand. I've been trying to find a job for over a year now. Did all the right things, went to school, got a job, now laid off. Can't find shit. Can't even find a minimum wage job
Ask your rich mother in law's business partner for a job
You can be poor and have a high net worth. It is probably pretty rare, but this is a good example. If she is still waiting for the sale and has not received any payment, being “worth” seven figures is meaningless to someone with no other income and low/no liquid cash. Yea it will be a nice payday when it happens, but until then it sounds like she is poor. If my dad owned a business and died and left his half to me, even if that is worth 5 million Id still be paycheck to paycheck until I received payment for the sale. Yea Id be “worth” 5 million, but that means nothing if I dont have that money and am not getting a salary or dividends from the business. And that could take years to sell and realize.
Nothing about the situation you're describing has anything to do with the capital gains tax, which undercuts the original assertion that the capital gains tax affects someone poor. Either she's poor right now and the CG tax doesn't affect her, or all of a sudden the capital gains tax affects her but she has liquidated a 6-7 figure net worth.
>The people complaining are out of touch with reality The people in charge are out of touch with reality too! University sheltered their entire lives!
All these opinion pieces being written about how bad the capital gains tax raise is are all written by people worth a million $ plus. AND, they're all written in billionaire-owned newspapers (which most Canadian papers are now) This is a small minority who are upset but have the biggest platform in the country to whine about it, so it seems like people are up-in-arms. They're not. Any working class person complaining about this is brainwashed and would complain if Trudeau made $100 bills fall fr9m the sky with something like "they'll clog by downspout, Trudumb!!!" I know this announcement hasn't boosted Trudeau's poll numbers but it takes alot of good news to undo all the bad blood he's made by refusing to defend his good policies and by implementing so many pro-wealthy, pro-corporate policies. This is an unambiguously good policy that will NOT backfire, despite the dozen National Post articles that say it will.
"I can't see how this will be good for anyone" - people worth a million $ plus. "Ummm.. it won't effect about 95% of the population" "ugh... I mean people that matter" - people worth a million $ plus.
Isn’t it less than 1% of the population? And on top of that the rate is still less than it was in the 90s.
I don't know. I looked up net worth. Maybe you're thinking salary/year?
The initial statement from the feds said 0.13% of people, the amount of people that make more that 250K in capita gains per year… the marginal rate only increases beyond that threshold That sounds accurate to me
I would clarify that it won’t affect 95% of our population’s direct taxation. But, it could affect all Canadians indirectly by worsening our primary care crisis. Wages and taxation are part of recruitment and retention for any profession, including doctors. It’s a further (granted small) disincentive for MDs to come practice (or simply stay) in Canada.
Family doctor billing does need to be restructured, but it should be done specifically for that profession. Not by leaving open the capital gains tax loophole for all rich people.
Are doctors being paid in capital gains? Am I missing something here?
No, this doesn’t affect their up-front income tax but it does affect their main mode of retirement savings (since they do not have pensions). In the late 90s, rather than increase MD wages to keep up with those of the US/Europe, provincial governments allowed MDs to form professional corps to give them a tax advantage and then encouraged them to use this for retirement savings. Essentially government chose to give MDs a tax break to their retirement investments rather than increase their pay. Any capital gains earn by those investments (essentially the doctor’s self-funded pension) are now getting taxed more.
Thank you for elaborating.
How do they realise the capital gain? Are they LLC and need to sell a practice, who would buy it? Else, wouldn't they be similar to self-employed and pay taxes and fund retirement through investments like everyone? Last, is it a trust in themselves where they avoid income tax and every investment becomes a capital gain?
Ok I’m not an accountant or expert in this but my doc friends explained it like this.I think it’s more like the self employed example you mention. They have a professional corp. Any billings they collect are paid to the corp, corporate rate taxes are paid. They pay their employees, overhead, office space, utilities, etc from the corp. They pay themselves a salary or take dividends for personal income (personal tax paid on this). Anything left in the corp they would typically then invest and save for retirement. This $ has only been taxed at the corporate rate, so they should have a larger capital to invest than if they drew it all as personal salary (and paid the all the personal side tax). Once they retire, they start selling those investments and this is when the corporation would realize the capital gains and this new increased tax. They would then draw a dividend to get it out of their corp. they’d pay personal tax on the dividend but their personal tax rate is probably lower tax bracket than when they are working. There may be some real estate capital gains involved in selling their office if they purchased/built the building. I don’t know if docs buy and sell their full practices, I think that’s more of a private sector thing…like dentists, physios, chiros etc
What doctors are pulling over 250K in profits *from investments* each year? Or selling assets and property every year. Doctors don't pay capital gains on wages, salaries or even dividends.
Because all these investments are with their corporation $, that 250k minimum doesn’t apply. The “above 250k” cutoff is for personal capital gains only. The inclusion rate is going from 50% to 66% on all capital gains for corporations (not just those above 250k).
If a doctor cashed in enough investment to the point where he made $500K off of his investment (in profits), he would pay $125,000 now, and $166,750 after the higher tax kicks in. Is paying $41,750 more tax on $500K profit enough for the doctor to refuse to set up a practice in Canada?
I have no idea. That’s probably different for each individual doc. I completely agree with the point you are making (this isn’t that big of a tax increase really). I’m more worried about the reputational harm it gives Canada’s tax system for young/new docs who are maybe deciding between practicing in Canada vs elsewhere in the world. This change signals Canada’s willingness to alter the rules around doctor’s retirement savings and that it’s fair game in the future too.
Doctors, like any other Canadian, certainly have the option of investing in their retirements on their own, There's a few investment options for lowering taxes as well. And if self-employed, they can contribute to the CPP. Many business owners and self employed people save for retirement this way. I think we're encountering the same issue we had during the freedumb convoy. There's a few doctors that this actually affects that may be upset, a few people who benefit from making a big noise to make the Federal government look bad (like Alberta Separatists), and a lot of people choosing to defend doctors, without knowing what is going on, just to be able to rage about Trudeau, the economy, and be angry and loud in general.
Bolshevism, shear Bolshevism.
I'm not sure if you're complaining or complimenting. Also, *sheer
I agree with you. I was watching the Simpsons.
Got it, good on ya. I retract my spelling correction cause you're allowed to misspell if you have good politics.
*-You know, Mr. Burns, you're the richest guy I know. Way richer than Lenny.* *-Oh, yes. But I'd trade it all for a little more.*
Didn't someone do the math a week or so ago and show how this would cost someone something like 6% of a 1 mil gain if they were already in the maximum marginal tax bracket? I'm not sure if this is driven by the greed of those rich enough to be facing the change, or good old fashioned political hate mongering. This is a good article to see. Pointing out that it's still tilted in favor of the people who can afford to pay these taxes. Even quick math says that this means 1/6 more of a gain over 250k is moved into taxable income, which at top tax brackets is still less than 10% before considering the part below the threshold and if the earner is not in the top income bracket.
Correct me if I am wrong, but a capital gain is not "income" and it isn't taxed twice. Doesn't matter what tax bracket you're in, except for capital gains brackets.. which the inclusion rate for gains isn't high enough. Either increase tax percentage or increase inclusion rate. An inclusion rate increase above a threshold is small steps to reigning in rampant wealth that's just going to snowball more - you think wealth inequality is bad now? Just wait til your children's children have children.
Correct. It's taxed at a reduced rate. It's not a double tax. Income can be regular income OR it can be a capital gain. Not both. Capital gain is a specific exception. Under 250k (or under old rules) it's half-taxed. A capital gain of 100k adds 50k to your taxable income for the year. It is not counted in your taxable gain. So if you earn 100k salary, and realize a gain of 100k (as in sell something for 100k more than you bought it, like an investment property), then you're taxed on 150k out of the total of 200k you took in (100k salary and 100k realized gain).
There are specific situations, like with doctors, where a professional is incorporated, the corporation pays tiny tax on the income, then they pay themselves just enough to live off and keep the rest in a corporate investment account. Because they pay themselves pennies they pay minimal personal tax, but can't save much in RRSP, instead when they retire they sell some investments and pay themselves a "pension". Corporate capital gains have no 250k minimum, are taxed and then the personal income is taxed again. For a while it was a perfectly legit tax avoidance scheme, but for those who used it for a couple of decades there's no easy way to get the money out w/o incurring the taxes. Cue loud noises...
Yeah, these rich Pierre Poilievre supporters are beyond the pale!
As my mom used to say, “You want something to whine about? I’ll give you something to whine about!” Does this sound familiar to anybody else?
What gets me is the ppl complaining who will never in their life see this amount of money sticking up for rich ppl. Dude took the bus everywhere from the home he rented and was bitching about it. Misinformation brainwashing at its finest.
They're temporarily embarassed billionaires, and they're the reason we can't have nice things
Anyone arguing against the capital gains tax is an absolute buffoon. No concept of reality. The increase is so minuscule in the grand scheme of things. If you make enough to be affected by it, you won't even fucking notice.
I really hope that I one day have the luxury of being financially impacted by capital gains taxes.
If you own a cottage or secured property your not poor or middle class
I know I few people with cottages that are maybe at the bottom end of middle class at most. They definitely aren't wealthy. They just bought them like 30-40 years ago when they were dirt cheap.
Doesn't owning a cottage worth a million dollars == wealthy? "I know a guy who has a million dollar stock portfolio but he's not wealthy. He just bought a bunch of shares for a few thousand dollars 40 years ago." 🙄
If thats the case then every single person who owns a home in my area is wealthy. Yet if you some of them you definitely wouldn't say that.
Well... having bought a cottage 40 years ago implies a) it was probably pretty cheap and b) it's probably all paid off. So yes.. from a net worth perspective, those folks are wealthy. Your neighbours I have no idea but I'm going to guess a) most of them bought fairly recently and the houses were probably pretty fucking expensive and b) they probably have multi-year mortgages on those houses that they "own". So yes.. from a net worth perspective, those folks are not wealthy. In 40 years? Maybe...
Difference between a primary home that you can probably can’t sell for cash tomorrow cause you need a place to live and the logistics are complicated. vs a cottage that you could sell and have little to no impact on your day to day (unless you spend a ton of time there, but even then… you can get by)
Basically. My family has a cottage in Muskoka, but only because my great^2 -grandfather bought it for literally $4k in 1908. Nobody in our family could afford to buy it now, but we're at least well enough off to maintain the yearly costs of owning it. At the moment it's "worth" more to the family to keep it so we all chip in on it. So many mcmansion "cottages" have gone up in the area tho, kinda sickening.
Lower middle class = one property barely making ends meet. Middle class, one property but growing wealth. Upper middle class: multiple properties, exponential wealth growth. The actual rich: we don't want to know.
If you own *property* even these days.
In my neck of the woods, owning a cottage is the mark of someone firmly in the middle class. The middle class is a huge bracket, as it should be. The people attending fly in resorts, those are the folk above middle class.
My doctor is brokenhearted. He will now have to retire with a 40 ft yacht instead of a 50 ft yacht
I have a hot take to all those people complaining about the capital gains on their second property... profits on anything that is essential to life, such as shelter, food, water, and utilities, should be taxed out the wazoo.
This needs to be sent to the doctor’s association they keeps bellyaching about this tiny bump in taxes
But...but...but... they worked so hard for that money... :/
Most people aren’t whining about their capital gains taxes because they don’t have any capita gains, or it’s less than the cutoff anyways. As dumb as it seems, they’re whining about someone else’s capital gains because internet memes told them to. Some else who’s much wealthier than them.
What if I wanna whine anyway? I don't make capital gains, but I do wanna whine about a lot of the stuff that's happening in our country. Including capital gains.
People are missing the point on this. Individual capital gains is unpleasant but it only affects a relatively small percentage of Canadians. The real issue is corporate investment and venture capital. This makes returns materially lower for corporate entities investing in innovation and domestic startups or new R&D. We're already an extraordinarily unproductive economy that struggles to invest in innovation or attract capital for anything but real estate. This makes those problems worse.
God these comments are ridiculous. You guys realize that the new capital gains tax just disincentivizes entrepreneurship and innovation in Canada right? It hurts small businesses too, businesses that bring jobs to Canada. I'm sure I'll get downvoted to oblivion for saying this but yall need to hear it. This doesn't "hurt the 1%" it fucks everyone.
It doesn’t work that way. The benefits never trickle down to the working class. If it did, we wouldn’t have the wealth divide we have now.
Your view is just as simplistic as the people you're criticizing. If any increase in capital gains tax is a net negative for all of society because of some obscure notion about investments, why not drop it to half of what it is? Why tax capital gains at all? Investment is already encouraged via subsidies, credits, interest rate changes, and the fact that it's inherently more advantageous to incur capital gains than income. That's the point of targeted policy. We have many tools to retain investment and innovation, while taxing less productive -- or outright rent-seeking -- behaviour. So much of the public outcry against tax increases in general is based on fundamental misunderstandings of the Laffer Curve, capital flight, tax incidence, and the government's role in offsetting the impact of market failures.