• Beaver @lemmy.ca
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    1 month ago

    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.

    • BedSharkPal@lemmy.ca
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      1 month ago

      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?

      • k_rol@lemmy.ca
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        1 month ago

        Hopefully this video will resonate with some people. It’s really well explained.

  • IninewCrow@lemmy.ca
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    1 month ago

    Rich people telling poor people they can be put in charge of taking care of everyone’s money

      • blindsight@beehaw.org
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        1 month ago

        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.

        • Kelsenellenelvial@lemmy.ca
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          29 days ago

          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.

        • m0darn@lemmy.ca
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          1 month ago

          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.

          • Someone@lemmy.ca
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            26 days ago

            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.

          • Kelsenellenelvial@lemmy.ca
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            29 days ago

            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.

            • m0darn@lemmy.ca
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              29 days ago

              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.

  • blindsight@beehaw.org
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    1 month ago

    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.

    • Kichae@lemmy.ca
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      1 month ago

      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.

      • Someone@lemmy.ca
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        26 days ago

        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.

  • SamuelRJankis@lemmy.world
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    1 month ago

    Given the backstory behind why doctors structured their assets that way I think it’s fair and also just makes a lot of the stupid talking points go away to give them a exemption. In itself I believe they should have just switched investment properties to income tax which would be a lot more politically digestible although Trudeau commented why he won’t do that a few weeks ago.

  • Bye@lemmy.world
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    1 month ago

    USA neighbor here,

    66% is insane, like if I saved up $500k to retire, I’d like to be selling some every year, like 5% (actually a little more but this is for easy numbers). That would get me $25,000 per year, then I’d pay capital gains tax on that and have about $20k left over. A modest retirement, could move to somewhere inexpensive and retire on that.

    A 60% capital gains tax means I would have to save 1.5 million dollars to achieve that same retirement.

    • Burstar@lemmy.dbzer0.comOP
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      1 month ago

      First, the bump to 66% only happens after 250k that year so $25k would not trigger the extra 16% eligibility. So standard 50% CG only would be applied. $12.5k taxed at your rate means the min rate which may be something like 20% (this number is a wild guess) so say $2500 paid to the gov. Not as bad as it sounds.

      • ryper@lemmy.ca
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        1 month ago

        Don’t forget that the $25k wouldn’t all be gains in the first place. If the investment had increased in value by 25%, it would be 20k base and only 5k gains; if it had increased by 100% it would be an even split. We’re talking about taxing a part of a part of the sale value.

        • MacroCyclo@lemmy.ca
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          1 month ago

          Once you get this far down the thread you realize how complicated it actually is and why most people have no sweet clue how it works.

      • Bye@lemmy.world
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        1 month ago

        Thanks for the info, that makes perfect sense. Seems like a good idea to tax people making tons and tons of money at a high rate then!

        • Burstar@lemmy.dbzer0.comOP
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          1 month ago

          IF it was forced to be in the 66% CG bracket $16.5k would be taxed at the previously posited 20% resulting in $3300 paid to government so it is a respectable jump in tax owed for those being subjected to it.

      • Burstar@lemmy.dbzer0.comOP
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        1 month ago

        A better way to think of it is <$250k 50% of the profit is tax-free. >$250k only 34% of it is tax exempt.

    • brlemworld@lemmy.world
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      1 month ago

      No, if you saved up $500k you would pay $0 in taxes because that’s not capital gains. If you happened to hit the jackpot and win on the stock market with your investments bets to the tune of $500k in gains, then you would pay $333k in taxes from your stock market lottery winnings.

      • Yardy Sardley@lemmy.ca
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        1 month ago

        No, you would not pay $333k in taxes. You would add $333k to your taxable income for the year, and then pay regular tax rates on your total income.

        If you made $500k in capital gains and had no other income that year, then by extremely rough estimation (I’m too lazy to pull out a calculator to get the exact figure) you would only be paying somewhere in the ballpark of $60k in federal taxes, then another $20k-$30k based on what province you live in. All things considered, that’s like a 17% effective rate, which is too damn low if you ask me.

        And that’s only on amounts greater than $250k. So anyone this change actually affects is going to be fine. The people complaining about it are straight up lying.

        • Kelsenellenelvial@lemmy.ca
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          28 days ago

          There’s also methods to potentially shelter some of that too. If a person has RRSP room and doesn’t actually need the whole amount available you can use that to delay paying the tax and hopefully reduce the rate paid. You can also make some investments within a TFSA, which means no taxes owed on the growth. Both of those options have caps on contributions so they’re a great for low-moderate income earners to minimize their taxes, while higher income earners can only shelter a portion of their income.

      • Bye@lemmy.world
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        1 month ago

        If you save money for retirement you’re ideally selling gains off of that money. Like you have 500k invested in something safe like bonds, it’s making maybe 5% a year, so you live off of that 5% in early retirement and a bit more than that in late retirement. Then you have money leftover when you die, so your heirs can have it.

    • ramjambamalam@lemmy.ca
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      30 days ago

      Do you realize that 67% does not refer to the tax rate, but rather the amount of capital gains that are taxed as income? Meaning that the remaining 33% are always completely tax free?

      Example: you sell an investment property for $2,000,000 which you had previously bought for $1,000,000. Your annual salary is $75,000.

      In this example, of the $1,000,000 capital gain, 50% of the first $250,000 ($125k) is taxable and 67% of the remaining $750,000 ($500k) is taxable. So, add $625k to your salaried income of $75k and your total taxable income is $700,000.

      The total income tax you would pay after the proposed increase (assuming you live in Ontario) is $342,103, which is $320,405 more than you would have normally paid on your salary of $75,000. Therefore, your effective tax rate on the $1M capital gain is roughly 32%, not the 60% you mentioned in your comment.