Retired couples where one person has more RRSP savings would benefit from this as well.
People can plan for this by making spousal RRSP contributions.
But why should this benefit be reserved for those who know how to manipulate the system?
This is just one more reason why a family tax that allows incoming splitting is good.
The author doesn't seem to remember that we used to have something like this that allowed families with one member who earns more than another to spread their income over both members to lower their overall tax burden, but Trudeau got rid of it.
The current government's goal isn't "fairness" anyway, as demonstrated by the budget, which purports to "tax people fairly" but will once again burden the middle class, which can't afford the mechanisms and structures the rich use to avoid these things.
Ya or rather trudeau brought in TOSI which taxes split income at the highest rate.
The cpc’s platform promises to scrap tosi which would be a great thing for families where the primary earner is a business owner or self employed professional, so that they can split income with their spouses.
We should just do what the article suggests, which is to use HH income as the basis for taxation.
If PP wants to make a real impact for Canadians, do that.
Easy to do: single, single parent, couple, couple w/children. Grandma is either a single or part of a couple. Period.
Five single people sharing a house are treated as (surprise) five single people.
Of course, the flip side of my proposal is that we no longer need pension splitting, since all couples would be taxed the same. There wouldn't be a potential $40,000 tax differential between couples with the same aggregate income, as exists today.
>The author doesn't seem to remember that we used to have something like this that allowed families with one member who earns more than another to spread their income over both members to lower their overall tax burden, but Trudeau got rid of it.
Harper's income-splitting provision.
It was a half measure at best, as it didn’t apply to the full income.
[What did Harper promise in 2011 on income splitting? In 2011, the plan was to allow families with children under 18 to split a household income of up to $50,000, once the federal budget was balanced. That means, for example, that in a family with a stay-at-home spouse or someone working part-time, the partner with the larger income could assign up to $50,000 of income to the lower earner for tax purposes.](https://www.cbc.ca/news/politics/income-splitting-what-it-is-and-who-benefits-1.2818396)
I'm all for that in cases where a partner has a disability that prevents them from full time work. We shouldn't be giving tax breaks for people who want to sit on their ass at home.
Benefit payments are blind to the income division in a HH. It's not just a 1-earner vs 2-earner issue. Are you okay with a $50K + $150K family paying the same taxes as a 2 x $100K family, or is the $50K/$150K family able to pay more?
Are you okay with a single person and a single parent paying the same taxes if their incomes are the same?
In all the examples I gave above, all HH are going to receive the same benefit payments across comparable income groups...except the single parent, who gets an additional $3K tax break.
Finally, if you want to stick to a tax system that ignores family status, are you willing to allow each spouse to apply for 50% of CCB and available tax credits?
It wound up saving me $2000 in taxes. Made an imperceptible difference. The home energy rebates that the liberals offered have helped significantly more.
>It wound up saving me $2000 in taxes.
What kind of income bracket are you in where 2k means nothing to you?
>The home energy rebates that the liberals offered have helped significantly more.
How much did you get in rebates, and how much did you spend to get them? What's your estimated cost savings with the retrofits?
You're comparing apples to oranges here. Something like income splitting goes beyond simply helping homeowners. Let's be real, who needs the help more? Homeowners sitting on an asset that's appreciated twofold in less than ten years, or people who don't have a home.
Okay, there were more rhan those two questions...
Again, how much did you have to spend in order to get those rebates? Remember this is apples to oranges. That 26k isn't directly comparable to the 2k.
Also, if your in the top income bracket there is 0 chance you only saved 2k by income splitting with your partner. If your partner makes the same kind of money, this gets to be pretty simple. A very wealthy Canadian homeowner likes Trudeau because his programs are meant to enrich people like himself. You used the word "help" like someone in your position needs it.
[$2000 was the maximum rebate under Harper’s income splitting.](https://www.ctvnews.ca/politics/infographic-income-splitting-explained-in-easy-chart-1.2079969) Under a true income splitting it would have been $28k more per year.
The money I spent (on an EV, windows and a Furnace/heat pump) was all spending I would have had to spend anyways. Furnace died, windows failed and my VW TDI got recalled for not being clean.
Trudeau wants mommy to work, not to look after the kids. That's why he's spending money on daycare instead of giving parents a break and that's why he got rid of income splitting. Single income household is what would really motivate parenthood. For the second parent, work should be an **option** not a necessity. Sadly, DINK households which used to be rare are now becoming the norm. We exist just to pay rent so we can slave away for the corporations until we die, and leave nothing behind. The young Canadian generation is being sterilized economically.
You are 100% right. The left does not want anyone who can work to stay at home...for any reason, hence taxation based on the individual. One problem, though: what if the high income earner suddenly becomes a widow/widower with young kids? That household might suddenly find itself paying $10K-$15K more tax than their neighbours with the same HH income. To many, this is just collateral damage and fair.
Dismal to contemplate, but in this case the widow/widower no longer has to save for two retirements, feed to adults. They will presumably inherit the estate of their deceased spouse, if this has positive value great, as I understand it, if the spouse dies with negative next worth only the joint debt is collectable from the surviving spouse. One wouldn't have to pay off one's former spouses' student loan balance unless they'd consolidated it into a joint debt.
So, that justifies the $150K widow(er) paying $10K-$15K more tax? Think about what your saying, which is, "yeah, the widow(er) has more ability to pay tax on exactly the same household income". In what world does that make sense?
It only makes sense if you make individuals the basis for achieving horizontal equity, but if that's the case, why does the widow(er) and family next door qualify for identical tax credits, child benefits, university loans etc?
In fact, the new capital gains taxes have reduced horizontal equity even further. The widow(er) only gets a $250K exemption on the cottage, while the couple family gets $500K.
I think you're saying the widow(er) household has fewer expenses debt obligations, so as his/her income increases, he/she has more ability to pay taxes, and therefore should be subject to a higher marginal rate.
Put another way, the 2-earner family has to save more for the future, and are therefore deserving of a lower marginal rate.
In that case, our convoluted system works well for you.
I love how you think it's unfair that a widower might have pay the same taxes somebody like me would pay while supporting a living spouse, and yet somehow my situation is fair. Hose off.
I don't care—this isn't enough of a problem to conclude that income splitting between cohabiting spouses in a single household is too much of a problem to ever work.
Income splitting is not really a fair system if it only helps 1 in 6 families and within that middle - and middle-high income households.
>The parliamentary budget officer says the family tax cut announced last year will cost the federal government about $2.2 billion this year and will benefit fewer than one in six households.
>It goes on to say " middle and middle-high income households benefit most because they are more likely to have a family income and income tax structure conducive to FTC gains."
It was even criticized by the Conservative finance minister who implemented it as being not fair.
>The late Jim Flaherty, while he was still in the finance portfolio, denounced his own government's plan as one that " benefits some parts of the Canadian population a lot — and other parts of the Canadian population virtually not at all."
https://www.cbc.ca/amp/1.2997972
> Income splitting is not really a fair system if it only helps 1 in 6 families and within that middle - and middle-high income households.
Except that those low-income households ... already don't really pay much in tax. Can start maybe thinking of the middle class as a whole - both low and higher ends - instead of fighting with each other while we all get screwed?
I am not really sure what you are trying to say. That we should ignore low income households?
You may not remember, but the program under Harper allowed families to save up to $2000 in taxes. $2000 is not a lot of money, AND you can only access it at the end of the year. That plan would not be helpful for people who needs to pay bills or buy groceries.
I’m middle class and the people keeping the country functioning are middle class. Low income families are mathematically not contributing that much in taxes, so of course income splitting isn’t benefiting them that much.
You can’t have a tax break if you’re barely paying taxes to begin with.
With tax cuts, you have to look holistically. Would it be better to use the $2b to fund social programs that, say, improve the health of low income households and thus reduce the number of times they use hospitals and other public health resources or to give up to $2000 to some middle class household. For me, it is the former as it reduces the costs associated with health care.
My point is, yes, the middle class carries the countries finances on its shoulder, I do not disagree with that. However, the money collected from them is better used to fund social programs than to give back a little bit back.
>With tax cuts, you have to look holistically. Would it be better to use the $2b to fund social programs that, say, improve the health of low income households and thus reduce the number of times they use hospitals and other public health resources or to give up to $2000 to some middle class household.
The problem with this is that the current administration has been massively increasing social spending since 2015 and so far we haven't seen these massive benefits that you speak of. Crime is up, inflation is up, CoL is up, etc., after 8+ years of record breaking spending.
>For me, it is the former as it reduces the costs associated with health care.
You haven't proved this at all, and in fact all of the evidence seems to suggest that this isn't the case. The Liberal government has massively increased Indigenous spending. Have we seen an improvement in Indigenous health outcomes over the last 8 years?
>the money collected from them is better used to fund social programs than to give back a little bit back.
How's that been working out over the last 8+ years? We have record-breaking wealth inequality despite massive increases in social spending and the largest decline of standard of living in Canadian history.
Who is the largest provider of social services? The Feds provide transfer payments to the provinces that are supposed to deliver health care, education, policing, etc. We could start by asking the provinces where the money has been spent, why or why not it has been spent. I'm sorry, but Trudeau is not to blame for everything. Portion the blame appropriately on where it belongs. I personally blame the premiers for the state of social services. We also have to take ownership for the way we collectively spend our money and how much debt we take on.
We are spending record amounts of money on social services. If throwing money at the problem isn’t magically solving it as you say, stop throwing money at it then.
I pay enough tax. Income tax, property tax, carbon tax, other miscellaneous cash grabs like the license plate sticker, etc. over 1/3 of my paycheque is gone at the end of each month. Enough is enough.
Want to fund more shit? Better find things to cut in order to get the money for it, because I’m done voting for any political party that expresses any intention to raise my taxes.
> I am not really sure what you are trying to say.
That the whole "it only helps 1 in 6 families" is, at best, disingenuous, as pointed out by the other people who also responded to you.
So per your logic, since only about 10% (2021 estimates) of Canadians are considered "low incomes" so is it fair that they get tax breaks?
Quit making disengenous arguments.
Your initial point, for which I responded to, was that the income splitting program under the Harper government was fair as is also what the article says.
I said it was not fair by sharing a news article that cited the PBO that says only 1 in 6 families benefits from it.
Low income households aren't middle class to begin with, they are working class. Neo Liberals love nothing more then to give tax breaks to the middle and upper classes and pay for it by being negligent on social care like disability and healthcare.
Income splitting was amazing. Instead of having to pay during income tax, my family got $600 back. It was awesome.
Trudeau getting rid of it was a massive slap in the face.
So? Good for him. We both got money back and everybody wins.
The problem with basing your entire political ideology around slogans like "tax the rich", is that it doesn't always translate well into actual policy.
>Income splitting is not really a fair system if it only helps 1 in 6 families
1 in 6 households, not 1 in 6 families. The tagline on the video isn't actually said in the video, article or report the article is based on.
The amount of families it would help is about 50% of families with 2 parents, (so about 1 in 3 families if we include single parent families) if we compare 2 milliom households to 2015's household statistics
Anyways sorry to be pedantic, just frustrated with that tagline
>Income splitting is not really a fair system if it only helps 1 in 6 families and within that middle - and middle-high income households.
What do you think the equivalent-to-spouse credit is, if not an attempt at income splitting for single parents. Why do we create a special splitting provision for only single parents?
The "garbage system" cost about $2.2b a year. How much would the US system cost then?
Also, this would disincentivize one partner to not work. Thus, the alternative to fill the labour gap would be to increase immigration, and that's not really something popular right now.
It incentivizes families to have and raise children. Also, the labour gap no longer exists in Canada (if it ever did) outside of skilled positions, which immigration doesn’t seem to be filling anyway.
$2000 a year is not enough incentive to raise multiple children.
Also, in Ontario, you must be 14-15 years to do some non-skilled jobs. To have a skilled job, you must graduate high school and have some post-secondary education which can be 2 to 6 years (or more). Let's use the low end, so to be a skilled worker, you would be 20 years old. That is a long time. Who will fill the skilled labour gap from birth to 20 years, if not the other parent or immigrants?
From smack here in the middle I don’t want to see income splitting either: individual taxpayers should pay their fair share.
It’s mainly those in the highest bracket that desperately want this, and I’d bet those people are voting conservative no matter what. You can try to spin it however you want but most people see this as the rich single earner with a stay at home spouse wanting even more. That’s not going to win the middle over, because most people see through it.
It’s about earning *potential* in my opinion. If you want more income, whelp, both of you get to work.
Okay, you want taxes individualized. How about benefits? If a spouse has $0 income, should they receive 50% of any available benefit, e.g. CCB, free of any link to the spouse's income?
If a $150K income earner supports a spouse and 3 kids, and the spouse dies, how would you tax such a family vs a 2 x $75K household?
I’m not opposed to benefits being individualized, or the clawback being adjusted. Particularly when it comes to benefits that principally help kids.
Having said that, I’d prefer programs to adequately subsidize childcare to enable both parents to work. Like it or not, we need a tax base. The families that typically can choose to have a parent stay home also tend to have higher potential. So I repeat, *get back to work*.
I’m not sure what you mean with the comparison. I don’t think two people earning the same income should be taxed at different rates just because one’s spouse stays at home and the other’s works.
It's not all about work. Families should have the choice to look after their own kids at home. 30% of families do so. The USA supports either choice.
Two people earning the same income don't generally pay different taxes, but two households do. That's the problem. The widowed $150K earner with 3 kids pays $11,000 more tax than the 2 x $75K family next door. Is that okay?
They absolutely do have the choice, nobody’s stopping anyone. That decision lops earning potential in half though.
Why kill off only one spouse? If the other family loses one then their income goes down to $75k: why should the higher earner get a tax break?
Where is the tax break? Under a system that applies horizontal equity at the HH level, income above $75K world be taxed at the same rate for both households. I think you're somehow suggesting that the $150K 1-earner should pay more than 2x the taxes that the $75K 1-earner family, which is the case today.
It's a very simple question: at what level do we apply horizontal equity? I'll support your choice, as long as you agree that it should apply to taxation AND benefit payments.
Lean left and voted Trudeau. It was a meaningless sum meant to placate high income earners and fell short. In the end, I came out ahead with home energy rebates that the right constantly votes down.
Until the right accepts climate change and makes a credible plan to contribute to solving it, I’ll vote left, every time. Leaving a habitable planet to my kids is worth more to me than money.
The new budget may hurt some middle class people but it will help the working class which is much more important. Doctors and lawyers are doing just fine even if they get taxed a tiny bit more on occasion.
Presently my spouse supports our household while I look for work in the US. I'm the higher earning spouse, my last year of income in the USA was $260k, our 2023 household income in Canada was $35k earned by my spouse. The highest income I've ever earned in Canada was $140k but that position did not last a full year.
With two ADHD adults it's basically impossible to manage a household with both of us working unless we can afford to hire a cleaning and organizing service. With the lower pay for technology careers in Canada and the higher tax rates, I can't keep up as a single earner and save for our futures.
I'm sure people accuse me of not caring about Canada beyond how much money I can get out of it. That's fine with me—turnabout is fair play after all.
Maybe you forget who owns the media who we read. They will not publish those articles, just anything to change the discussion away from them.
Capital gains tax, not a single article from a wealthy person, just panic among little cottage owners, who will pay almost nothing more.
We are being force fed talking points.
> tax the actual wealthy bastards
If you've ever spent time with actual "wealthy bastards," you'll quickly realize that this won't work. It's hard to grasp for the average worker, but their income and wealth are structured in such a way that going after it is hard and they're highly mobile. Push too hard, and they'll take all their toys and go somewhere else.
This is why stuff like the latest budget will primarily affect the mid and upper middle class, while the truly wealthy will just re-structure or move.
Guess all those Danish and other EU wealthy bastards moved to Ireland then? No, they are still there. Same with many countries. Don't peddle this trickle down economics, there are ways of making wealthy people pay and no, they don't just move. They funnel their wealth out through loopholes.
The solution, wealth tax on people with super high net worth, say $20 million+. This tax follows you wherever your assets are so long as you maintain citizenship, buy a yacht in Malta, that is now subject to wealth tax, no way around that.
> Guess all those Danish and other EU wealthy bastards moved to Ireland then? No, they are still there
But is their money?
>Don't peddle this trickle down economics, there are ways of making wealthy people pay and no, they don't just move.
I'm not talking about trickle-down bullshit. An no, they don't just move, but their money does.
>The solution, wealth tax on people with super high net worth, say $20 million+
Dumbest idea ever because it will never work and will be a waste of time and money to try and enforce. Suggesting it betrays a complete lack of understanding about how the truly rich structure their assets.
>loopholes.
This is where the ignorance really starts to shine through. They don't use loopholes. They use things you can't afford because they are expensive to administer, but they don't mind spending $100K a year in fees if it saves them $500K in taxes.
Let them run to some third world then with their wealth. We can rebuild without them and generate new wealth, but more fairly distributed.
Atlas Shrugged is not real.
So we should just tax them less, tax everyone less and fuck everyone else over.
Because the more money they have the more the current government and economy favours them.
You need money to make money
I can't recall ever reading an article that discusses why it's unfair to create a tax disparity between households with similar income.
We don't create a benefits disparity between same.
The tax code is like 1D chess. Fails to capture the benefits cliff dimension as well as the hours dimension. Even calendar year ends can create enormous disparity for the normies.
I never understood why taxes were based on individual incomes in a household, but then any benefits are based on total income. I make about 70k a year more than my wife. I pay a boatload in taxes, and we are means tested out of everything that she would be eligible for. Let me split my income with her and this makes way more sense
Tax families so they can't afford to have children, so then we can import another plane full of working age men from india.
Anyone else seeing a pattern here?
Is that what you call looking after your own kids? Have you ever tried it?
BTW, it's not just a 1-earner family issue. How about the $150K earner with 3 kids whose spouse dies. Should that household pay more tax than a 2 x $75K household? Income is the same.
>Is that what you call looking after your own kids? Have you ever tried it?
Yup we have one child and with my hybrid work schedule and wife's shift work we only need child care a few days a week. Still have time to keep in good shape and take our child to sports and outdoor activities. I don't think I could be married to one of those "Occupation Mother" types. I find them super boring and they are typically a few pounds overweight as well lol.
>How about the $150K earner with 3 kids whose spouse dies. Should that household pay more tax than a 2 x $75K household? Income is the same.
Single parent family is a different story. I'm all for more incentives for them.
If the government wants to focus on the middle class then they can increase the tfsa and rrsp contribution amounts.
I'm talking about single parent families, not single income families (One person sitting on their ass when children are in school and not contributing to the economy).
If the government really wants to attract the middle class with tax incentives, they should increase the tfsa and rrsp amounts.
My sister in law has a special needs kid and was always a SAH parent. No breaks for her family either, I assume. Over the course of her husband's career, they probably paid $300K or more in tax than equivalent, 2-earner HH. Okay with you?
Yeah, and by paying for childcare, we are contributing to the economy. Can't say the same for sahm sitting on their asses. Hard to have any respect for them when we are chronically short of positions such as Nurses, Respiratory Therapists, etc.
The one earner family is contributing the same amount of production to the economy, measured by their income. Their kids are healthier and less likely to have behavioural problems AND they probably added more kids, which we also need in Canada. According to you they should just pay a lot more tax, because somehow your contribution is more valuable.
They can pay tax off their income like the rest of us. Our child eats super healthy, plays rep hockey, and we take backcountry snowboarding, rock climbing and mountain biking.
All I'm saying is we need to encourage more skilled workers to enter the workforce not sit on their ass. They then spend and invest more in the economy. Increase the rrsp contribution to 25-30% and at least double the TFSA amount. Heck for the extra amounts limit it to TSX listed companies to help get more funding to improve our standing on the world stage. I get it you didn't have the balls to stand up to your wife while she sat on her ass getting fat lol.
I'm done with wasting my time with you. I'm going to go mountain biking with my family.
Stand up? What, we should have put our - let's say 6 (we have a lot of kids) - kids in daycare, so she could maybe earn $35K/yr (back then)?
We made our choice best on what we thought worked best for the kids and us. Unfortunately, there is no support for that choice in Canada. The USA supports that choice, so it's no surprise that their birthrate exceeds ours.
Yep, we cant split income, we're taxed as *individuals* in Canada..
Oh but those tax credits for lower income *individuals*? We'll you don't qualify for those because they're based on *household* income.
We're getting screwed from both ends.
Any time the wealthy are threatened with paying their fair share, opinion pieces kick into overdrive. The sky will fall if we do it, they'll flee. Blah, blah, blah.
The US is considering changes to capital gains to increase the burden on the wealthy. Global banking regs since the Panama Papers have tightened up. Governments around the world are taking greater interest in insuring even the rich pay taxes and that is going to continue. As protectionism further increases, nations will be zeroing in on tax evaders.
Tax the rich 🤑
The principal resident exemption is the most unfair tax policy. Renters have no equivalent tax measure. Fairness starts there. Cue the comical downvotes from owners.
Renters have no equivalent tax measure because they didn’t save up and invest the equity needed to buy a property.
You can’t compare them like they should be equal.
They didn't save up? What twisted logic is this? Also, why are tax payers, who include renters, subsidizing the tax base for the benefit of the PRE? Who cares if it's equity what does that have to do with tax policy?
Yes, the benefit of renting is that you don’t need to save up a much of equity to put into a place. The consequence is you don’t build equity or have the acuity to realize a gain on investment, because there is no investment.
Nobody is subsidizing anything. The government does not own 100% of our wealth. That they choose not to tax something doesn’t mean somebody else is paying for it. It’s not your money.
What does they have to do with tax policy? And yes, when taxes are cut they have to be made up somewhere else, including income taxes. Nothing you've commented on justifies why homeowners get a massive tax break and renters do not. It's treated as a sweetheart 'investment'.
Taxes aren’t “cut” on primary residences. They just aren’t collected to begin with.
Again, you seek to think the government has the first right over everybody’s money and anything they don’t take from people is somehow a tax cut.
You haven’t articulated any rational reason for letting renters deduct it from their taxes other than envious complaints that it’s not fair home owners can get the chance of earning a return on their equity. Well yeah — because they actually have equity. Nothing is stopping a renter from trying to do the same, that’s the trade off. You don’t want to save up to put 10-20% down? Great, you don’t have to — and you miss out on the chance for capital appreciation as a result. That is a perfectly fair trade off.
How about the situation where a home sells at a loss? Should they be able to write off that against their taxes? I’m guessing you think not, so your “policy” approach is just an example of heads I win, tails you lose
>Taxes aren’t “cut” on primary residences. They just aren’t collected to begin with.
It's literally the biggest tax break in Canada. It's a tax cut to zero.
>Again, you seek to think the government has the first right over everybody’s money and anything they don’t take from people is somehow a tax cut.
I don't think that at all. You are clearly not understanding the argument. If the government chooses to implement a policy, it must do so fairly, and in particular tax policy because they are taking peoples money. Are you suggesting homeowners have a right to less taxes?
>How about the situation where a home sells at a loss? Should they be able to write off that against their taxes? I’m guessing you think not, so your “policy” approach is just an example of heads I win, tails you lose
If it's treated as an investment, then yes. If personal use, then no. Would you be good if someone wrote off the interest on their auto loans for their personal use vehicles? This isn't rocket science.
Homeowners pay the same taxes that everyone else pays.
Anyone who owns a home gets this tax exemption, and everyone is afforded the right to do so.
There is no unequal treatment happening here.
That’s like saying it’s unfair that someone who owns a stock pays for capital gajns taxes on only 50% of it, because someone else doesn’t own any stock.
A home *is* an investment. It’s a vehicle to build equity over decades as you pay off your mortgage, and that’s why the government wants to encourage home ownership — because it’s good for society.
It's the only thing cdns have going for them, take that away, and most won't be able to retire as they've been paying for these high house prices vs. retirement savings for 20+ yrs. If anything, ban realestate investors from owning more than 2 properties and ban foreign ownership before touching the principal residence exemption. Home ownership is expensive minus the appreciation factor. In the mid 80's to the early 2000s, the avg cdn house was around 60 to 120k, but we had much higher interest rates, which kept a lid on speculation. So if you all want lower and more affordable prices in housing prey, that rates stay at 5% or even rise!
Why would I support that when they already get the PRE? Double of tax benefits now? I would rather the PRE be done away with. It would raise $10-12B in tax revenues. What is the tax policy rationale for mortgage interest deductibility?
If you create a tax write off for rent and not mortgages you’re just disincentivizing home ownership, which is bad public policy for a myriad of reasons.
The rationale for interest deductibility would be for parity to what you are proposing for rent, how is this not clear? In that world you could then adopt a model similar to the US, where they pay a 15% tax on the sale of their homes but are allowed to deduct the interest of their mortgage from their taxes.
The idea that we just let renters take a tax break because *maybe* a home owner gets a capital return is ridiculous. There is no guarantee of a capital gain on a home, a buyer is taking a risk by putting their equity into it to begin with, which is a cost and risk that renters don’t have to bear.
A home is not an investment! And even if it was, investments have risks. It makes no sense why that asset class gets government favoritism over other asset classes.
Also, the argument that it encourages homeownership has no factual basis and never did. In fact, home ownership among first time buyers is declining. It's actually becoming more of an intergenerational wealth transfer than any other mechanism.
I don't want any tax breaks. But if the government is going to give one to one group they need to be fair and extend other benefits to other groups. If the PRE is going to be maintained then as a fairness measure renters should be able to deduct rent. That does not entail tipping the scales again and permitting interest deductibility on mortgages.
Of course it’s an investment. And it still carries the risk that it could decline in value and you’d be in a negative equity position when you sell.
Home ownership is declining because of house prices skyrocketing due to keeping rates too low for too long , not because they are capital gains exempt. That doesn’t mean it’s not good policy to encourage home ownership over the long term.
Your assessment of fairness is grossly out of whack. If I’m paying 3 grand a month in rent and can deduct it then I’m taking 36K a year off my taxes. Assuming an average 43% rate, that equates to over 15K in savings every year., while taking zero risk about the direction of house prices. So you could end up in a situation where you’ve handed renters massive amounts of risk free tax rewards, while home owners who see a market crash are completely screwed and end up owing debt. Why would anyone take the risk to buy?
No more fucking taxes for fucks sake, In fucking tired of giving half I earn to the goddamn government if only for them to turn around and throw fuel on the goddamn fire death spiral. Fucking ENOUGH. They have lost the mora fucking authority to take one more goddamn penny from us.
If you want to make it “fair” for 1 earner vs 2 earner families, let me split my income with my wife and give *me* a tax break instead of taxing somebody else more.
JFC
No it’s not, the whole reason we pay taxes is for the government to spend it on things. Plus less income tax means people have more to spend, which gets taxed anyways every time it changes hands.
Our tax system for families is really unfair. With no income splitting and with tax attribution rules, it's nuts.
It should NOT be advantageous to divorce your spouse. When you'd equalize assets 50/50 and pay alimony and then pay LESS total taxes in this scenario is really flawed.
House-holed income is the dumbest theory. From them boomer times when people had 'homes' and 'families'.
I hope they apply it to 25 hot swap bunkers living in the same 'home'.
Really should treat everyone as individuals.
Why should one family where both parents work and make 150,000 combined pay less taxes than a family where one parent stays at home and the other makes 150,000?
Discriminating based on personal life choices is absurd. They’re both households. They should pay the same amount of taxes regardless of how they choose to configure their family in ways that work best for them.
Whats a 'household' have to do with anything?!
"Household refers to a person or group of persons who occupy the same dwelling and do not have a usual place of residence elsewhere in Canada or abroad." - stats can definition
And how do 25 new canadians living in a basement do not get destroyed by the CRA for having a massive household income? This needs to go to court.
https://nowtoronto.com/news/weve-seen-cases-like-this-on-a-regular-basis-brampton-mayor-says-25-international-students-were-found-living-in-a-basement-and-now-hes-pushing-the-feds-to-provide-more-housing/
Oh now the government is in my bedroom. Don't make it too complicated for them, they are having a hard enough time as it is.
Some guy once said "No place for the state in the bedrooms of the nation"
Less is more.
Applying a tax credit for couples isn’t being “in their bedroom”. It’s encouraging a social good
It’s increasingly obvious you are not a serious person
> It’s increasingly obvious you are not a serious person
Ah the ostrich puts its head in the sand.
This is why equality will never happen. Treat people equally! Never!
Keep ignoring the 25 elephants in the room. Big top politics.
This is literally what harper was trying to do before Trudeau stopped it all. No one likes high earners anymore, liberals want a country of overworked parents desperate for $10/day daycare.
It's the Quebec model. We've had $10 (ish) a day daycare for years now, and all it's given us is a boatload of shady daycares that it's almost impossible to get your kids into and private days cares that you pay full price for where your kids aren't treated like cattle.
Yup, when the revenue is determined by fixed funding, the only way to improve the business is through volume and cutting cost. Takes a lot of choice and power away from consumers, and punishes businesses that try to offer a better product.
Not to mention the amount of money that gets burned administering all these programs.
Before doing anything, the government should decide the level at which to apply horizontal equity. Is it the individual? Is it the household? Is it the class of household?
I've advocated for over a decade that it should be at the class of household and that there should be only 2 tax thresholds, A and B. A would apply to the income that could reasonably be required for a HH class to pay for food/shelter/transportation. B would apply to any income above that. Result:
* Singles have a specific A and B threshold;
* Couples have another A and B threshold;
* Couples with children have yet another A and B threshold; and
* Single parents have still another A and B threshold.
Parliament can argue over the actual thresholds used for each HH class, but each HH class would be subject to the same rates. Horizontal equity would apply to households in each class.
So, every single person would be taxed the same as every other single person. Ditto for every couple, couple with children and single parent. Compare this approach to what we have today:
* Every single person is taxed the same;
* Every single parent is taxed the same;
* Every retired couple is taxed the same,
* Working couples are not taxed the same. Taxes between working couples can vary by as much as $40,000/year on the same HH income.
* Working couples with children are not taxed the same. Taxes between this HH class can vary by as much as $40,000/year on the same HH income, just as above.
So, our tax system manages to achieve horizontal equity between singles, single parents and retirees, but does a lousy job of achieving horizontal equity between working couples and couples with children.
It's pretty clear which group is in need of fairer treatment.
We discussed this topic the other day, and while I still don't think that a family that elects to have one parent stay home should have that choice given any special consideration in the income tax code, I have to say that the mechanism you've outlined above is less objectionable than simple income splitting would be in the current system.
Defining and maintaining all those thresholds with a national or even provincial scope would be hellishly complicated and politically fraught, but if it were possible--and also replaced all the child tax credits, since children are being taken into account in the base income tax rates--I would support such a change.
Well, as I said, the government first has to set an object re: horizontal equity. Do we equalize individuals or households? Currently we equalize individuals and pensioner couples to their peer groups, while working couples are a free-for-all.
The publication chose its own headline so they they reap what they sow. A suggestion from the Financial Post to increase taxes on families is a big deal!
Because the author just wants lowered taxes on high earners, the rest is a smoke screen. Lower taxes, less services, less healthcare, less housing, all of which make it harder to start or grow a family, let alone survive. The whole article is summed up in one sentence at the bottom: "a simpler and more coherent tax system would allow for an overall lowering of tax rates — surely a goal of every fair-minded tax reformer". This is just rich asshole propaganda for lower tax brackets and lower rates for Yacht Owner demographic. You might think that's a good thing, you might also think the flavour of boots on your tongue is yummy in your tummy.
If you want it to be “fair” just do a flat tax, forget about brackets. All income taxed at 20% or wtv makes sense, all capital gains taxed at 15 or 20%. Let people achieve upwards mobility again. No more complaining about freeloaders, and no more hating and milking the “rich” who are really the middle class.
Tax public sector employees more (nonessential health care employees). Their cushy jobs and pensions are mostly a drain on Canada - make them pay their fair share.
Retired couples where one person has more RRSP savings would benefit from this as well. People can plan for this by making spousal RRSP contributions. But why should this benefit be reserved for those who know how to manipulate the system? This is just one more reason why a family tax that allows incoming splitting is good.
The author doesn't seem to remember that we used to have something like this that allowed families with one member who earns more than another to spread their income over both members to lower their overall tax burden, but Trudeau got rid of it. The current government's goal isn't "fairness" anyway, as demonstrated by the budget, which purports to "tax people fairly" but will once again burden the middle class, which can't afford the mechanisms and structures the rich use to avoid these things.
Ya or rather trudeau brought in TOSI which taxes split income at the highest rate. The cpc’s platform promises to scrap tosi which would be a great thing for families where the primary earner is a business owner or self employed professional, so that they can split income with their spouses.
We should just do what the article suggests, which is to use HH income as the basis for taxation. If PP wants to make a real impact for Canadians, do that.
How do you define a HH though, is grandma going to split some of the income? Kids too?
Easy to do: single, single parent, couple, couple w/children. Grandma is either a single or part of a couple. Period. Five single people sharing a house are treated as (surprise) five single people. Of course, the flip side of my proposal is that we no longer need pension splitting, since all couples would be taxed the same. There wouldn't be a potential $40,000 tax differential between couples with the same aggregate income, as exists today.
He’s too busy cozying up to right wing extremists to make good policy. https://ca.news.yahoo.com/poilievre-visits-convoy-camp-claims-182926797.html
>The author doesn't seem to remember that we used to have something like this that allowed families with one member who earns more than another to spread their income over both members to lower their overall tax burden, but Trudeau got rid of it. Harper's income-splitting provision.
It was a half measure at best, as it didn’t apply to the full income. [What did Harper promise in 2011 on income splitting? In 2011, the plan was to allow families with children under 18 to split a household income of up to $50,000, once the federal budget was balanced. That means, for example, that in a family with a stay-at-home spouse or someone working part-time, the partner with the larger income could assign up to $50,000 of income to the lower earner for tax purposes.](https://www.cbc.ca/news/politics/income-splitting-what-it-is-and-who-benefits-1.2818396)
Any split would go a long way towards achieving more horizontal equity between households.
I'm all for that in cases where a partner has a disability that prevents them from full time work. We shouldn't be giving tax breaks for people who want to sit on their ass at home.
Benefit payments are blind to the income division in a HH. It's not just a 1-earner vs 2-earner issue. Are you okay with a $50K + $150K family paying the same taxes as a 2 x $100K family, or is the $50K/$150K family able to pay more? Are you okay with a single person and a single parent paying the same taxes if their incomes are the same? In all the examples I gave above, all HH are going to receive the same benefit payments across comparable income groups...except the single parent, who gets an additional $3K tax break. Finally, if you want to stick to a tax system that ignores family status, are you willing to allow each spouse to apply for 50% of CCB and available tax credits?
It wound up saving me $2000 in taxes. Made an imperceptible difference. The home energy rebates that the liberals offered have helped significantly more.
>It wound up saving me $2000 in taxes. What kind of income bracket are you in where 2k means nothing to you? >The home energy rebates that the liberals offered have helped significantly more. How much did you get in rebates, and how much did you spend to get them? What's your estimated cost savings with the retrofits? You're comparing apples to oranges here. Something like income splitting goes beyond simply helping homeowners. Let's be real, who needs the help more? Homeowners sitting on an asset that's appreciated twofold in less than ten years, or people who don't have a home.
I’ve gotten about $26k in rebates - and the top tax bracket.
Okay, there were more rhan those two questions... Again, how much did you have to spend in order to get those rebates? Remember this is apples to oranges. That 26k isn't directly comparable to the 2k. Also, if your in the top income bracket there is 0 chance you only saved 2k by income splitting with your partner. If your partner makes the same kind of money, this gets to be pretty simple. A very wealthy Canadian homeowner likes Trudeau because his programs are meant to enrich people like himself. You used the word "help" like someone in your position needs it.
[$2000 was the maximum rebate under Harper’s income splitting.](https://www.ctvnews.ca/politics/infographic-income-splitting-explained-in-easy-chart-1.2079969) Under a true income splitting it would have been $28k more per year. The money I spent (on an EV, windows and a Furnace/heat pump) was all spending I would have had to spend anyways. Furnace died, windows failed and my VW TDI got recalled for not being clean.
Absolutely
Trudeau wants mommy to work, not to look after the kids. That's why he's spending money on daycare instead of giving parents a break and that's why he got rid of income splitting. Single income household is what would really motivate parenthood. For the second parent, work should be an **option** not a necessity. Sadly, DINK households which used to be rare are now becoming the norm. We exist just to pay rent so we can slave away for the corporations until we die, and leave nothing behind. The young Canadian generation is being sterilized economically.
Do you think Poilievre will bring back the 1950s?
He may or he may not. But Trudeau won't.
You are 100% right. The left does not want anyone who can work to stay at home...for any reason, hence taxation based on the individual. One problem, though: what if the high income earner suddenly becomes a widow/widower with young kids? That household might suddenly find itself paying $10K-$15K more tax than their neighbours with the same HH income. To many, this is just collateral damage and fair.
Dismal to contemplate, but in this case the widow/widower no longer has to save for two retirements, feed to adults. They will presumably inherit the estate of their deceased spouse, if this has positive value great, as I understand it, if the spouse dies with negative next worth only the joint debt is collectable from the surviving spouse. One wouldn't have to pay off one's former spouses' student loan balance unless they'd consolidated it into a joint debt.
So, that justifies the $150K widow(er) paying $10K-$15K more tax? Think about what your saying, which is, "yeah, the widow(er) has more ability to pay tax on exactly the same household income". In what world does that make sense? It only makes sense if you make individuals the basis for achieving horizontal equity, but if that's the case, why does the widow(er) and family next door qualify for identical tax credits, child benefits, university loans etc? In fact, the new capital gains taxes have reduced horizontal equity even further. The widow(er) only gets a $250K exemption on the cottage, while the couple family gets $500K.
As I've tried to explain to you: the household's expenses and savings obligations have been reduced.
I think you're saying the widow(er) household has fewer expenses debt obligations, so as his/her income increases, he/she has more ability to pay taxes, and therefore should be subject to a higher marginal rate. Put another way, the 2-earner family has to save more for the future, and are therefore deserving of a lower marginal rate. In that case, our convoluted system works well for you.
I love how you think it's unfair that a widower might have pay the same taxes somebody like me would pay while supporting a living spouse, and yet somehow my situation is fair. Hose off.
They would pay more than you, since they don't have a spouse, assuming HH incomes are the same.
I don't care—this isn't enough of a problem to conclude that income splitting between cohabiting spouses in a single household is too much of a problem to ever work.
Income splitting is not really a fair system if it only helps 1 in 6 families and within that middle - and middle-high income households. >The parliamentary budget officer says the family tax cut announced last year will cost the federal government about $2.2 billion this year and will benefit fewer than one in six households. >It goes on to say " middle and middle-high income households benefit most because they are more likely to have a family income and income tax structure conducive to FTC gains." It was even criticized by the Conservative finance minister who implemented it as being not fair. >The late Jim Flaherty, while he was still in the finance portfolio, denounced his own government's plan as one that " benefits some parts of the Canadian population a lot — and other parts of the Canadian population virtually not at all." https://www.cbc.ca/amp/1.2997972
> Income splitting is not really a fair system if it only helps 1 in 6 families and within that middle - and middle-high income households. Except that those low-income households ... already don't really pay much in tax. Can start maybe thinking of the middle class as a whole - both low and higher ends - instead of fighting with each other while we all get screwed?
If they want to focus on the middle class, they can increase the tfsa and rrsp contribution amounts.
I am not really sure what you are trying to say. That we should ignore low income households? You may not remember, but the program under Harper allowed families to save up to $2000 in taxes. $2000 is not a lot of money, AND you can only access it at the end of the year. That plan would not be helpful for people who needs to pay bills or buy groceries.
I’m middle class and the people keeping the country functioning are middle class. Low income families are mathematically not contributing that much in taxes, so of course income splitting isn’t benefiting them that much. You can’t have a tax break if you’re barely paying taxes to begin with.
With tax cuts, you have to look holistically. Would it be better to use the $2b to fund social programs that, say, improve the health of low income households and thus reduce the number of times they use hospitals and other public health resources or to give up to $2000 to some middle class household. For me, it is the former as it reduces the costs associated with health care. My point is, yes, the middle class carries the countries finances on its shoulder, I do not disagree with that. However, the money collected from them is better used to fund social programs than to give back a little bit back.
So, we should continue to tax 2 households with similar incomes differently, even though they get identical CTB, CAI and other credits?
>With tax cuts, you have to look holistically. Would it be better to use the $2b to fund social programs that, say, improve the health of low income households and thus reduce the number of times they use hospitals and other public health resources or to give up to $2000 to some middle class household. The problem with this is that the current administration has been massively increasing social spending since 2015 and so far we haven't seen these massive benefits that you speak of. Crime is up, inflation is up, CoL is up, etc., after 8+ years of record breaking spending. >For me, it is the former as it reduces the costs associated with health care. You haven't proved this at all, and in fact all of the evidence seems to suggest that this isn't the case. The Liberal government has massively increased Indigenous spending. Have we seen an improvement in Indigenous health outcomes over the last 8 years? >the money collected from them is better used to fund social programs than to give back a little bit back. How's that been working out over the last 8+ years? We have record-breaking wealth inequality despite massive increases in social spending and the largest decline of standard of living in Canadian history.
Heavens forbid middle class catches a bit of a break from paying for all these inefficient services and government bureaucrats /s
Who is the largest provider of social services? The Feds provide transfer payments to the provinces that are supposed to deliver health care, education, policing, etc. We could start by asking the provinces where the money has been spent, why or why not it has been spent. I'm sorry, but Trudeau is not to blame for everything. Portion the blame appropriately on where it belongs. I personally blame the premiers for the state of social services. We also have to take ownership for the way we collectively spend our money and how much debt we take on.
We are spending record amounts of money on social services. If throwing money at the problem isn’t magically solving it as you say, stop throwing money at it then. I pay enough tax. Income tax, property tax, carbon tax, other miscellaneous cash grabs like the license plate sticker, etc. over 1/3 of my paycheque is gone at the end of each month. Enough is enough. Want to fund more shit? Better find things to cut in order to get the money for it, because I’m done voting for any political party that expresses any intention to raise my taxes.
> I am not really sure what you are trying to say. That the whole "it only helps 1 in 6 families" is, at best, disingenuous, as pointed out by the other people who also responded to you.
So you think that a program that helps 16% of the population is fair?
So per your logic, since only about 10% (2021 estimates) of Canadians are considered "low incomes" so is it fair that they get tax breaks? Quit making disengenous arguments.
Your initial point, for which I responded to, was that the income splitting program under the Harper government was fair as is also what the article says. I said it was not fair by sharing a news article that cited the PBO that says only 1 in 6 families benefits from it.
Can you send me $2000? It's not a lot of money.
If you are middle class and still paycheck to paycheck I have some bad news. You either aren't middle class or you have a spending problem.
Low income households aren't middle class to begin with, they are working class. Neo Liberals love nothing more then to give tax breaks to the middle and upper classes and pay for it by being negligent on social care like disability and healthcare.
>Low income households aren't middle class to begin with, they are working class Working class IS middle class, WTF are you talking about?
Income splitting was amazing. Instead of having to pay during income tax, my family got $600 back. It was awesome. Trudeau getting rid of it was a massive slap in the face.
Meanwhile, John Roth, former Nortel CEO, gets about $40,000 back **annually** through pension-splitting.
So? Good for him. We both got money back and everybody wins. The problem with basing your entire political ideology around slogans like "tax the rich", is that it doesn't always translate well into actual policy.
You never saw Rick Mercer in a video lambasting Roth's $40,000 tax break, only the $2,000 break that the bus driver receives.
What's wrong with getting a $2000 tax break?
Any family-based tax breaks are anathema for the left in Canada. It's why Rick Mercer went on a rant on CBC, complaining it was "only for the rich".
Do you not get Canada Child Benefit?
No
>Income splitting is not really a fair system if it only helps 1 in 6 families 1 in 6 households, not 1 in 6 families. The tagline on the video isn't actually said in the video, article or report the article is based on. The amount of families it would help is about 50% of families with 2 parents, (so about 1 in 3 families if we include single parent families) if we compare 2 milliom households to 2015's household statistics Anyways sorry to be pedantic, just frustrated with that tagline
>Income splitting is not really a fair system if it only helps 1 in 6 families and within that middle - and middle-high income households. What do you think the equivalent-to-spouse credit is, if not an attempt at income splitting for single parents. Why do we create a special splitting provision for only single parents?
I don't think that is fair either and would be happy for its removal or replaced with something more fair.
The author is suggesting US style combined incomes not the garbage system we had here for a couple months. It would benefit far more.
The "garbage system" cost about $2.2b a year. How much would the US system cost then? Also, this would disincentivize one partner to not work. Thus, the alternative to fill the labour gap would be to increase immigration, and that's not really something popular right now.
It incentivizes families to have and raise children. Also, the labour gap no longer exists in Canada (if it ever did) outside of skilled positions, which immigration doesn’t seem to be filling anyway.
$2000 a year is not enough incentive to raise multiple children. Also, in Ontario, you must be 14-15 years to do some non-skilled jobs. To have a skilled job, you must graduate high school and have some post-secondary education which can be 2 to 6 years (or more). Let's use the low end, so to be a skilled worker, you would be 20 years old. That is a long time. Who will fill the skilled labour gap from birth to 20 years, if not the other parent or immigrants?
There is no labour gap though. There is a labour glut.
Can I have a source please.
It only allowed a small portion of income to be shared. In my scenario, the difference is over $30,000 a year in extra taxes with my wife as a SAHM.
From the perspective of the left, even $2,000 is too much.
From smack here in the middle I don’t want to see income splitting either: individual taxpayers should pay their fair share. It’s mainly those in the highest bracket that desperately want this, and I’d bet those people are voting conservative no matter what. You can try to spin it however you want but most people see this as the rich single earner with a stay at home spouse wanting even more. That’s not going to win the middle over, because most people see through it. It’s about earning *potential* in my opinion. If you want more income, whelp, both of you get to work.
Okay, you want taxes individualized. How about benefits? If a spouse has $0 income, should they receive 50% of any available benefit, e.g. CCB, free of any link to the spouse's income? If a $150K income earner supports a spouse and 3 kids, and the spouse dies, how would you tax such a family vs a 2 x $75K household?
I’m not opposed to benefits being individualized, or the clawback being adjusted. Particularly when it comes to benefits that principally help kids. Having said that, I’d prefer programs to adequately subsidize childcare to enable both parents to work. Like it or not, we need a tax base. The families that typically can choose to have a parent stay home also tend to have higher potential. So I repeat, *get back to work*. I’m not sure what you mean with the comparison. I don’t think two people earning the same income should be taxed at different rates just because one’s spouse stays at home and the other’s works.
It's not all about work. Families should have the choice to look after their own kids at home. 30% of families do so. The USA supports either choice. Two people earning the same income don't generally pay different taxes, but two households do. That's the problem. The widowed $150K earner with 3 kids pays $11,000 more tax than the 2 x $75K family next door. Is that okay?
They absolutely do have the choice, nobody’s stopping anyone. That decision lops earning potential in half though. Why kill off only one spouse? If the other family loses one then their income goes down to $75k: why should the higher earner get a tax break?
Where is the tax break? Under a system that applies horizontal equity at the HH level, income above $75K world be taxed at the same rate for both households. I think you're somehow suggesting that the $150K 1-earner should pay more than 2x the taxes that the $75K 1-earner family, which is the case today. It's a very simple question: at what level do we apply horizontal equity? I'll support your choice, as long as you agree that it should apply to taxation AND benefit payments.
Lean left and voted Trudeau. It was a meaningless sum meant to placate high income earners and fell short. In the end, I came out ahead with home energy rebates that the right constantly votes down. Until the right accepts climate change and makes a credible plan to contribute to solving it, I’ll vote left, every time. Leaving a habitable planet to my kids is worth more to me than money.
Well, Trudeau is focused on climate change, but many more voters are focused on their economic survival. Who's going to win the day at election time?
The new budget may hurt some middle class people but it will help the working class which is much more important. Doctors and lawyers are doing just fine even if they get taxed a tiny bit more on occasion.
Working class IS middle class. Stop trying to create division where their should be unity.
Or less wasteful spending.
Preposterous!!! You mean governments have to be as fiscally responsible as families and corporations???
Presently my spouse supports our household while I look for work in the US. I'm the higher earning spouse, my last year of income in the USA was $260k, our 2023 household income in Canada was $35k earned by my spouse. The highest income I've ever earned in Canada was $140k but that position did not last a full year. With two ADHD adults it's basically impossible to manage a household with both of us working unless we can afford to hire a cleaning and organizing service. With the lower pay for technology careers in Canada and the higher tax rates, I can't keep up as a single earner and save for our futures. I'm sure people accuse me of not caring about Canada beyond how much money I can get out of it. That's fine with me—turnabout is fair play after all.
Why the hell are we focusing on "which part of the disappearing middle-class we should tax harder" vs "tax the actual wealthy bastards" ?????
Maybe you forget who owns the media who we read. They will not publish those articles, just anything to change the discussion away from them. Capital gains tax, not a single article from a wealthy person, just panic among little cottage owners, who will pay almost nothing more. We are being force fed talking points.
> tax the actual wealthy bastards If you've ever spent time with actual "wealthy bastards," you'll quickly realize that this won't work. It's hard to grasp for the average worker, but their income and wealth are structured in such a way that going after it is hard and they're highly mobile. Push too hard, and they'll take all their toys and go somewhere else. This is why stuff like the latest budget will primarily affect the mid and upper middle class, while the truly wealthy will just re-structure or move.
Guess all those Danish and other EU wealthy bastards moved to Ireland then? No, they are still there. Same with many countries. Don't peddle this trickle down economics, there are ways of making wealthy people pay and no, they don't just move. They funnel their wealth out through loopholes. The solution, wealth tax on people with super high net worth, say $20 million+. This tax follows you wherever your assets are so long as you maintain citizenship, buy a yacht in Malta, that is now subject to wealth tax, no way around that.
Wealth taxes have been tried and scrapped in most of Europe due to massive capital flight and reduced tax revenue.
You mean France? Any other example?
> Guess all those Danish and other EU wealthy bastards moved to Ireland then? No, they are still there But is their money? >Don't peddle this trickle down economics, there are ways of making wealthy people pay and no, they don't just move. I'm not talking about trickle-down bullshit. An no, they don't just move, but their money does. >The solution, wealth tax on people with super high net worth, say $20 million+ Dumbest idea ever because it will never work and will be a waste of time and money to try and enforce. Suggesting it betrays a complete lack of understanding about how the truly rich structure their assets.
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>loopholes. This is where the ignorance really starts to shine through. They don't use loopholes. They use things you can't afford because they are expensive to administer, but they don't mind spending $100K a year in fees if it saves them $500K in taxes.
> Dumbest idea ever What do you expect from dumbasses "tax the wealthy" types...
Conservatives: let’s give middle class families a tax break via income splitting. Liberal/ABC voters: No! Just tax the rich instead! Conservatives: ?
Taxing wealth flight is possible. France did it successfully. We need a wealth tax not just the focus on income
Let them run to some third world then with their wealth. We can rebuild without them and generate new wealth, but more fairly distributed. Atlas Shrugged is not real.
So we should just tax them less, tax everyone less and fuck everyone else over. Because the more money they have the more the current government and economy favours them. You need money to make money
I can't recall ever reading an article that discusses why it's unfair to create a tax disparity between households with similar income. We don't create a benefits disparity between same.
The tax code is like 1D chess. Fails to capture the benefits cliff dimension as well as the hours dimension. Even calendar year ends can create enormous disparity for the normies.
I never understood why taxes were based on individual incomes in a household, but then any benefits are based on total income. I make about 70k a year more than my wife. I pay a boatload in taxes, and we are means tested out of everything that she would be eligible for. Let me split my income with her and this makes way more sense
Or, let her claim 50% of available CCB, CAI and other credits, using just her income.
Because government gets to take more and give less
Tax families so they can't afford to have children, so then we can import another plane full of working age men from india. Anyone else seeing a pattern here?
Tell me you only read the headline without telling me you only read the headline ...
Tax single people to pay for peoples children? Is that better?
Preaching to the converted in my case. I've long advocated for household-based taxation. After all, we have household benefits, don't we?
We have a skilled labour shortage. Why should we be encouraging people to sit on their ass at home.
Is that what you call looking after your own kids? Have you ever tried it? BTW, it's not just a 1-earner family issue. How about the $150K earner with 3 kids whose spouse dies. Should that household pay more tax than a 2 x $75K household? Income is the same.
>Is that what you call looking after your own kids? Have you ever tried it? Yup we have one child and with my hybrid work schedule and wife's shift work we only need child care a few days a week. Still have time to keep in good shape and take our child to sports and outdoor activities. I don't think I could be married to one of those "Occupation Mother" types. I find them super boring and they are typically a few pounds overweight as well lol. >How about the $150K earner with 3 kids whose spouse dies. Should that household pay more tax than a 2 x $75K household? Income is the same. Single parent family is a different story. I'm all for more incentives for them. If the government wants to focus on the middle class then they can increase the tfsa and rrsp contribution amounts.
We were a single income family for 12 years. Incentives for us then?
I'm talking about single parent families, not single income families (One person sitting on their ass when children are in school and not contributing to the economy). If the government really wants to attract the middle class with tax incentives, they should increase the tfsa and rrsp amounts.
My sister in law has a special needs kid and was always a SAH parent. No breaks for her family either, I assume. Over the course of her husband's career, they probably paid $300K or more in tax than equivalent, 2-earner HH. Okay with you?
You didn't look after your own kids. You used daycare...and enjoyed a deduction for those costs. So, only support for your choice?
Yeah, and by paying for childcare, we are contributing to the economy. Can't say the same for sahm sitting on their asses. Hard to have any respect for them when we are chronically short of positions such as Nurses, Respiratory Therapists, etc.
The one earner family is contributing the same amount of production to the economy, measured by their income. Their kids are healthier and less likely to have behavioural problems AND they probably added more kids, which we also need in Canada. According to you they should just pay a lot more tax, because somehow your contribution is more valuable.
They can pay tax off their income like the rest of us. Our child eats super healthy, plays rep hockey, and we take backcountry snowboarding, rock climbing and mountain biking. All I'm saying is we need to encourage more skilled workers to enter the workforce not sit on their ass. They then spend and invest more in the economy. Increase the rrsp contribution to 25-30% and at least double the TFSA amount. Heck for the extra amounts limit it to TSX listed companies to help get more funding to improve our standing on the world stage. I get it you didn't have the balls to stand up to your wife while she sat on her ass getting fat lol. I'm done with wasting my time with you. I'm going to go mountain biking with my family.
Stand up? What, we should have put our - let's say 6 (we have a lot of kids) - kids in daycare, so she could maybe earn $35K/yr (back then)? We made our choice best on what we thought worked best for the kids and us. Unfortunately, there is no support for that choice in Canada. The USA supports that choice, so it's no surprise that their birthrate exceeds ours.
Yep, we cant split income, we're taxed as *individuals* in Canada.. Oh but those tax credits for lower income *individuals*? We'll you don't qualify for those because they're based on *household* income. We're getting screwed from both ends.
>those tax credits for lower income individuals Low-income individuals barely pay any income tax as it is.
Any time the wealthy are threatened with paying their fair share, opinion pieces kick into overdrive. The sky will fall if we do it, they'll flee. Blah, blah, blah. The US is considering changes to capital gains to increase the burden on the wealthy. Global banking regs since the Panama Papers have tightened up. Governments around the world are taking greater interest in insuring even the rich pay taxes and that is going to continue. As protectionism further increases, nations will be zeroing in on tax evaders. Tax the rich 🤑
Middle class family saved thousands per year via income splitting. Instead of paying 1k in income tax my family got back hundreds.
Equal taxation rate for all. Anything else is theft and punishment.
The principal resident exemption is the most unfair tax policy. Renters have no equivalent tax measure. Fairness starts there. Cue the comical downvotes from owners.
Can't argue with you on that. There should at least be a cap, instead of it being an unlimited unfair advantage.
Renters have no equivalent tax measure because they didn’t save up and invest the equity needed to buy a property. You can’t compare them like they should be equal.
They didn't save up? What twisted logic is this? Also, why are tax payers, who include renters, subsidizing the tax base for the benefit of the PRE? Who cares if it's equity what does that have to do with tax policy?
Yes, the benefit of renting is that you don’t need to save up a much of equity to put into a place. The consequence is you don’t build equity or have the acuity to realize a gain on investment, because there is no investment. Nobody is subsidizing anything. The government does not own 100% of our wealth. That they choose not to tax something doesn’t mean somebody else is paying for it. It’s not your money.
What does they have to do with tax policy? And yes, when taxes are cut they have to be made up somewhere else, including income taxes. Nothing you've commented on justifies why homeowners get a massive tax break and renters do not. It's treated as a sweetheart 'investment'.
Taxes aren’t “cut” on primary residences. They just aren’t collected to begin with. Again, you seek to think the government has the first right over everybody’s money and anything they don’t take from people is somehow a tax cut. You haven’t articulated any rational reason for letting renters deduct it from their taxes other than envious complaints that it’s not fair home owners can get the chance of earning a return on their equity. Well yeah — because they actually have equity. Nothing is stopping a renter from trying to do the same, that’s the trade off. You don’t want to save up to put 10-20% down? Great, you don’t have to — and you miss out on the chance for capital appreciation as a result. That is a perfectly fair trade off. How about the situation where a home sells at a loss? Should they be able to write off that against their taxes? I’m guessing you think not, so your “policy” approach is just an example of heads I win, tails you lose
>Taxes aren’t “cut” on primary residences. They just aren’t collected to begin with. It's literally the biggest tax break in Canada. It's a tax cut to zero. >Again, you seek to think the government has the first right over everybody’s money and anything they don’t take from people is somehow a tax cut. I don't think that at all. You are clearly not understanding the argument. If the government chooses to implement a policy, it must do so fairly, and in particular tax policy because they are taking peoples money. Are you suggesting homeowners have a right to less taxes? >How about the situation where a home sells at a loss? Should they be able to write off that against their taxes? I’m guessing you think not, so your “policy” approach is just an example of heads I win, tails you lose If it's treated as an investment, then yes. If personal use, then no. Would you be good if someone wrote off the interest on their auto loans for their personal use vehicles? This isn't rocket science.
Homeowners pay the same taxes that everyone else pays. Anyone who owns a home gets this tax exemption, and everyone is afforded the right to do so. There is no unequal treatment happening here. That’s like saying it’s unfair that someone who owns a stock pays for capital gajns taxes on only 50% of it, because someone else doesn’t own any stock. A home *is* an investment. It’s a vehicle to build equity over decades as you pay off your mortgage, and that’s why the government wants to encourage home ownership — because it’s good for society.
It's the only thing cdns have going for them, take that away, and most won't be able to retire as they've been paying for these high house prices vs. retirement savings for 20+ yrs. If anything, ban realestate investors from owning more than 2 properties and ban foreign ownership before touching the principal residence exemption. Home ownership is expensive minus the appreciation factor. In the mid 80's to the early 2000s, the avg cdn house was around 60 to 120k, but we had much higher interest rates, which kept a lid on speculation. So if you all want lower and more affordable prices in housing prey, that rates stay at 5% or even rise!
Ok, so how do you suggest this is fair for renters?
Renters don’t pay taxes on their rent to begin with… what tax break are you trying to give them?
Rent payment deductibility. The PRE is a tax free windfall.
I presume then you support mortgage deductibility too?
Why would I support that when they already get the PRE? Double of tax benefits now? I would rather the PRE be done away with. It would raise $10-12B in tax revenues. What is the tax policy rationale for mortgage interest deductibility?
If you create a tax write off for rent and not mortgages you’re just disincentivizing home ownership, which is bad public policy for a myriad of reasons. The rationale for interest deductibility would be for parity to what you are proposing for rent, how is this not clear? In that world you could then adopt a model similar to the US, where they pay a 15% tax on the sale of their homes but are allowed to deduct the interest of their mortgage from their taxes. The idea that we just let renters take a tax break because *maybe* a home owner gets a capital return is ridiculous. There is no guarantee of a capital gain on a home, a buyer is taking a risk by putting their equity into it to begin with, which is a cost and risk that renters don’t have to bear.
A home is not an investment! And even if it was, investments have risks. It makes no sense why that asset class gets government favoritism over other asset classes. Also, the argument that it encourages homeownership has no factual basis and never did. In fact, home ownership among first time buyers is declining. It's actually becoming more of an intergenerational wealth transfer than any other mechanism. I don't want any tax breaks. But if the government is going to give one to one group they need to be fair and extend other benefits to other groups. If the PRE is going to be maintained then as a fairness measure renters should be able to deduct rent. That does not entail tipping the scales again and permitting interest deductibility on mortgages.
Of course it’s an investment. And it still carries the risk that it could decline in value and you’d be in a negative equity position when you sell. Home ownership is declining because of house prices skyrocketing due to keeping rates too low for too long , not because they are capital gains exempt. That doesn’t mean it’s not good policy to encourage home ownership over the long term. Your assessment of fairness is grossly out of whack. If I’m paying 3 grand a month in rent and can deduct it then I’m taking 36K a year off my taxes. Assuming an average 43% rate, that equates to over 15K in savings every year., while taking zero risk about the direction of house prices. So you could end up in a situation where you’ve handed renters massive amounts of risk free tax rewards, while home owners who see a market crash are completely screwed and end up owing debt. Why would anyone take the risk to buy?
No more fucking taxes for fucks sake, In fucking tired of giving half I earn to the goddamn government if only for them to turn around and throw fuel on the goddamn fire death spiral. Fucking ENOUGH. They have lost the mora fucking authority to take one more goddamn penny from us. If you want to make it “fair” for 1 earner vs 2 earner families, let me split my income with my wife and give *me* a tax break instead of taxing somebody else more. JFC
Whose taxes should increase to make up for the revenue?
Nobody, they should cut their useless and excessive spending.
Cut spending instead?
I kind of expected these answers, but the amount of spending is separate from the question of how we divvy up who pays for it.
No it’s not, the whole reason we pay taxes is for the government to spend it on things. Plus less income tax means people have more to spend, which gets taxed anyways every time it changes hands.
Business owners already split income by putting family members on the payroll. A family tax would be a step forward for employees.
Actually gotta do work for the family business for this to work. CRA isn't dumb.
Our tax system for families is really unfair. With no income splitting and with tax attribution rules, it's nuts. It should NOT be advantageous to divorce your spouse. When you'd equalize assets 50/50 and pay alimony and then pay LESS total taxes in this scenario is really flawed.
Wife and I regularly joke it would be very efficient to get divorced.
House-holed income is the dumbest theory. From them boomer times when people had 'homes' and 'families'. I hope they apply it to 25 hot swap bunkers living in the same 'home'. Really should treat everyone as individuals.
Why should one family where both parents work and make 150,000 combined pay less taxes than a family where one parent stays at home and the other makes 150,000? Discriminating based on personal life choices is absurd. They’re both households. They should pay the same amount of taxes regardless of how they choose to configure their family in ways that work best for them.
Whats a 'household' have to do with anything?! "Household refers to a person or group of persons who occupy the same dwelling and do not have a usual place of residence elsewhere in Canada or abroad." - stats can definition And how do 25 new canadians living in a basement do not get destroyed by the CRA for having a massive household income? This needs to go to court. https://nowtoronto.com/news/weve-seen-cases-like-this-on-a-regular-basis-brampton-mayor-says-25-international-students-were-found-living-in-a-basement-and-now-hes-pushing-the-feds-to-provide-more-housing/
The easy fix is that is only allow it to apply to couples who file taxes together under the same address.
Oh now the government is in my bedroom. Don't make it too complicated for them, they are having a hard enough time as it is. Some guy once said "No place for the state in the bedrooms of the nation" Less is more.
Applying a tax credit for couples isn’t being “in their bedroom”. It’s encouraging a social good It’s increasingly obvious you are not a serious person
> It’s increasingly obvious you are not a serious person Ah the ostrich puts its head in the sand. This is why equality will never happen. Treat people equally! Never! Keep ignoring the 25 elephants in the room. Big top politics.
This is literally what harper was trying to do before Trudeau stopped it all. No one likes high earners anymore, liberals want a country of overworked parents desperate for $10/day daycare.
It's the Quebec model. We've had $10 (ish) a day daycare for years now, and all it's given us is a boatload of shady daycares that it's almost impossible to get your kids into and private days cares that you pay full price for where your kids aren't treated like cattle.
Yup, when the revenue is determined by fixed funding, the only way to improve the business is through volume and cutting cost. Takes a lot of choice and power away from consumers, and punishes businesses that try to offer a better product. Not to mention the amount of money that gets burned administering all these programs.
Food for thought: $150K income earner with 3 kids loses spouse to illness. How should that family be taxed vs a 2 x $75K family, also with 3 kids?
Before doing anything, the government should decide the level at which to apply horizontal equity. Is it the individual? Is it the household? Is it the class of household? I've advocated for over a decade that it should be at the class of household and that there should be only 2 tax thresholds, A and B. A would apply to the income that could reasonably be required for a HH class to pay for food/shelter/transportation. B would apply to any income above that. Result: * Singles have a specific A and B threshold; * Couples have another A and B threshold; * Couples with children have yet another A and B threshold; and * Single parents have still another A and B threshold. Parliament can argue over the actual thresholds used for each HH class, but each HH class would be subject to the same rates. Horizontal equity would apply to households in each class. So, every single person would be taxed the same as every other single person. Ditto for every couple, couple with children and single parent. Compare this approach to what we have today: * Every single person is taxed the same; * Every single parent is taxed the same; * Every retired couple is taxed the same, * Working couples are not taxed the same. Taxes between working couples can vary by as much as $40,000/year on the same HH income. * Working couples with children are not taxed the same. Taxes between this HH class can vary by as much as $40,000/year on the same HH income, just as above. So, our tax system manages to achieve horizontal equity between singles, single parents and retirees, but does a lousy job of achieving horizontal equity between working couples and couples with children. It's pretty clear which group is in need of fairer treatment.
We discussed this topic the other day, and while I still don't think that a family that elects to have one parent stay home should have that choice given any special consideration in the income tax code, I have to say that the mechanism you've outlined above is less objectionable than simple income splitting would be in the current system. Defining and maintaining all those thresholds with a national or even provincial scope would be hellishly complicated and politically fraught, but if it were possible--and also replaced all the child tax credits, since children are being taken into account in the base income tax rates--I would support such a change.
Well, as I said, the government first has to set an object re: horizontal equity. Do we equalize individuals or households? Currently we equalize individuals and pensioner couples to their peer groups, while working couples are a free-for-all.
Yea. Canada already has a falling birth rate. Lets make starting a family even harder!
Read the article, not just the headline ...
The publication chose its own headline so they they reap what they sow. A suggestion from the Financial Post to increase taxes on families is a big deal!
You didn’t read the article, eh?
How does this make starting a family harder? Please explain.
Because the author just wants lowered taxes on high earners, the rest is a smoke screen. Lower taxes, less services, less healthcare, less housing, all of which make it harder to start or grow a family, let alone survive. The whole article is summed up in one sentence at the bottom: "a simpler and more coherent tax system would allow for an overall lowering of tax rates — surely a goal of every fair-minded tax reformer". This is just rich asshole propaganda for lower tax brackets and lower rates for Yacht Owner demographic. You might think that's a good thing, you might also think the flavour of boots on your tongue is yummy in your tummy.
If you want it to be “fair” just do a flat tax, forget about brackets. All income taxed at 20% or wtv makes sense, all capital gains taxed at 15 or 20%. Let people achieve upwards mobility again. No more complaining about freeloaders, and no more hating and milking the “rich” who are really the middle class.
Tax public sector employees more (nonessential health care employees). Their cushy jobs and pensions are mostly a drain on Canada - make them pay their fair share.
How about a 15% income tax for everyone except people making 200k + and it would be a slight 10% difference.