Rich kid Pierre Poilievre who got his pension early at age 31 and had his dental care covered.
Doesn’t want you to have the same things even if you worked longer hours and for more years.
Seriously, the guy it tone deaf. Only reason he became popular is because of people who got fucked by the housing market. Now he sides with people claiming capital gains > 250k in a year? Really?
Hopefully this video will resonate with some people. It’s really well explained.
Oh no, they closed a loophole for rich people to avoid taxes… anyway…
I wouldn’t say they closed it. They narrowed it.
I’ve been thinking about this quite a bit, and I’m still not sure why a 100% inclusion rate is a problem. (With various exemptions for primary residence sales and small business sales, maybe with a $1MM lifetime maximum? idk, just making up a number.)
Are they concerned that people just… aren’t going to invest their capital to earn more money if they’ll be taxed on the profits? Or is this just a global “race to the bottom” that they won’t invest in Canada because they can earn more if they invest elsewhere?
Maybe something like: 50% inclusion up to $100K, 75% inclusion up to $1MM, then 100% inclusion thereafter, and add a mechanism to spread capital gains over several years so people making single-lifetime large capital gains aren’t treated the same as people earning millions every year.
That would still incentivize small-business creation and startups without letting multimillionaires off the hook.
I like the cut of your jib. Some of the most vocal complaints are things like someone holding a cabin or other piece of land for an extended time, and then having to claim the gains in a single year. Especially in cases like an inherited cabin that’s held for 30 years then passed to next of kin so a particular owner never actually paid or was paid for the property, but probably did spend as much on maintenance over that time as their assessed gains. Spreading those gains across multiple tax years that have already been assessed would seem fair(letting them claim the gains at a lower marginal rate by spreading it over multiple years) though administratively difficult. I would also like the idea of putting in a lifetime exemption around the $250 k range which would make a big difference for those who might only ever pay capital gains due to that one property, but not really affect those who make most of their income as capital gains.
Maybe the thought is that they were already taxed on the capital when they earned it?
Not very compelling but it’s the only other reason I can think of.
But isn’t the capital gains tax only on the new capital gained? What you’re saying actually sounds like a decent argument against sales taxes.
That’s the argument, but it doesn’t really hold water to me. That would lead to an environment where those with little capital get taxed on their entire income, making it hard to save more capital. Those that already have lots of capital could then leverage that capital to generate a tax-free(or limited tax) income, which seems like exactly what we’re trying to avoid. We do have TFSAs which do allow us to grow our assets tax free, and they’re limited to prevent those with excessive capital from dodging their entire tax burden.
To some extent, you might want it the other way around, those providing labour and covering basic living expenses should pay limited taxes(which is kind of how things work now when you consider the basic exemptions, GST rebates, child tax benefits, etc.) while those who have essentially a passive income should pay a higher rate. The argument for the current capital gains taxation is that you want to encourage people to invest in things like a business that grows the economy, rather than purely financial vehicles like bonds and loans that mostly just concentrate wealth without contributing to a healthy economy.
Oh I saw something in the globe yesterday about this. It’s because the corporations themselves pay income tax, which is essentially reducing the capital gain at the source. The numbers don’t seem to add up to me but I think I’d need an accountant to explain it.
Rich people telling poor people they can be put in charge of taking care of everyone’s money
Very good video overall, except I don’t think he made it clear initially that there’s a primary residence exception on capital gains tax, so people might be confused that this tax will affect them when it won’t. Similarly, the 1¼ million lifetime small business sale exemption should have been introduced earlier, imho.
Like, the example could have been a $2.6 million small business sale instead, then it would actually compare the old $1 million exemption with the new $1.25 exemption, and the old 50% incision rate with the new 50->66% inclusion rate to get a more accurate “apples-to-apples” comparison.
Napkin math:
Old capital gains tax: about 1 million is exempt, so paying 50% capital gains on remaining 1.6 million is 800K income, at 53% is about 424K tax.
New capital gains tax: 1.25M is exempt, so include 50% capital gains on next 250K, then 66% on the remaining 1.1M. Total capital gains income is 851K. 53% tax on 851K is only $27K more, for $452K, which is a 6.6% increase.
Vs. getting increased services over your entire lifetime from the ultra wealthy paying closer to their fair share? Even a small business owner selling a $2.6MM business comes out way ahead.
Also, do we really want to give doctors a pass for incorporating to shelter their income against income tax for their entire lives then say that’s a problem when they’re asked to pay closer to their actual fair share income tax when they retire? Really?
And we’re worried about people selling their multimillion dollar vacation properties paying more tax?
Anyway, I get the video is trying to be “balanced”, and it’s close, but it’s still biased toward the ultra wealthy.
It’s really, really difficult to get small business owners to see how they personally benefit from social goods. They spend too much time grinding and struggling during the establishment phase. I think it’s something of a traumatizing experience.
Like, trying to get those who primarily sell to working class folks to see how raising the minimum wage actually benefits them, because it means that all of their customers have more money to spend is nigh impossible. All they see is that they’ll have to raise prices, and it makes them even more hostile toward their employees.
And the kicker is, they have no reason to trust in any of the social benefits, because we’ve lived in a society that bas spent the last 45 years dismantling them. And one of our two parties that actually makes government now explicitly runs on destroying social services of every kind.
Like, trying to get those who primarily sell to working class folks to see how raising the minimum wage actually benefits them, because it means that all of their customers have more money to spend is nigh impossible. All they see is that they’ll have to raise prices, and it makes them even more hostile toward their employees.
Yeah this argument never really made sense to me. Unless your product’s only input cost is labour (which I can’t think of a single job that would apply to, let alone close to minimum wage job) your costs should only have to go up by a fraction of the minimum wage increase. This would leave a minimum wage worker/customer better off after buying your product than they would have if it was cheaper.