Perhaps the most drastic change in the recent federal budget is the hiking of the capital gains inclusion rate. This supporter of the change works out the math and finds that effectively treating a capital gain as wage income is just fine with him. The fact that an investor risks the loss of assets if the business fails is, to him, equivalent to the risk borne by the wage earner who gets paid every two weeks and never has to deal with the loss of a dime of capital to sustain the business.
Here’s the text of his X post:
$1 in wages. Top marginal tax rate = 53%.
Keep $0.47. $1 in corporate profit –> 26% corporate tax rate = $0.74 distributed as capital gains –> 50% inclusion rate = $0.37 taxed at 53% personal. All in, roughly 46% tax rate overall. Keep $0.54. Better than wages (and better than interest or dividends).
At 67% inclusion: roughly 52% tax overall for capital gains. So keep $0.48. Close to treatment of wages!
And on top of this, they still want to tax unrealized gains as income.
They won’t be happy until you have no money
They also seem to want to discourage people from working hard and taking risks… why would that be?
No, there’s no discouragement for working hard and/or taking risks. Just don’t expect that YOU will get the benefits of that work or risk. Because serfs don’t own stuff, they are owned.
Trevor Tombe is the economist who is the biggest fan of equalization and carbon taxes.
He lives in a progressive bubble.
Idiot is actually describing dividends, companies do not disburse profits as capital gains. Dividends already have a special rate that is adjusted to be nearly equal to wages when considering the whole tax system involved.
Capital gains are when you buy an asset and then sell it for a higher price. There is no allowance for the fact that the capital gains taxed may in fact be a loss when adjusted for inflation, or that there may have been considerable expenditures in maintaining or upgrading the asset before sale for the higher price.
The stupidity on display by so many credentialed and seemingly educated people has convinced me that they are not naive or misinformed, they actually do want the dystopia everyone can see.
Thank you! Very few people understand these differences.
Thank you, Deplorable. Well expressed.
“they actually do want the dystopia everyone can see.”
Yes. Not for themselves, of course. They have cushy inflation-proof government jobs. Just for the rest of us.
By FAR the dumbest mofos I have ever dealt with in life have been PhDs. Feck me, it’s miracle any of them can even wipe their own asses. BTW the number of times and the scale of clean up of shoddy analytics work done by some doofus with a PhD has to be seen to be believed.
Don’t forget to CUP THE BALLS, FILTHY JAGMEET
is my simple minded math correct here.. days in 7 years=2555, 4,000,000 promised homes in 7 years= 1565.5 houses needed to be built a day, starting yesterday?.. by the people who couldnt build a worm farm!.. Is this accurate?
Don’t worry about it, You’ll a sudden exit of many property development companies (or an increase in prices) now that the government has decreed that 2/3rd of their capital gains, which would be used for the next project should be taxed at the top marginal rate…
Wait until they find out how long the permit process takes to build these buildings on the only logical city corridors that can support them. In the GTA, they have to deal with the City, the utilities, Metrolinx, and the TTC. Good effing luck. Oh, and the City of Toronto is only just now going online with document management. It’s already a sh!t show.
As an aside, it’s interesting to note that despite the fact that Toronto “amalgamated” in 1998, each of the boroughs seems to operate independently for approvals. North York remains, far and away, the most easy area of the city to to business with.
I’m sure the idiot professor is a fan of Moron Monetary Theory as well.
There are very few investment vehicles that pay out as “capital gains” though some partnerships pay out as “return of capital” which is a bit different.
The tax rate for capital gains should be zero, because those capital gains either get spent, and put back in the economy, or invested in a new project which will hopefully grow.
But the government has decided that additional capital destruction is required to pay for their drunken spending.
“though some partnerships pay out as “return of capital” which is a bit different.”
Sorry, it’s a lot different. A return of capital typically occurs when an investment proscribes a specific rate of return; and in order to meet that return the investment company has to give you back some of the money you originally invested as part of the return. They then hope that due to their “investment brilliance” they will make up for this blunder with future increased investment returns. If you’re investing in something that regularly issues a return of capital, then get out of it. One of the few places where this is commonly part of the planned investment payout is an annuity.
ask the dew worm if the firm fails do workers have to give back their wages seeing as they failed to ensure success?
the amount of very selective thinking in some peepull.
The only part of his tweet I don’t understand is the part that came after ‘it’s simple’.
He doesn’t understand it either…
This sums it up nicely:
https://twitter.com/SaskatonSkeptic
Less progressive countries like Chile adjust capital gains by the CPI (price inflation index) taking into account the devaluation of the currency over the period the investment was held.
Inflation is a tax that the system is geared to create to offset the cost of debt.
In Canuckistan, capital gains taxes are on top of the lost purchasing power of the investment over the period it was held. It’s a tax on tax.
That adjustment for inflation by Chile and others is fair. And nothing the Lieberals would consider. FYI, the cumulative rate since the turn of the century is greater than 65%.
Capital gains should not be taxed at all. Taxes were already paid on the income required to buy the asset.
Exactly. Capital gains taxes (investment taxes in general) are wealth taxes. The dividend tax structure, at least, is an attempt to equalize corporate and individual tax rates for corporate income. Capital gains taxes, and more importantly, interest income taxes (because of the sheer number of people it affects) are straight up government theft of a citizen’s wealth.
Only a Marxist economist–oops, today that’s mostly synonymous–would equate capital gains to income in attempt to appeal to the average joe’s envious covetousness.
I’ve only known 2 types of economists, and reasoned how “the dismal science” moniker came to be.
There’s the Marxist/Socialist, who promises grand things and glorious futures and can never deliver (but it’s always someone else’s fault).
Then there’s the Libertarian, who says “you can’t have your cake and eat it too.” Always limiting what can be done, and pointing out the negative consequences that a bad policy will incentivize.
So they’re either wrong (commies) or pointing out the downside of things (freedom lovers). Because change very rarely means improvement, but a change-addicted society doesn’t want to hear that.
Looks like cappycap isn’t very active anymore. https://captaincapitalism.blogspot.com
I’d forgotten about him.
Communists think they can call themselves economists because the words sound (to them) so similar.
For the most part, capital gains are a tax on inflation. In a world where there is no central bank, and interest rates are set by the supply and demand for credit, capital gains would be few and far between. In the world we live in, interest rates are almost always below market due to money printing and that creates capital gains. My farmland, produces the same amount whether it is worth $100 or $1000000 per quarter. It is inflation that makes the price. So the solution to this problem is to have a free market in credit and then capital gains would be few and far between so no need to tax them.
Cancel this OBCENE Tax AND Cancel these MARXISTS with extreme Prejudice.
The MEEK need to start flexing on these FILTHY LIBERALS
So if all investors pull their cash from Canadian, invest abroad, exactly how will the Liberals fix it, buy up the shares with our tax dollars. The Trans Mtn formula for success, take a 5 billion $ private project and turn it into a 30 billion $ fiasco.
The home project should be interesting, are they using some of the 50 billion trees they didn’t plant to build them?
Question: How does one make a small fortune?
Answer: Start with a large one!
The Government they voted for, good and hard.
This will take away the sting.
https://youtu.be/HbMXYgYxRaY?si=HrE40iw3_TZGYzdE
Institutional investors already shun Canada due to its anti-business Jacobins and Bolsheviks in government. These changes will confirm their judgement and accelerate the capital flight.
Which is where inflation (initially as CAD gets repatriated into circulation) followed by deflation (as demand for credit dries up) will come from.
Good times.
WAGE EARNERS in the top tax bracket? Hardly.
Must be referring to salaried government apparatchiks.
Unlike the government appartchiks with gold plated pensions and benefits coming out their wazzzzzzzooos,
ordinary Canadians have to put $$$$ aside for retirement. Some count on selling their business or have put their savings in stocks esp since Bank of Cuckistan policy was to punish those who put savings into GICs.
Should something unforeseen happen to those who planned for retirement, they or their estates will take a big hit.
Ditto with grandma wanting to pass the family cottage on to the next generation.
Only in Cuckistan you say?
I have a riff that I expect will last me about 12 more years, taxed at 20% and every year I still write a cheque for 0ver $4,000 to CRA. I am not rich and I do not expect to live another 12 years. The government has reduced my purchasing power every year for decades now. I can no longer envision the disaster that is coming with our communist loving population, who have been educated to accept that they can get everything from someone else for nothing.
Good point. It takes $634 to buy the same basket of goods that cost $100 back in 1974 (using gubmint CPI numbers).
Inflation is a stealth tax scam run by the money changers.
On our RIF’s we are being taxed as if we are pocketing $534 in investment income that a $100 investment would have earned. Tax on tax.
https://www.bankofcanada.ca/rates/related/inflation-calculator/
I don’t expect the Prime Minister to understand this, or even the Finance Minister. I don’t expect the average voter will get it. The kids have no idea. Seniors living on a fixed-income will know. The answer to a very important question. Why do we let the government take $0.52 while we get to keep only $0.48 of every dollar we earn?
Tax on capital gains? The government steals everyone’s money by inflating the currency. Then they tax people on the inflationary gains they create.
Saskatchewan Scott Moe has begun the first Tax Revolt in Canadian history. Calgary’s Gondek may have survived her recall because the media hid her Trudeau Re-Zoning $cam. Tax revolts, general strikes, harsher protests.