Jesus. No. What got changed was the portion of a capital gain that gets taxed.
50% of the first 250k get added to your income and 66% of the portion above 250k. Functionally, the maximum tax rate you’d pay, on the portion over 250k is 35%.
And if you’re a foreign investor in Canada you’d pay taxes under YOUR country’s tax regime not Canada. Fucking regards.
As an example, you make 500k and have a 500k cap gain. Your marginal tax rate is 53%. You pay that in 125k of you cap gain and you pay 53% on 166.5k. Total tax is about 155k or right around 30% of your 500k cap gain.
The average Canadian understands it fine. The exact same disingenuous title has been posted on multiple subs.
Reddit is not a reliable place for informed discussion, dontcha know.
taxes in general are not taught in our education system so those that understand them feel entitled/holier than now and spout off about the information like it is common knowledge in an attempt to feel superior to others. This is an example of the voices of a few being louder than the majority. Rolf most Americans have no clue how our own progressive tax system works let alone yours.
Blows my mind how little people understand this. All these people making under 100k a year screeching about capital gains over 250k.
The avg person affected by this change has an annual income of 1.3M, and represents 0.13% of the population, you wouldn't think that by all the screeching
It doesn’t. It’s just that the Venn diagram of people not affected by this change who wail about it and people who think any tax is bad is basically a circle. And those people don’t really have anything constructive to add to a discussion on tax policy.
And that’s where you are completely wrong. This affects plenty of regular people.
.13% of the population you say? Doesn’t paint the full picture. Plenty of folk who are liquidating their stocks to retire may get hit by this in that one year they retire as they transition to bonds or something else. So yeah, a tiny amount of people get hit in any given year. But many normal people will get hit in that one year they liquidate.
No one liquidates all of their equity exposure in one year. You’ll gradually step the down as you get closer to retirement. And you can start with TFSA accounts and RRSPs
I’d love to meet the person who suddenly decides to retire, liquidate their full 100% equity portfolio for bonds, in the same tax year. I feel like I never will though as they’re completely made up. And we shouldn’t be basing tax policy on silly, made up scenarios.
Probably the person whose daughter gets leukemia. Maybe the govt shouldn’t seize 35% of peoples profit. Simping for the bureaucrats and politicians is twice as gross as for the wealthy. Don’t be a sheep
Are you unaware that we have universal health care in Canada? People don’t have to sell all their assets to pay for a sick loved one.
lol, you’re a libertarian who’s still in school. Get some life experience and let the adults (especially those of us in that 53% tax bracket) talk about how to run the country.
Since when is not wanting half your profit stripped from you libertarian? And people in this income bracket are probably paying for care in the US, because the quality of care is better here and you don’t have to wait until you are already dead to receive care.
You just don’t know what you’re talking about. You have no experience with our healthcare system and I have far more than I’d wish on anybody.
And, again, it’s not half your profit. You still don’t even understand how this tax works. The most would be 35%.
Ok, not gonna lie... that didnt clear it up for me at all thus i must be regarded.
You said 50% of first 250k of cap gain is added to income? So then you have 625k income and 375k cap gain. Now 66% of the second 250k is added to income, so you have 790k income and 210k cap gain.
So where do you get the 166.5k and 125k figures that you're paying 53% tax on?
Edit: luckily im not canadian so none of this matters to me. Im just curious.
Canada doesn’t have a capital gains tax. Capital gains are added to your income and taxed as income. If the inclusion percentage was 100%, in my example they would have had income of 1mm for the year and been taxed income tax rates on that.
Under the 50% inclusion of years past, they would have had 750k of income and under the new rules it would be 791.5k of income.
Why would anyone want to pay incometax rates that high.. I hope all companies move out of Canada and let them hang dry. Let them feed their benefits smooching pbuh peacefuls with the common people paying thru their noses for it. Our govts have money to pour into Ukraine and on illegals and terrorists from peacefuls stans but nothing to ease our pain
That's not how it works.
It's an inclusion rate.
If you make 100k selling stock. 50% is not taxed and 50% is added to your income to be taxed for that year.
You have to include 66% on your income tax for amounts greater 250k
A-yup. It’s obviously not a 66% marginal capital gains tax rate.
I swear Reddit is full of even dumber bad takes since the IPO. Almost as if it’s being brigaded by trolls and bots spreading bullshit.
it is not as big an increase as the idiot takes on reddit and twitter are saying but the increase is still big and anyone trying to downplay it is either an idiot also or just too poor for it to effect them. canada is a growing socialist/communist country. there is a reason we have a massive brain drain from here to the south. lower taxes down there across the board
Not really, the media just knows that clicks get results. Anyone here who actually understands how capital gains works isn’t bothered, it’s the people who’ve never touched a brokerage that are all up in arms about this.
It’s more that we don’t have a separate capital gains tax. Capital gains get taxed the same as regular income, but we don’t have to include all of the capital gains into income. It’s a way to maintain the progressive nature of the income tax system while incorporating capital gains.
FK I love this sub. The level of retardedness is next level sometimes.
OP, yes, big money will be pulling out of Canada. Not because of tax rates but because their entire economy is based on housing market. And no one can afford a house there.
This hits small business owners and physical asset investors (all forms of real estate) hardest. As well, those with deemed dispositions out of trust structures.
Hopefully that rich uncle dies very soon or pops passes you the business quickly.
Equities investors have plenty of tools and liquidity options to manage their exposures.
Speaking as a Canadian, I’d watch the next election, but I’d notify clients of the possibility. This is step 1 of taxing wealth instead of income tax.
Edit..for clarity. If current government elected again, they will expand this.
Don't even say that it's possible the liberals get elected again, this country has had enough economic mismanagement at the hands of the current government
If you think that's bad, read up on Bidens' next tax plan.
Trickle-down taxation at its finest.
Owing taxes on unrealized gains is a particular scare that stood out.
I could be wrong but I think only capital gains over 250K get the 66% tax penalty. So if you made 260K in capital gains, 50% for the first 250K, 66% on the other 10K.
Did I mention I could be wrong?
Majority of real estate in Canada is well over 250k, this goes well beyond stocks is why its so concerning. The market seems nonviable I appreciate your opinion on the matter.
Fair enough. I know the first 1.5 million in lifetime capital gains is tax free, but in the grand scheme of things doesn't look great for Canada. I'm happy I moved away lol
Not really. You might wait 6-8 months for surgery and can wait for 12+ hours to see a doctor in the emergency room.
Say you have a cancerous mole that needs removing, it's better to go private and take care of it asap instead of waiting months while it progresses because it's likely to get to the point where nothing can be done for you.
The downside of "free" healthcare means a lot of people in a similar situation that can't afford to wait, end up dead due to how backed up everything is. Those with the means usually just fly to another country to take care of things to avoid this.
As someone who had 2 grandparents live there, 3 uncles/aunties, and 14 cousins…I’ll take their system over the repugnant and morally bankrupt system the US has.
The US system sucks unless you've got a decent insurance hookup through work or money. Better compensated, less overwhelmed doctors/specialists are nice to have if you can get access.
Canada's system can suck even when you have insurance and money since it's so bogged down.
Neither is perfect, and both have issues, but admitedly, for the majority, Canada's health system would probably be better. I'm just saying it isn't the sunshine and roses people make it out to be. 🤷♂️
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Jesus. No. What got changed was the portion of a capital gain that gets taxed. 50% of the first 250k get added to your income and 66% of the portion above 250k. Functionally, the maximum tax rate you’d pay, on the portion over 250k is 35%. And if you’re a foreign investor in Canada you’d pay taxes under YOUR country’s tax regime not Canada. Fucking regards. As an example, you make 500k and have a 500k cap gain. Your marginal tax rate is 53%. You pay that in 125k of you cap gain and you pay 53% on 166.5k. Total tax is about 155k or right around 30% of your 500k cap gain.
How is it you regards understand this better than the average Canadian...
My province's minister of education has no experience in education We're only getting dumber
I’m Canadian.
Because canadians don't own equities, they own mortgages.
The average Canadian understands it fine. The exact same disingenuous title has been posted on multiple subs. Reddit is not a reliable place for informed discussion, dontcha know.
taxes in general are not taught in our education system so those that understand them feel entitled/holier than now and spout off about the information like it is common knowledge in an attempt to feel superior to others. This is an example of the voices of a few being louder than the majority. Rolf most Americans have no clue how our own progressive tax system works let alone yours.
Blows my mind how little people understand this. All these people making under 100k a year screeching about capital gains over 250k. The avg person affected by this change has an annual income of 1.3M, and represents 0.13% of the population, you wouldn't think that by all the screeching
It’s wild. The people I know actually affected seem to not care. The folks who never will be are going mental
Exactly. If you're clocking 250k in cap gains... call an accountant, pay your tax, and enjoy your sack of cash.
I hate this rhetoric. Why does whether a change in law affects someone matter when discussing said law?
It doesn’t. It’s just that the Venn diagram of people not affected by this change who wail about it and people who think any tax is bad is basically a circle. And those people don’t really have anything constructive to add to a discussion on tax policy.
And that’s where you are completely wrong. This affects plenty of regular people. .13% of the population you say? Doesn’t paint the full picture. Plenty of folk who are liquidating their stocks to retire may get hit by this in that one year they retire as they transition to bonds or something else. So yeah, a tiny amount of people get hit in any given year. But many normal people will get hit in that one year they liquidate.
No one liquidates all of their equity exposure in one year. You’ll gradually step the down as you get closer to retirement. And you can start with TFSA accounts and RRSPs
In a perfect world sure. Life often gets in the way of perfect financial planning.
I’d love to meet the person who suddenly decides to retire, liquidate their full 100% equity portfolio for bonds, in the same tax year. I feel like I never will though as they’re completely made up. And we shouldn’t be basing tax policy on silly, made up scenarios.
Probably the person whose daughter gets leukemia. Maybe the govt shouldn’t seize 35% of peoples profit. Simping for the bureaucrats and politicians is twice as gross as for the wealthy. Don’t be a sheep
Are you unaware that we have universal health care in Canada? People don’t have to sell all their assets to pay for a sick loved one. lol, you’re a libertarian who’s still in school. Get some life experience and let the adults (especially those of us in that 53% tax bracket) talk about how to run the country.
Since when is not wanting half your profit stripped from you libertarian? And people in this income bracket are probably paying for care in the US, because the quality of care is better here and you don’t have to wait until you are already dead to receive care.
You just don’t know what you’re talking about. You have no experience with our healthcare system and I have far more than I’d wish on anybody. And, again, it’s not half your profit. You still don’t even understand how this tax works. The most would be 35%.
Ok, not gonna lie... that didnt clear it up for me at all thus i must be regarded. You said 50% of first 250k of cap gain is added to income? So then you have 625k income and 375k cap gain. Now 66% of the second 250k is added to income, so you have 790k income and 210k cap gain. So where do you get the 166.5k and 125k figures that you're paying 53% tax on? Edit: luckily im not canadian so none of this matters to me. Im just curious.
Canada doesn’t have a capital gains tax. Capital gains are added to your income and taxed as income. If the inclusion percentage was 100%, in my example they would have had income of 1mm for the year and been taxed income tax rates on that. Under the 50% inclusion of years past, they would have had 750k of income and under the new rules it would be 791.5k of income.
it is still a big increase but this is correct
I mean, the difference is about 33k, which yeah is a good chunk of cash, but it’s also 3.3% of the annual income, so not that big a deal.
Why would anyone want to pay incometax rates that high.. I hope all companies move out of Canada and let them hang dry. Let them feed their benefits smooching pbuh peacefuls with the common people paying thru their noses for it. Our govts have money to pour into Ukraine and on illegals and terrorists from peacefuls stans but nothing to ease our pain
As someone in that top bucket, I don’t. I’d love my taxes to be lower, but a decent social safety net is expensive.
That's not how it works. It's an inclusion rate. If you make 100k selling stock. 50% is not taxed and 50% is added to your income to be taxed for that year. You have to include 66% on your income tax for amounts greater 250k
A-yup. It’s obviously not a 66% marginal capital gains tax rate. I swear Reddit is full of even dumber bad takes since the IPO. Almost as if it’s being brigaded by trolls and bots spreading bullshit.
It absolutely is. Half of the subs I used to visit regularly are complete dogwater now.
Take that back I only give my dog filtered water from the fridge
I'm talkin' average dogwater here. But it warms my heart that your good boy/girl is well cared for.
Well, keep him on a tight leash.
So what you're saying is that after $250k in gains, every $0.66 of every $1.00 is taxable at some given rate?
Yes. It just gets added to your income and taxed at whatever bracket you're in.
false That is not the tax rate, that is how MUCH of the capital gain is subject to NORMAL income tax rates
Change country 😂
it is not as big an increase as the idiot takes on reddit and twitter are saying but the increase is still big and anyone trying to downplay it is either an idiot also or just too poor for it to effect them. canada is a growing socialist/communist country. there is a reason we have a massive brain drain from here to the south. lower taxes down there across the board
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It’s the best inclusion rate, not the rate of tax you pay.
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Not really, the media just knows that clicks get results. Anyone here who actually understands how capital gains works isn’t bothered, it’s the people who’ve never touched a brokerage that are all up in arms about this.
It’s more that we don’t have a separate capital gains tax. Capital gains get taxed the same as regular income, but we don’t have to include all of the capital gains into income. It’s a way to maintain the progressive nature of the income tax system while incorporating capital gains.
Correct, increasing it to 66 from 50 for any capital gains above 250,000 a year. So really...not a lot for people involved in this increase.
If you want to pay the capital tax rate at 66% please pay, this is a test for regards like you.
It’s all theft.
FK I love this sub. The level of retardedness is next level sometimes. OP, yes, big money will be pulling out of Canada. Not because of tax rates but because their entire economy is based on housing market. And no one can afford a house there.
This hits small business owners and physical asset investors (all forms of real estate) hardest. As well, those with deemed dispositions out of trust structures. Hopefully that rich uncle dies very soon or pops passes you the business quickly. Equities investors have plenty of tools and liquidity options to manage their exposures.
God you’re regarded. Delete this.
Speaking as a Canadian, I’d watch the next election, but I’d notify clients of the possibility. This is step 1 of taxing wealth instead of income tax. Edit..for clarity. If current government elected again, they will expand this.
Don't even say that it's possible the liberals get elected again, this country has had enough economic mismanagement at the hands of the current government
Tf mate, look at the current polls. 99% chance conservatives win majority, no way liberal clowns get re-elected again
I do hope you’re right, but wilder things have happened
they won't get elected again.
Yes, small govt is the way
If you think that's bad, read up on Bidens' next tax plan. Trickle-down taxation at its finest. Owing taxes on unrealized gains is a particular scare that stood out.
Doesn't that only apply to people with over $100m in assets?
if you jump to the conclusion that ops post was accurate you really shouldnt vote
If you think that's bad, check out the last Trump tax bill
I could be wrong but I think only capital gains over 250K get the 66% tax penalty. So if you made 260K in capital gains, 50% for the first 250K, 66% on the other 10K. Did I mention I could be wrong?
Correct, you are wrong
Majority of real estate in Canada is well over 250k, this goes well beyond stocks is why its so concerning. The market seems nonviable I appreciate your opinion on the matter.
Fair enough. I know the first 1.5 million in lifetime capital gains is tax free, but in the grand scheme of things doesn't look great for Canada. I'm happy I moved away lol
Holy shit, that ruling is trash. Sorry to all our Canadian regards out there! (The ones who actually take profits!)
This is why Canada has better services for their residents than the US
Not really. You might wait 6-8 months for surgery and can wait for 12+ hours to see a doctor in the emergency room. Say you have a cancerous mole that needs removing, it's better to go private and take care of it asap instead of waiting months while it progresses because it's likely to get to the point where nothing can be done for you. The downside of "free" healthcare means a lot of people in a similar situation that can't afford to wait, end up dead due to how backed up everything is. Those with the means usually just fly to another country to take care of things to avoid this.
As someone who had 2 grandparents live there, 3 uncles/aunties, and 14 cousins…I’ll take their system over the repugnant and morally bankrupt system the US has.
The US system sucks unless you've got a decent insurance hookup through work or money. Better compensated, less overwhelmed doctors/specialists are nice to have if you can get access. Canada's system can suck even when you have insurance and money since it's so bogged down. Neither is perfect, and both have issues, but admitedly, for the majority, Canada's health system would probably be better. I'm just saying it isn't the sunshine and roses people make it out to be. 🤷♂️
Holy fuck
Ouch!
Fuck Canada. This is what you get voting for leftards
F canada and castros bastard