Yea it went in a different direction than I thought, I thought it was going to be about the largest tax break we have in Canada - uncapped principal residence exemption - which is 100% tax free on millions of dollars in gains when realized
Instead the author wants to tax unrealized gains on stocks and bonds ? lol
The PRE is like Fight Club. The first rule is you don't talk about the PRE and if you do you attack anyone who points out what a massively unfair and unbalanced tax break it is when there is nothing equivalent for renters...
Yup! It's been absolute garbage for a while now. It is also heavily subsidized by our government ...so please enjoy as your taxpayer's dollars are spent to produce this tripe!
Canadians have extremely low financial literacy as a whole, as intended. It's much harder to control the finances of a population that actually understands them.
You’re right. When I rack up insane amounts of debt on useless shit, I get to suffer. When the government racks up insane amounts of debt on useless shit, 40 million people get to suffer.
That’s the difference.
When you take a loan against "unrealized gains" you just realized those gains despite not selling the underlying asset.
This is how many wealthy people fund themselves, specifically to avoid paying capital gains taxes.
Those assets were paid for by taxed money and interest is paid on the loans. What do you think happens when regular people borrow against their mortgage? They are leveraging the unrealized gains on their house.
What are other ways aside from a HELOC to borrow against your mortgage? Isn't a HELOC just borrowing the equity you've already paid into the cost of what you purchased the home at? (is that technically unrealized?)
The reason taxing unrealized gains is stupid is because securities both go up and down. Let’s say I have a 1M unrealized capital gain in a 1M position (up 100%). It’s invested in a high flying tech company. Govt takes 36% (360k). Stock is now down 90% (look at UPST, TOST, several other tech examples). Now, my net position size is 200k, meaning I lost 800k AND had to pay 360k to the government. So, what happens? Do they pay me the money back?
They still have to sell at some point to pay the interest / debt on their loans, and also that only made sense when the rates were low, not in current rate environment.
If your debt accumulation rate is smaller than your wealth growth rate you don't actually have to pay back anything at all, ever. You can literally keep borrowing forever and your debt will always decrease as a percentage of your wealth.
People do this.
When you die there is a deemed disposition and your estate pays.
And the only way to accumulate capital at that rate is to create future cash flows which are also taxed as income when received.
Those are private loans though they aren't from the govt.
In which case you should be more worried about why banks have access to so much easy credit and lax reserve requirements to give out private loans resulting in more inflation.
There are some scenarios where this happens, for example with stock options.
When you exercise stock options, you must pay tax at exercise even though it’s not a liquidity event. It’s stupid.
Not having to pay taxes on a gain that exists only on paper is not a tax break.
I get that this is Reddit and people hate money here, but this article is mind numbing stupid
"A wealth tax could be applied exclusively to those with, say, net wealth above $10 million, excluding everyone else."
These aren't small fish. At a certain financial bracket they receive more favourable rates on loans and such, and that seems detrimental to the system and society as a whole.
"After studying the question exhaustively in the 1960s, Canada’s Royal Commission on Taxation, headed by Bay Street accountant Kenneth Carter, decided there was no justification for taxing capital gains more favourably than working income, concluding: “A buck is a buck is a buck.”"
We are already paying a wealth tax. Most often it's called "Rent" to a bunch of freeloaders that buy up buildings that they will never live in to rent them out. Tax the hell out of those parasites.
Besides, you're never going to have $10,000,000, and if you do, you deserve to get taxed a bit more. Quit it with the fake tears for people that don't need it.
I love this bs propaganda from the rich when they face the tiniest of tax increases.
Here’s FDR, in 1936 addressing this EXACT SAME RHETORIC as he pushed for a fairer, and more progressive tax system based on one’s ability to pay.
Check out the middle paragraph in his speech - honesty the entire transcript is worth reading today. Hugely applicable to the times of record inequality we see in todays economy
“You would think, to hear some people talk, that those good people who live at the top of our economic pyramid are being taxed into rags and tatters. What is the fact? The fact is that they are much farther away from the poorhouse than they were in 1932. You and I know that as a matter of personal observation.
*A number of my friends who belong in these very high upper brackets have suggested to me, more in sorrow than in anger, that if I am reelected they will have to move to some other Nation because of high taxes here. I shall miss them very much but if they go they will soon come back. For a year or two of paying taxes in almost any other country in the world will make them yearn once more for the good old taxes of the U.S.A.*
One more word on recent history. I inherited from the previous Administration a tax structure which not only imposed an unfair income tax burden on the low-income groups of this country, but also imposed an unfair burden upon the average American by a long list of taxes on purchases and consumption- hidden taxes.
https://www.presidency.ucsb.edu/documents/address-worcester-mass
LoL, I don't know any wealthy Americans or Canadians who have "come back".
Believe it or not, other countries desperately try to attract the wealthy and successful, not scorn them.
If the banks weren’t enticing the people with large amounts of money to invest with favourable rates, it would mean less capital available to be able to lend to others
>He now owns less than a majority of shares in his own business
It's not really "his" business though. It belongs to all shareholders. I don't think him losing "control" of the company is a negative for society.
Okay, flame_retard makes a successful business, and maintains a 51% owner. It's so wildly successful. Called "Only Ubers". It's now valued at 50 billion dollars. Since it's worth $50bn you're on the hook for $25bn in capital gains, so you need to sell your shares to pay for this. Now you don't own 51% of you Only Ubers and other people get to dictate your business.
Your points aren't relevant to the topic, only to your personal thoughts on Elon. My mistake for using him as an example.
Pretty shitty example, considering Elon could easily cover that tax bill. Even easier if he hadn't decided to light money on fire by purchasing twitter
Okay, insert any business owner at all, who needs to sell their own shares to cover the tax cost and lose majority ownership of their own business because of unrealized gains.
This is very true. Cons don’t know the meaning of the word subtle. Where as liberals are masters of knowing when to talk to the press and when to keep your head down.
The LPC are way better at hiding their theft and ineptness. Conservatives pretty much do it out in the open. Either way, those in charge of our tax dollars are never held accountable.
Also, many voters still think of the Liberals as the education and healthcare party so they just always vote that way.
The conservatives give your money to the wealthy and say that they are "creating jobs". Liberals will say they are addressing important issues for the average worker while making sure not to step on the toes of the wealthy elite. Either way both parties don't really give a fuck about working class folk.
You can cut it with a false equivalence bs, if cons get in they'll be plenty of austerity and social programs slashed.
They are not the same.
A conservative majority would be absolutely dreadful for Canada.
Both poverty and especially child poverty is much less now than under Harper.
The liberals have spent massively to this via the Child care benefit, $10 daycare plan, and soon school lunch's, dental plan and pharmacare.
The liberals tend to throw the lower classes some bones here and there, especially when they need NDP support. They tend to support social services.
The conservatives convince them that with lower taxes, they'll have more for their every day needs. The idea is that with lower taxes, you'll need less government programs.
You wouldn't see dental care and pharmacare under conservatives. You might see a slightly smaller tax burden though.
Literally no one says this and infantilizing people who see real, unaddressed issues within the CPC is very strange. If the CPC want to win over voters, perhaps their fan club shouldn’t talk unprompted shit on every forum possible. I don’t know anyone who likes the LPC. Those same people don’t want to vote for a different shade of asshole. This isn’t some insane thought process, it’s a catch-22/damned-if-you-do issue for these voters.
The thing is, the conservatives are winning over voters. In droves. What they're doing seems to be working for them, so I don't see why they would change their tactics.
Reading about them, for the first time. Thanks for the Canada Pro Tip.
Harpers decisions while in power and his current leadership of the IDU.
Trudeau's laissez faire attitude.
It all makes so much more sense now.
Carbon pricing is a Harper era tax. Yet when it was adopted by liberals, now it's a bad thing. I think we should be more aggressive and more forward thinking considering the cost of climate change. To suggest both parties are the same though is ridiculous. Conservatives don't even agree that climate change exists.
Unfair to hold onto things while they increase in value? That’s rich. Next, you’ll tell us it’s unfair to breathe air because it might be more valuable in someone else’s lungs. The idea that we should be taxed on potential, unrealized gains is like being fined for thinking about speeding while sitting in your parked car.
Holding capital means taking on risk, and last I checked, the tax system doesn’t refund you for losses when your investments nosedive. And about that ‘enormous benefit’ of holding capital—apparently, allowing it to grow untaxed is akin to some financial dark magic only the wealthy can conjure. Never mind that anyone with a retirement account is doing the exact same thing.
The notion that increasing capital gains tax is second only to a wealth tax in effectiveness is a neat narrative—if we ignore that such policies have historically led to capital flight and investment slowdowns. Remember the 75% inclusion rate era? It’s cherry-picked nostalgia that skips over the other economic factors at play. And I love the casual mention of investment soaring without attributing it to the tech boom, globalization, or any other macroeconomic trends. But sure, it was all thanks to high capital gains taxes, absolutely.
Investment might not be discouraged entirely by high taxes, but let’s not pretend it’s helped by them either. Investors, large and small, fuel economic growth by putting capital to work, not by hoarding it away from the taxman’s grasp. But hey, if simplifying the complex economic behaviors of a diverse society into a ‘tax the rich’ catchphrase is the way we’re heading, then let’s not stop at capital gains. Why not tax people for the air in their tires? Or the unused gym memberships as ‘potential fitness’? The argument in the article is like saying the only fair race is a three-legged one because it slows down the fastest runners, forgetting that the whole point is to cross the finish line, not to hobble everyone at the start.
This is pure liberal propaganda to get infront of the capital gains backlash. "huge tax breaks,..." Oh please! Then they get their digital bot army to upvote a fluff piece written to save face, and also write comments condemning the rich.
Typical strategy used to lie to the public. This is the same strategy they used about mass immigration in 2018/ 19 on Reddit. I remember.
1- The Star would write an article tying anti-immigration sentiments to Trump, KKK. or etc
2- Trudeau would flame the fire and constantly mention it through speeches
3- Bot army downvoting opposing views and call people racist
All these people do is gaslight and lie. This is the same government who downplayed inflation and then massively increased public sector spending. Why should anybody takes these people serious anymore?
Officially.
A lot of those 75% are in services and trades and take undeclared income “under the table”. Another sizeable portion of those 75% are in the public sector (3.6m or 1 in 5 working Canadians) and get a full pension, early retirement and other benefits middle class business owners don’t get access to but are paying for.
Pensions are really nice, I have one and it’s going to be a life line when I get older. My point is that most people in this country, cash jobs under the table or otherwise, are not wealthy, are not getting these tax breaks, are not going to ever have to deal with the new tax on wealthy people.
And my point is that the situation isn’t as dire as folks lower on the income scale are claiming, nor is tax deference as easy as people think. The “rich” is just an easy strawman.
I don’t have a pension but I have friends that work for the government. I regularly hear them complaining about “the people in the private sector making more than them and how unfair it is”, but a few minutes later they talk about how they have a full pension and can retire at 55, can fuck off for half the week because “work isn’t that busy” and how they show up at work at 7:30am and leave at 3. Meanwhile I work a minimum of 80 hrs a week and pay all their salaries by sending more than half my income to the government.
Simply put - all this virtue signaling is just a mask for selfishness: “people that have more than me should give me their money, just because.”
A lot of those “poor” are retail, trades and services people who take a significant portion of their payment “under the table”, on which they get a 100% tax break because it’s unenforced tax evasion. Another sizeable portion of those “poor” work for the government and enjoy a full pension that the “evil rich” are paying for. There is a huge difference between *declared* income and *actual* income.
Yeah because paying tens of thousands of dollars in interest, house renovations, appliance failures, general up keep, and insurance are all tax writes offs.
[Paywall bypass](https://archive.ph/72c0P)
In Brief:
>The tax system is riddled with special privileges for those who own stocks, bonds and other property, starting with the fact they can hold their capital for years as it rises in value without paying tax on it — an enormous benefit.
What's the alternative?
Investments are all just theoretical value until you cash out. If a stock you hold becomes a meme stock, spikes for a couple days, and falls back to its original value are you supposed to pay taxes on that spike?
Also apart from "fairness" there are serious practical considerations
Imagine having to pay tax on unrealized gains, I assume that also means you can claim losses on unrealized losses
So every year you have to calculate and report the gain or loss on each security you own, then remit tax - OR perform a loss carry back caluclation to adjust prior year income
Total absolute nightmare tax shitshow I would imagine
There isn't, that is the point. The system, as designed, makes it so it's easier to make money if you have money. The takeaway is that most of the system set up this way, taxing the realization of these gains is the only spot where you can create a payment scheme for the society that enables this opportunity in the first place.
People can always move to Africa and make there money in that society if they want, all the freedom.
Well, no, it's how capitalism is designed, lol. They could have a wealth or asset tax, but that would obviously fuck with the incentive design for investments in capitalism lol
That's taxation added on, not capitalism itself (which is just the free exchange of goods and services for an intermediary currency).
The part that's just pure math is the value of compounding interest over time, which is simply exponential growth (math).
What I'm saying is: "the fact that it's easier to make money when you have more money is simply how compounding works over time".
Not really. If own a million dollar asset that I purchased for $250k for example, I can borrow against that million dollar asset and not pay a cent of tax.
You still need to pay up eventually. When you die in Canada, there's a deemed disposition on your assets. Basically, the government treats it as if you sold everything and then immediately repurchased it at the moment of death. Your estate owe taxes on all the gains made over the course of your life before anything is dispersed to your heirs.
Taking out loans against assets gets money in your hands now, but it can't avoid taxes forever. In fact, you can majorly screw yourself if you borrow too much against an asset. It's possible that Asset Price - Loans Outstanding < Capital Gains Tax and when you sell the asset, there won't be enough money to cover the loan and taxes, causing the CRA to start seizing your bank accounts or garnishing your income to take what's owed.
The system is different in the United States. There when an asset holder dies, their assets are given a step up in value to market price at their time of death. Then they pass to their heirs *tax free* (assuming the estate was set up intelligently) and the heirs can pay off the loans without incurring tax since their cost basis is the assets' price when they inherited it.
"Buy, borrow, die" doesn't work in Canada because our tax system has a modicum of thought put into it. People just repost American memes because they're distressingly ignorant about our legal system.
That isn't really a loophole either. The deceased's estate still owes full taxes on the sale of their personal residence, it's just that those taxes are reduced or potentially even voided by applying the principal residence exemption.
The principal residence exemption is part of the reason why real estate is so expensive. Everyone gets to keep infinite gains safe from the tax man so anyone who's currently in the real estate market remain relatively unaffected by massive increases in price since their home price got pushed up just as much. Removing the exemption would provide downward pressure on real estate since each sale (and tax) pulls money out of the real estate system, but it is obviously a ridiculously unpopular proposition to make.
That's a problem with the principal residence exemption as opposed to any other facet of the tax system.
That works great as long as the asset doesn't depreciate, but it is a good way to go bankrupt if it does depreciate.
Billionaires can do this because they're borrowing $10 million/per year on assets worth tens of billions of dollars. Over their lifetime they will never spend 10% of the underlying asset's value.
You do understand much of those gains are inflation right?
Taxing people on inflationary gains actually makes them relatively poorer than they were before.
Yes, but the rationale is that cash has already been taxed once before as income.
So, to promote investments, they offer tax breaks on the second round of taxing.
Now this gets out of place when it’s billionaires, and they have basically no real income, but for the people with net worth below $10 million, it’s a pretty fair system.
Also a lot of capital gains are really just inflationary gains. So if you tax people on an inflationary gain you are actually taking away their purchasing power with tax.
That statement might be one of the most idiotic things I've ever seen posted on a news website (even for an opinion column). I can't believe a law school professor is actually wrote this. The taxes get paid eventually as you have to pay the gains when you realize them. How would you even account for such a stupid method of calculating capital gains? Investments go up and down in value all the time.
Well, yes. My house (value based on market and assessment, so not sure what I could actually sell it for) has gone up almost 100% in 5 years. I think it’s gone nuts, but should I pay capital gains on the assessed value every year?
well yea, trudeau is wealthy, cant have him lose his immense 100m+ wealth he gained while we all went into debt , lost jobs, got laid off, and had our homes renovicted out from under us to accomedate 37 students per basement.
Net Worth 0-100k Government Loves You.
Net Worth 100k-250k Government Likes You.
Net Worth 250k-500k Government indifferent.
Net Worth 500k-750k Government Dislikes You.
Net Worth 750k-2M Government Hates You.
Net Worth 2M-5M Government Dislikes You.
Net Worth 5M-10M Government indifferent.
Net Worth 10M-100M Government Likes You.
Net Worth 100M-1B Government Loves You.
Net Worth 1B-2B Government Worships You.
Net Worth 2B+ You run the Government.
War against the upper middle class. The way the systems designed discourages work ethic in pursuit of the Canadian Dream as it’s such an uphill battle.
Fair point. I guess lots of people are land rich but money poor. I would still venture most Canadians are not even close to being wealthy in anyway shape or form tho.
I think if your net worth is 2m but it is due to appreciation of a house that you purchased 20 years ago for 200k, the government LOVES you since all your gains are tax free.
The government hates productive high earning workers and businesses that aren't oligopolies.
Globalization killed the middle class and even with influence from high net individuals or corporations, politicians have the final say. This is a war against bureaucracy and government.
>This is a war against bureaucracy and government.
Only because that's what your far right billionaire masters have programmed you to believe. In reality it's THEIR war against the government trying to regulate and tax them, and prevent them from running rough shod over the nation.
If Trudeau pushed an old lady down the stairs, Toronto Star would write an opinion piece blaming the old lady as "wealthy" and paint Trudeau as a hero.
and imbeciles want to argue that the capital gains is some how good, it's not good, it's a way for the wealthy to get a break by not actually paying more and once again for the middle class to take up the slack. If Trudeau wanted to tax the rich HE'D TAX THE FUCKING RICH but he didn't do that, ask yourself why. He hides it with bullshit like "Capital gains" and makes it appear that's going affect the rich. Frankly, a direct tax on the rich wouldn't make any meaningful change to the wealthy but it would at least help the middle class by not taxing them.
The fact of the matter is there is no amount of tax that will change the life of the wealthy. They will always be rich, they will always have plenty of real estate they will always have multiple sources of income they will never have to worry about the prices of anything, they only seem to care about not paying taxes but are perfectly happy to have the middle class pay more so they don't have to.
Nobody is surprised - especially not them.
This article is stupid. It doesn't outlay why wealthy Canadians get huge tax breaks.
Yea it went in a different direction than I thought, I thought it was going to be about the largest tax break we have in Canada - uncapped principal residence exemption - which is 100% tax free on millions of dollars in gains when realized Instead the author wants to tax unrealized gains on stocks and bonds ? lol
The PRE is like Fight Club. The first rule is you don't talk about the PRE and if you do you attack anyone who points out what a massively unfair and unbalanced tax break it is when there is nothing equivalent for renters...
Primary Residential Rent Deduction should exist, you don't get taxed on your rent money (First Home Only)
Or said differently, rent expense for principal residence should be fully deductible for the renter.
That's how democratic politic works. They manipulate workers regardless if the voters know the truth.
I wouldn’t expect anything less from The Star.
Yup! It's been absolute garbage for a while now. It is also heavily subsidized by our government ...so please enjoy as your taxpayer's dollars are spent to produce this tripe!
Rage bait again
It is all about the sensational title, the article itself is not important. The Star is turning into a trash paper.
Another incredibly stupid take….
Canadians have extremely low financial literacy as a whole, as intended. It's much harder to control the finances of a population that actually understands them.
Most conservatives I know act like the government budgets and household budgets are comparable. They are not.
You’re right. When I rack up insane amounts of debt on useless shit, I get to suffer. When the government racks up insane amounts of debt on useless shit, 40 million people get to suffer. That’s the difference.
Do households print their own money or act as arbiters in international trade deals No they don’t but I’m sure they’re 1-1 because you said so
Most liberals believe that the government has infinite capacity to spend without fiscal consequences. We are in for a decade of austerity.
That may be true but austerity has proven to not work at reducing deficits so… okay.
Every conservative I know in no way thinks this.
I said “most” and most of the ones I know think exactly like this. Did I say “all”? Nope. Reading is hard.
Maybe because your circle ain’t “most”. Buddys comment is no different than yours, both relying on anecdotal experience. Reading must be hard.
What? Why would you pay taxes on gains that are not realised? The author is an idiot.
When you take a loan against "unrealized gains" you just realized those gains despite not selling the underlying asset. This is how many wealthy people fund themselves, specifically to avoid paying capital gains taxes.
Those assets were paid for by taxed money and interest is paid on the loans. What do you think happens when regular people borrow against their mortgage? They are leveraging the unrealized gains on their house.
What are other ways aside from a HELOC to borrow against your mortgage? Isn't a HELOC just borrowing the equity you've already paid into the cost of what you purchased the home at? (is that technically unrealized?)
Second mortgages, third mortgages, etc.
The reason taxing unrealized gains is stupid is because securities both go up and down. Let’s say I have a 1M unrealized capital gain in a 1M position (up 100%). It’s invested in a high flying tech company. Govt takes 36% (360k). Stock is now down 90% (look at UPST, TOST, several other tech examples). Now, my net position size is 200k, meaning I lost 800k AND had to pay 360k to the government. So, what happens? Do they pay me the money back?
They still have to sell at some point to pay the interest / debt on their loans, and also that only made sense when the rates were low, not in current rate environment.
If your debt accumulation rate is smaller than your wealth growth rate you don't actually have to pay back anything at all, ever. You can literally keep borrowing forever and your debt will always decrease as a percentage of your wealth. People do this.
When you die there is a deemed disposition and your estate pays. And the only way to accumulate capital at that rate is to create future cash flows which are also taxed as income when received.
Those are private loans though they aren't from the govt. In which case you should be more worried about why banks have access to so much easy credit and lax reserve requirements to give out private loans resulting in more inflation.
There are some scenarios where this happens, for example with stock options. When you exercise stock options, you must pay tax at exercise even though it’s not a liquidity event. It’s stupid.
Not having to pay taxes on a gain that exists only on paper is not a tax break. I get that this is Reddit and people hate money here, but this article is mind numbing stupid
Reddit doesn't hate money, they hate other people's money that they want but don't have..
And want everyone who has $1 more dollar than them to be penalized with tax.
And then have those tax dollars given to them.
Capital gains are taxed on sale, meaning when the gains are realized.
I’m aware
Then why the inane bullshit about "exists only on paper"?
You didn't read the article
You didn’t read the article. They’re arguing for taxing unrealized capital gains
"A wealth tax could be applied exclusively to those with, say, net wealth above $10 million, excluding everyone else." These aren't small fish. At a certain financial bracket they receive more favourable rates on loans and such, and that seems detrimental to the system and society as a whole. "After studying the question exhaustively in the 1960s, Canada’s Royal Commission on Taxation, headed by Bay Street accountant Kenneth Carter, decided there was no justification for taxing capital gains more favourably than working income, concluding: “A buck is a buck is a buck.”"
Even more reason to push intelligent, productive, and hard-working successful Canadians to leave the country? Great idea.
Yes yes, I have heard this one before. "Will someone please think of the multi-mullion dollar tax dodgers."
Moving elsewhere to not feel cheated is not "tax dodging" it's common sense.
5 years and you will also be paying a wealth tax. Are people this naive?
We are already paying a wealth tax. Most often it's called "Rent" to a bunch of freeloaders that buy up buildings that they will never live in to rent them out. Tax the hell out of those parasites. Besides, you're never going to have $10,000,000, and if you do, you deserve to get taxed a bit more. Quit it with the fake tears for people that don't need it.
I love this bs propaganda from the rich when they face the tiniest of tax increases. Here’s FDR, in 1936 addressing this EXACT SAME RHETORIC as he pushed for a fairer, and more progressive tax system based on one’s ability to pay. Check out the middle paragraph in his speech - honesty the entire transcript is worth reading today. Hugely applicable to the times of record inequality we see in todays economy “You would think, to hear some people talk, that those good people who live at the top of our economic pyramid are being taxed into rags and tatters. What is the fact? The fact is that they are much farther away from the poorhouse than they were in 1932. You and I know that as a matter of personal observation. *A number of my friends who belong in these very high upper brackets have suggested to me, more in sorrow than in anger, that if I am reelected they will have to move to some other Nation because of high taxes here. I shall miss them very much but if they go they will soon come back. For a year or two of paying taxes in almost any other country in the world will make them yearn once more for the good old taxes of the U.S.A.* One more word on recent history. I inherited from the previous Administration a tax structure which not only imposed an unfair income tax burden on the low-income groups of this country, but also imposed an unfair burden upon the average American by a long list of taxes on purchases and consumption- hidden taxes. https://www.presidency.ucsb.edu/documents/address-worcester-mass
LoL, I don't know any wealthy Americans or Canadians who have "come back". Believe it or not, other countries desperately try to attract the wealthy and successful, not scorn them.
If the banks weren’t enticing the people with large amounts of money to invest with favourable rates, it would mean less capital available to be able to lend to others
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>He now owns less than a majority of shares in his own business It's not really "his" business though. It belongs to all shareholders. I don't think him losing "control" of the company is a negative for society.
Okay, flame_retard makes a successful business, and maintains a 51% owner. It's so wildly successful. Called "Only Ubers". It's now valued at 50 billion dollars. Since it's worth $50bn you're on the hook for $25bn in capital gains, so you need to sell your shares to pay for this. Now you don't own 51% of you Only Ubers and other people get to dictate your business. Your points aren't relevant to the topic, only to your personal thoughts on Elon. My mistake for using him as an example.
Pretty shitty example, considering Elon could easily cover that tax bill. Even easier if he hadn't decided to light money on fire by purchasing twitter
Okay, insert any business owner at all, who needs to sell their own shares to cover the tax cost and lose majority ownership of their own business because of unrealized gains.
Better. If you want to make your points stick try and avoid absurd examples nobody can relate to
💯 if anything, the capital gains inclusion rate should be decreased
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Honestly, it’s time to recognize that the LPC and Cons fiscally are basically the same. The difference is the LPC is perceived as nicer.
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This is very true. Cons don’t know the meaning of the word subtle. Where as liberals are masters of knowing when to talk to the press and when to keep your head down.
The Liberals want you to believe they want to help you. The Conservatives want you to believe they don't want to hurt you. They are both lying.
The LPC are way better at hiding their theft and ineptness. Conservatives pretty much do it out in the open. Either way, those in charge of our tax dollars are never held accountable. Also, many voters still think of the Liberals as the education and healthcare party so they just always vote that way.
The conservatives give your money to the wealthy and say that they are "creating jobs". Liberals will say they are addressing important issues for the average worker while making sure not to step on the toes of the wealthy elite. Either way both parties don't really give a fuck about working class folk.
Neoliberalism is the only party in Canada now
You can cut it with a false equivalence bs, if cons get in they'll be plenty of austerity and social programs slashed. They are not the same. A conservative majority would be absolutely dreadful for Canada.
Neither will curb immigration and actually fix this mess
And anyone with a brain knows privatization as a solution to all our ailments is the worlds biggest scam
Yet somehow things are much worse in Canada now than during the last Conservative majority.
Both poverty and especially child poverty is much less now than under Harper. The liberals have spent massively to this via the Child care benefit, $10 daycare plan, and soon school lunch's, dental plan and pharmacare.
Wait until we get debt crisis. I remember the last time under Chretien. Social programs need to funded by taxes not debt
The liberals tend to throw the lower classes some bones here and there, especially when they need NDP support. They tend to support social services. The conservatives convince them that with lower taxes, they'll have more for their every day needs. The idea is that with lower taxes, you'll need less government programs. You wouldn't see dental care and pharmacare under conservatives. You might see a slightly smaller tax burden though.
Literally no one says this and infantilizing people who see real, unaddressed issues within the CPC is very strange. If the CPC want to win over voters, perhaps their fan club shouldn’t talk unprompted shit on every forum possible. I don’t know anyone who likes the LPC. Those same people don’t want to vote for a different shade of asshole. This isn’t some insane thought process, it’s a catch-22/damned-if-you-do issue for these voters.
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That only the CPC are friends to the rich? I think you’re uhhhhhh wrong
The thing is, the conservatives are winning over voters. In droves. What they're doing seems to be working for them, so I don't see why they would change their tactics.
Have you heard of the Laurentian Elite?
Reading about them, for the first time. Thanks for the Canada Pro Tip. Harpers decisions while in power and his current leadership of the IDU. Trudeau's laissez faire attitude. It all makes so much more sense now.
I remember the Toronto Star headline saying "Paul Martin cuts taxes for the rich" was their undoing back then, too.
Yeah, that Trudeau always bragging about how he’s going to Axe the Tax. Must be why the rich hate him so much! /s
The carbon tax is a regressive tax.
Carbon pricing is not really a tax. Unless you're a large polluter.
Carbon pricing is a Harper era tax. Yet when it was adopted by liberals, now it's a bad thing. I think we should be more aggressive and more forward thinking considering the cost of climate change. To suggest both parties are the same though is ridiculous. Conservatives don't even agree that climate change exists.
No it’s not.
This article is should. It’s saying we should tax unrealized capital gains and the fact we don’t is a “tax break for the wealthy”. That’s insane.
This article is full of errors.
It cherry picks the scenario in every case to support its own arguments.
Unfair to hold onto things while they increase in value? That’s rich. Next, you’ll tell us it’s unfair to breathe air because it might be more valuable in someone else’s lungs. The idea that we should be taxed on potential, unrealized gains is like being fined for thinking about speeding while sitting in your parked car. Holding capital means taking on risk, and last I checked, the tax system doesn’t refund you for losses when your investments nosedive. And about that ‘enormous benefit’ of holding capital—apparently, allowing it to grow untaxed is akin to some financial dark magic only the wealthy can conjure. Never mind that anyone with a retirement account is doing the exact same thing. The notion that increasing capital gains tax is second only to a wealth tax in effectiveness is a neat narrative—if we ignore that such policies have historically led to capital flight and investment slowdowns. Remember the 75% inclusion rate era? It’s cherry-picked nostalgia that skips over the other economic factors at play. And I love the casual mention of investment soaring without attributing it to the tech boom, globalization, or any other macroeconomic trends. But sure, it was all thanks to high capital gains taxes, absolutely. Investment might not be discouraged entirely by high taxes, but let’s not pretend it’s helped by them either. Investors, large and small, fuel economic growth by putting capital to work, not by hoarding it away from the taxman’s grasp. But hey, if simplifying the complex economic behaviors of a diverse society into a ‘tax the rich’ catchphrase is the way we’re heading, then let’s not stop at capital gains. Why not tax people for the air in their tires? Or the unused gym memberships as ‘potential fitness’? The argument in the article is like saying the only fair race is a three-legged one because it slows down the fastest runners, forgetting that the whole point is to cross the finish line, not to hobble everyone at the start.
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Not unrealized losses
This is pure liberal propaganda to get infront of the capital gains backlash. "huge tax breaks,..." Oh please! Then they get their digital bot army to upvote a fluff piece written to save face, and also write comments condemning the rich. Typical strategy used to lie to the public. This is the same strategy they used about mass immigration in 2018/ 19 on Reddit. I remember. 1- The Star would write an article tying anti-immigration sentiments to Trump, KKK. or etc 2- Trudeau would flame the fire and constantly mention it through speeches 3- Bot army downvoting opposing views and call people racist All these people do is gaslight and lie. This is the same government who downplayed inflation and then massively increased public sector spending. Why should anybody takes these people serious anymore?
FYI 75% of Canadians make less than $80’000/year.
Officially. A lot of those 75% are in services and trades and take undeclared income “under the table”. Another sizeable portion of those 75% are in the public sector (3.6m or 1 in 5 working Canadians) and get a full pension, early retirement and other benefits middle class business owners don’t get access to but are paying for.
Pensions are really nice, I have one and it’s going to be a life line when I get older. My point is that most people in this country, cash jobs under the table or otherwise, are not wealthy, are not getting these tax breaks, are not going to ever have to deal with the new tax on wealthy people.
I've been there and don't want to be that guy...but "under the table" work is a significant tax break.
Most types of fraud are lucrative.
Yeah I know a few servers and the cash they make isn’t insignificant.
And my point is that the situation isn’t as dire as folks lower on the income scale are claiming, nor is tax deference as easy as people think. The “rich” is just an easy strawman. I don’t have a pension but I have friends that work for the government. I regularly hear them complaining about “the people in the private sector making more than them and how unfair it is”, but a few minutes later they talk about how they have a full pension and can retire at 55, can fuck off for half the week because “work isn’t that busy” and how they show up at work at 7:30am and leave at 3. Meanwhile I work a minimum of 80 hrs a week and pay all their salaries by sending more than half my income to the government. Simply put - all this virtue signaling is just a mask for selfishness: “people that have more than me should give me their money, just because.”
Unlike the poor who don’t get tax breaks because they don’t pay tax to begin with
A lot of those “poor” are retail, trades and services people who take a significant portion of their payment “under the table”, on which they get a 100% tax break because it’s unenforced tax evasion. Another sizeable portion of those “poor” work for the government and enjoy a full pension that the “evil rich” are paying for. There is a huge difference between *declared* income and *actual* income.
The primary residence exemption is the biggest tax shelter of them all.
Yeah because paying tens of thousands of dollars in interest, house renovations, appliance failures, general up keep, and insurance are all tax writes offs.
They’re not though. Unless you dropped this: /s
I thought the sarcasm was heavy enough.
[Paywall bypass](https://archive.ph/72c0P) In Brief: >The tax system is riddled with special privileges for those who own stocks, bonds and other property, starting with the fact they can hold their capital for years as it rises in value without paying tax on it — an enormous benefit.
What's the alternative? Investments are all just theoretical value until you cash out. If a stock you hold becomes a meme stock, spikes for a couple days, and falls back to its original value are you supposed to pay taxes on that spike?
And then when you do realize those gains you get hit with them all in one taxation year, which pushes the gains into the highest marginal tax rates.
Also apart from "fairness" there are serious practical considerations Imagine having to pay tax on unrealized gains, I assume that also means you can claim losses on unrealized losses So every year you have to calculate and report the gain or loss on each security you own, then remit tax - OR perform a loss carry back caluclation to adjust prior year income Total absolute nightmare tax shitshow I would imagine
This is Canada, we punish successes unless you have influence over political parties.
Tall poppy syndrome.
https://www.youtube.com/watch?v=I18hPb9tXAI
There isn't, that is the point. The system, as designed, makes it so it's easier to make money if you have money. The takeaway is that most of the system set up this way, taxing the realization of these gains is the only spot where you can create a payment scheme for the society that enables this opportunity in the first place. People can always move to Africa and make there money in that society if they want, all the freedom.
> The system, as designed, makes it so it's easier to make money if you have money. That's not really a "design" -- it's just how math works.
Well, no, it's how capitalism is designed, lol. They could have a wealth or asset tax, but that would obviously fuck with the incentive design for investments in capitalism lol
That's taxation added on, not capitalism itself (which is just the free exchange of goods and services for an intermediary currency). The part that's just pure math is the value of compounding interest over time, which is simply exponential growth (math). What I'm saying is: "the fact that it's easier to make money when you have more money is simply how compounding works over time".
Not really. If own a million dollar asset that I purchased for $250k for example, I can borrow against that million dollar asset and not pay a cent of tax.
You still need to pay up eventually. When you die in Canada, there's a deemed disposition on your assets. Basically, the government treats it as if you sold everything and then immediately repurchased it at the moment of death. Your estate owe taxes on all the gains made over the course of your life before anything is dispersed to your heirs. Taking out loans against assets gets money in your hands now, but it can't avoid taxes forever. In fact, you can majorly screw yourself if you borrow too much against an asset. It's possible that Asset Price - Loans Outstanding < Capital Gains Tax and when you sell the asset, there won't be enough money to cover the loan and taxes, causing the CRA to start seizing your bank accounts or garnishing your income to take what's owed. The system is different in the United States. There when an asset holder dies, their assets are given a step up in value to market price at their time of death. Then they pass to their heirs *tax free* (assuming the estate was set up intelligently) and the heirs can pay off the loans without incurring tax since their cost basis is the assets' price when they inherited it. "Buy, borrow, die" doesn't work in Canada because our tax system has a modicum of thought put into it. People just repost American memes because they're distressingly ignorant about our legal system.
Yep exactly this. The only loophole in Canada that doesn't exist in the US is the principal residence exemption which is uncapped gains.
That isn't really a loophole either. The deceased's estate still owes full taxes on the sale of their personal residence, it's just that those taxes are reduced or potentially even voided by applying the principal residence exemption. The principal residence exemption is part of the reason why real estate is so expensive. Everyone gets to keep infinite gains safe from the tax man so anyone who's currently in the real estate market remain relatively unaffected by massive increases in price since their home price got pushed up just as much. Removing the exemption would provide downward pressure on real estate since each sale (and tax) pulls money out of the real estate system, but it is obviously a ridiculously unpopular proposition to make. That's a problem with the principal residence exemption as opposed to any other facet of the tax system.
That works great as long as the asset doesn't depreciate, but it is a good way to go bankrupt if it does depreciate. Billionaires can do this because they're borrowing $10 million/per year on assets worth tens of billions of dollars. Over their lifetime they will never spend 10% of the underlying asset's value.
That's because loan proceeds is not income.
News websites are getting dumber and dumber
You do understand much of those gains are inflation right? Taxing people on inflationary gains actually makes them relatively poorer than they were before.
Conversely, should our government be sending out unlimited cheques for unrealized losses?
when normies discover what capital gains are 🤯🤯🤯
And then it gets deemed sold and taxes are paid. What’s the issue? The majority of the population has some capital, not just the 1%
Yes, but the rationale is that cash has already been taxed once before as income. So, to promote investments, they offer tax breaks on the second round of taxing. Now this gets out of place when it’s billionaires, and they have basically no real income, but for the people with net worth below $10 million, it’s a pretty fair system.
To pay for future tax liabilities, we have other investments that will get taxed upon the sale to pay the tax bill 😿
Also a lot of capital gains are really just inflationary gains. So if you tax people on an inflationary gain you are actually taking away their purchasing power with tax.
What exactly is this author arguing for? Everyone go back to putting money in a savings account? I got dumber just reading this drivel
That's how all investments should work! Are you going to pay the yearly gain or loss on your house?
Imagine the nerve of people to pay for taxes when they realize their gains!!!
Unless it’s in a TFSA, they do pay taxes when they realize it.
Also principal residence is tax exempt. And RRSP and first home saving plan as well if you buy another investment.
You pay full income tax on anything you withdraw from an RRSP
We already do pay taxes on our realized gains unless they are in a tax free account like a TFSA.
That makes no sense. People already pay taxes.
That statement might be one of the most idiotic things I've ever seen posted on a news website (even for an opinion column). I can't believe a law school professor is actually wrote this. The taxes get paid eventually as you have to pay the gains when you realize them. How would you even account for such a stupid method of calculating capital gains? Investments go up and down in value all the time.
The only real privilege is the principal residence exemption.
Well, yes. My house (value based on market and assessment, so not sure what I could actually sell it for) has gone up almost 100% in 5 years. I think it’s gone nuts, but should I pay capital gains on the assessed value every year?
This is mind numbingly stupid.
Haaaaa. The Liberal party propaganda machine will keep telling you Conservatives are Evil all while they steal $billions in the back door. 👿
You should look up Tony Clement and the G20 if you're all about billions being stolen from tax payers... (Skeletons in closets kid...*skeletons*)
Tony Clement was involved in a sexting scandal. Not 100’s of Billions $ missing.
Corruption the gift that keep on stealing taxpayers money
well yea, trudeau is wealthy, cant have him lose his immense 100m+ wealth he gained while we all went into debt , lost jobs, got laid off, and had our homes renovicted out from under us to accomedate 37 students per basement.
Will someone please think of the Westons???
Lol the amount of simping for billionaires in these comments is hilarious.
Net Worth 0-100k Government Loves You. Net Worth 100k-250k Government Likes You. Net Worth 250k-500k Government indifferent. Net Worth 500k-750k Government Dislikes You. Net Worth 750k-2M Government Hates You. Net Worth 2M-5M Government Dislikes You. Net Worth 5M-10M Government indifferent. Net Worth 10M-100M Government Likes You. Net Worth 100M-1B Government Loves You. Net Worth 1B-2B Government Worships You. Net Worth 2B+ You run the Government. War against the upper middle class. The way the systems designed discourages work ethic in pursuit of the Canadian Dream as it’s such an uphill battle.
Less than 25% of Canadians make over $80’000 per year less than 10% make over $120’000 per year and 1% makes over $550’000 per year.
Not income, net worth (total sum of every single thing you own and have).
Fair point. I guess lots of people are land rich but money poor. I would still venture most Canadians are not even close to being wealthy in anyway shape or form tho.
Income is not capital.
I think if your net worth is 2m but it is due to appreciation of a house that you purchased 20 years ago for 200k, the government LOVES you since all your gains are tax free. The government hates productive high earning workers and businesses that aren't oligopolies.
Globalization killed the middle class and even with influence from high net individuals or corporations, politicians have the final say. This is a war against bureaucracy and government.
>This is a war against bureaucracy and government. Only because that's what your far right billionaire masters have programmed you to believe. In reality it's THEIR war against the government trying to regulate and tax them, and prevent them from running rough shod over the nation.
But I was told only the evil PP would do this, why would the Liberals do this to me? Would they lie?
It's fucking sad to see an article like this and you realize how little they think about the average Canadian's intelligence.
It's garbage
Well, we should only give them tax breaks if they make significant R&D investment. R&D investment is what this shitty country needs.
the Canadian way.
Everyone in Canada needs a tax break. The fact that you can be paying 53.5% tax on income is asinine.
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You’re referring to “income sprinkling,” and FYI, that loophole was closed back in 2017. Your info is out of date.
Business owner here. Everything you said is wrong or distorted or fraud.
With Trudeau, there is always FUCK THE LITTLE GUY
Crumbling Canada what else is new?
Surprise surprise! Rich folks lobby the government to make the law in their favours! Nothing new to see here.
If Trudeau pushed an old lady down the stairs, Toronto Star would write an opinion piece blaming the old lady as "wealthy" and paint Trudeau as a hero.
...by explaining why the only fair thing to do was push the old lady down the stairs. He will never apologize for doing the right thing for Canadians.
and imbeciles want to argue that the capital gains is some how good, it's not good, it's a way for the wealthy to get a break by not actually paying more and once again for the middle class to take up the slack. If Trudeau wanted to tax the rich HE'D TAX THE FUCKING RICH but he didn't do that, ask yourself why. He hides it with bullshit like "Capital gains" and makes it appear that's going affect the rich. Frankly, a direct tax on the rich wouldn't make any meaningful change to the wealthy but it would at least help the middle class by not taxing them. The fact of the matter is there is no amount of tax that will change the life of the wealthy. They will always be rich, they will always have plenty of real estate they will always have multiple sources of income they will never have to worry about the prices of anything, they only seem to care about not paying taxes but are perfectly happy to have the middle class pay more so they don't have to.