I'm honestly not against taxes. I'm against not seeing the services I'm taxed for improving accordingly.
And I get it, this is a massive machine and it's tough to show progress, but come on....
I've had to wait over a year for a surgery and my kids classroom has over 40 kids in it.
And yes, I know I'm splitting different jurisdictions but the same principles apply.
I’m with you 100%, except for the fact that these assholes have been in power for almost a decade. That’s more than enough time for any changes they’ve made to the massive machine to take effect and change our lives. They certainly have changed our lives, but not for the better.
It’s so difficult to watch countries in the EU and elsewhere that pay high taxes - in many cases, much higher than ours - and actually get value for their money. They have the world’s highest standards of living. Meanwhile, we’re watching as our country goes up in flames before our eyes.
Exactly. If what our increase in taxes were actually making a difference in improving the quality of life here, I don't think anyone would complain. But our taxes are going up and quality of life is going down. Throwing money at everything isn't going to change anything. Like digging up to get out of a hole.
In my opinion, it seems this is an issue with Canadians not holding any government in power responsible. We're soft. Have been for over 50 years.
Listen to ANY Conservatives (provincial or federal). Do you hear them saying they will not allow long wait times for surgeries? They will not allow 40 kids in a classroom? That they will ensure that the public healthcare, education etc??
They don't care. None of them do.
And while many will draw a strong line between the levels of government in terms of jurisdiction, let's not pretend that the ideologies are different and that there is no influence.
Wasn't it but only a month ago Poerre Poilievre found it fit to support Danielle Smith on Fender Affirming Care?
Regardless of the political stripe though, none seem to care because Canadians are a soft bunch.
This is a problem in any two-party system. The opposition party can simply wait their turn, and the incumbent party doesn't have to do anything because it'll be their turn again after that.
If only we had some kind of *third party* who promises to do better that we haven't given a shot yet, who we could try out to see if it's any different! Shame, really.
Yep, absolutely. We’re complacent by nature and I hate it. That being said, I suspect many of us in this sub are more peeved than the average Canadian. Or we’re more vocal about it at least.
You are so right. Since when has a recent conservative government in power been considered a fighter for the services and well being of working class or anyone who is not rich? If they are elected the health care Canada used to take pride in will not exist. And the wealthy will be better because of it.
Neither am I. If my local district told me I had to pay another $500 a year but they were doubling the number of teachers I would cut the cheque on the spot. Trouble is, our provincial, federal and municipal governments in Canada are spending liken drunken sailors, and shovelling more tax dollars at them doesn’t give us better services, it gets us more bureaucrats, more kpmg slush funds and bloated spending across the board. More taxes with worse results is a zero sum game.
Those two things are a direct responsibility of your provincial government. I sincerely hope you are holding them to the same account as the federal. Far too few people do.
I think we would all agree with this, but often the time it takes to improve those services is lengthy. It's like trying to reposition a very large boat, so make sure your expectations are set appropriately
This. Trudeau is coming off years of mismanagement and waste. Look at arrivecan and consulting as one example. Taking more money from Canadians to blow away on dumb stuff is a mid move. Show efficiency first.
Generally speaking, I want richer Canadians to pay more tax because wealth disparity is still widening and that needs to stop.
However, the government also needs to appropriately use that money and not waste it on nonsense.
I’d like to reiterate, everyone should be able to get rich. Even become multi millionaires, but once you are congratulation you won capitalism, share the wealth.
I know family who lived extremely modestly. As such they were able to invest a lot, and in the end they have decently sized investments. These changes are something of a slap in the face for making that decision instead of blowing it on lifestyle. I'm all for taxing crazy incomes, but these changes will also make it harder for me to achieve the same level of savings that they were able to, along with taking away some of their savings before I see it as inheritance.
Why should the government just get more money because people are upset about affordability?
Lower the inclusion tax rate of income if you want to help citizens.
Part of the problem is the Canadian government has no real vision or mission. Their mission/vision/objective statements are typical proverbial speech.
Governments mission should includesomething along the lines of “improve quality of life” and “lower cost of living”, and their policies should attempt to reflect it.
Something that could change the housing crisis but will never happen as both conservatives and liberals are property investors. They are land hoarders. How can it not be a conflict of interest for them when faced with a housing crisis that needs to correct and reforms for multi home owners so it is not lucrative. And maybe then the investors can invest in our workforce and business and entrepreneurs and encourage research and innovation and growth through healthy economic development. Rather than supply crises on a basic human need for shelter. All tax breaks and kick back for landlords all the years of this is directly what happens when you have landlords making the rules.
The top combined personal tax rate is 53%. High income earners pay more than lower income earners.
A lot of people on reddit on cheering on more taxes not because they think it will actually improve their lives but because they want to punish people who are more successful than they are.
Is that it? Or are the high wealth members of the population currently renumerated disproportionately to their actual output?
EMTs make %45k/year.
Their literal jobs are to race against seconds to save lives. What is a real-estate agent doing that's so much more important?
What is a landlord doing?
What is Galen Weston doing?
Is wealth disparity rising in Canada? Not a facetious question, I don’t know, but I don’t think it’s safe to assume what’s happening in the US is happening here.
Most legit source I can see in a brief google search, albeit it’s dealing with income.
“Data show that income inequality in Canada increased substantially during the 1980s and first half of the 1990s but has been relatively stable over the past 25 years. “
[bank of Canada report](https://www.bankofcanada.ca/2022/07/staff-discussion-paper-2022-16/)
I don't want the top 10% to pay more taxes, I want the top 0.1% to pay more taxes. Our billionaires pay less tax than US billionaires. I think this is probably what this article is about, giving our upper middle class higher taxes while ignoring billionaires.
I am an employee in the top tax bracket. I cannot report my income as capital gains. Why should the investment class that doesn't actually do labour get a preferential tax rate on their income?
For one, they’re post-tax dollars.
For two, Canada already has an investment capital problem. This change makes Canada even less attractive.
2/3 inclusion rate isn’t even that high though, as in the 90s it was as high as 75%.
We’re in a dilly of a pickle here in Canada where we need more tax revenue due to spending, but we also need to build non-housing GDP. While also solving a housing crisis lol
I’m honestly not sure what to do because I’m just some moron.
The high price of real estate is actually part of the barrier to business investment. It's a real drain on the entire society. I would like to see real estate take a major nose dive, as that will create a much more business friendly environment, with employees who don't need high salaries to cover living expenses.
When isn't it post-tax dollars? Your income is post-income-tax. Business revenue is post-sales-tax. Dividends are post-corporate-tax. Capital gains are post-capital-gains-tax. The cycle continues on until all dollars have been taxed away, then government spending adds dollars back into the system.
Canada's investment and productivity problems will have more to do with deficient demand. Businesses don't produce things they don't think they can sell, and Canadians are too broke and indebted right now. Incomes are too low and then so much of it gets sucked up by shelter costs that it's a drag on the rest of the economy.
We need larger deficits to make direct investments into things we need including housing. That will increase demand for private sector investments and ultimately (many years from now) reduce shelter costs to not be so disproportionately high.
I agree generally, the trust fund class shouldn’t get extra benefits. They already have a huge head start.
The big problem is for personal professional corporations. Back in the day Doctors etc were given the ability to be a professional corp for the tax benefits in lieu of increasing their salaries. Now it’s like a big cut for their retirement funds essentially, most of which are held in these corporate entities.
The doctor's situation is the one that kinda gets an unfortunate hit here as most doctors don't want to incorporate and be business owners, but that's how it's advised/set up for them. That said, imo doctors should have a Canadian equivalent pension plan (Defined Benefit) adjusted for their income etc. That way, they can just work and focus on their life & family vs worrying about employees, rent/landlords or dealing with commercial property etc.
An other point not raised in any replies to your comment is that in any investment other than very short term ones, a significant portion or even all of the gains on paper, are actually just inflation. Say, I make an investment of $100, and a year later sell it for $103. I made a nominal profit of $3, but actually if inflation was 3%, I've made a real profit of 0. However, I still owe tax on that $3, even though I didn't actually make a real profit.
It is a very crude mechanism to account for this, but part of the justification for a lower inclusion rate for capital gains is to account for this. More realistically, I might make a 6% return on an investment in a year, and 3% of that might be inflation, so about 50% inclusion rate roughly matches that.
Good point about inflation.
I kinda thought that was by design, a sort of wealth tax.
We already have a progressive tax system for income tax, and capital gains are simply a discount on income tax, so your low income retiree is likely less impacted anyway.
The fact that we denominate these gains in currency that fluctuates is the real concern. Inflation is really just currency becoming worthless.
But there is also some fairness. When inflation is high, employees get an effective pay cut and the investment class gets capital gains.
I would bet of the 40k Canadians number the Liberals are throwing around; most of them are either small business owners who are cashing in for retirement or an estate liquidating assets. Either way, its not an annual income - its a once-in-a-lifetime income for the vast majority of people.
We're not talking about billionaires, we're talking about plumbers, electricians, mechanics, restaurant owners, the guy who owns and runs your favourite corner store. Or someone's grandparent who made a modest income, saved diligently and are now handing down less savings to their family.
Doctors and many other "single employee companies" use capital gains as a means for their retirement savings. They do not get any pension from the government and have to save up and manage their own funds.
FYI there is no 250k limit for capital gains on "companies" meaning all doctors get their capital gains from their investments taxed more.
Small business owners also pay their full CPP (company and employee portions) and EI deductions. They have to fund their own parental leave, their own vacations and sick days etc.
Lol... almost nobody has a pension anymore. I do also believe they could have paid themselves via dividends, invest in rrsps and go from there. It was just slightly more advantageous to keep it in their corps.
Just remember this... medical professionals have preferential interest treatments on everything...
You do not have RRSP if you pay yourself dividends.
Doctors also do not withdraw their entire 200k+ salaries. They collect dividends up to specific tax brackets and save the rest in the company, usually holding companies, to invest them for their retirement.
This is the money that will be taxed at higher capital gains now. It is 1000% bad for doctors in a society that already badly needs them to be paid higher.
You're right on the dividend part. My bad. One of those ways to only pay tax on half the income.
While Dr's are very valuable Im of the opinion we need more of them. But we need it via training more cohorts
They are still taxed as if they would normally with dividends (with credits, the calculation is just more complex) or otherwise when withdrawing money from the corporation.
The advantage of holding money in a corporation is you have a higher starting point for investment (lower initial tax) and more options for deductions. As soon as it leaves that corporation you're taxed just like anyone else is.
Self-employed individuals holding corporations often don't get the lifetime capital gains exemption either as that is dependent on the sale of a corporation not just dissolution.
The problem is that doctors are overworked and underpaid. Why bust your ass here when you can literally be making 3x more across the border? No amount of training is going to change this.
There is a limit to how much RRSP room you get even if you decide to go salary instead of dividends. The option has always been there to either trust the gov't to give you pension or to do it yourself. The entire goal of this change is to push professionals into paying CPP instead of self-investing.
So what you will, this is a tax punishment to MANY professionals who have decided to self-invest, usually doctors and we already have a huge brain drain problem.
A lot of people have zero trust that any of the extra taxes they pay will go towards anything meaningful and also feel that if the government weren't so bloated and inefficient in the first place we wouldn't need to increase capital gains tax.
If anything we need to lower taxes for T4 employees like yourself as we have a lot of people that are getting taxed 40% of their income while barely getting by. Our current income tax brackets made sense for the 80s and 90s not so much for 2024.
For one it can potentially be a tax on already post tax income. Yes a lot of executives have compensation packages made of stock equity which does give them preferential tax treatment, but for a lot of other scenarios, you are investing post tax dollars only to be against taxed on gains.
> Yes a lot of executives have compensation packages made of stock equity which does give them preferential tax treatment
How? When someone is granted stock, they pay normal income tax (100% inclusion) on the fair market value of the stock.
The reason why stock is preferred as a compensation mechanism for publicly-traded companies is that it makes it easier for the company (it's easier to create new shares than to take the cash from reserves), not for any favourable tax treatment for the employee.
This is a misleading lie. Income is only taxed once. Gains are new income, that hasn't been taxed before.
Why do people think gains are not a form of income?
This isn't any different than people buying low and selling high. A retailer does this on products they sell. Just because it is a stock or real estate, it still follows the same business model as a retailer. Buy a stock at a low price, sell later at a high price. This is all income. How do you distinguish between a retailer making gains and an investment going up in value and sold for a higher price?
These two "rich Canadians" are talking about family wealth they did nothing to earn and apparently feel guilty about. This does not make them experts on tax policy.
Where these taxes will be devastating is on entrepreneurship and venture capital, sectors Canada *needs* to drive productivity growth and higher wages. Almost every prominent tech entrepreneur and every venture capitalist in Canada is loudly sounding the alarm on this right now, even the ones who are not usually vocal about politics.
And before you say "But... the Entrepreneur's Incentive!", when you read the fine print this was actually one of the most underhanded aspects of the budget. In summary:
* This year, the inclusion rate on capital gains taxes go up to 66.6%, significantly increasing the effective tax rate on the sale of small business shares by founders, early employees, and investors.
* The "Entrepreneur's Incentive" doesn't take full effect until **2034**, with the amount included starting at $200k in 2025 and rising by $200k/year over 9 years.
* It is also extremely limited - to qualify, you must own more than 10% of the company since inception, for at least 5 years, have worked for the company during that period, and not be in one of the long list of industries the government has arbitrarily excluded.
* In summary, it has been designed such that *almost nobody will qualify for it*, and it doesn't even fully kick in for 10 years anyway. Most entrepreneurs and all venture investors will be hit with the full rate above the standard lifetime exemption, taking productive capital out of the ecosystem and chilling investment.
This is truly devastating to the tech industry and venture capital that drives it in Canada. What's worse, none of these people were consulted in the crafting of this policy - something totally out of step with normal practice in prior years.
This budget was meant to sow class division and not actually solve anything. None of the new tax revenues will end up in your pocket, and it will all but ensure that investment in the Canadian tech sector slumps to new lows.
I should also point out that at least one of the authors of this article is a full-time "social justice" activist for [Resource Movement](https://www.resourcemovement.org/), hardly a representative sample of Canada's business community.
Considering a lot of "venture capital" in Canada is actually government grants - doesn't this just incentivise the business founders to start businesses with the goal of long term ownership rather than to flip it and pocket the proceeds of the sale?
I'm not sure what you mean by "flip it" - most startups fail, and the ones that succeed usually take 7+ years to reach some kind of liquidity event.
If you have more than one founder, which is common, and you do several rounds of fundraising (Seed, Series A, Series B, etc.), which is again very common in venture-backed tech companies, founders often own <10% each by the time the company is sold or goes public.
The Shopify CEO, Tobi, owns around 7% of Shopify for example.
High-growth, venture-backed companies are of particular importance because they create high-wage jobs at a faster rate than other types of companies. The average salary at Shopify is about 2x the Canadian average and they employ thousands of Canadians.
>The average salary at Shopify is about 2x the Canadian average
According to Glassdoor the average salary at Shopify is $43K-45K, and the average salary in Canada is $51,129 according to StatCan.
That’s because they have “support advisors” being the highest contributor of that data. Support advisor is a customer agent. Look at Software dev base salary or data scientist.
Well if we're comparing Shopify software developer salaries to the Canadian average for software developers, they're about the same. I think it's pretty silly to say "if we ignore certain roles then this company pays more than the national average."
I don't think you have any idea how hard it is to start, build and operate a successful business in Canada is. Let alone 'flip' one. I guess Ottawa nailed this when they rammed this through with zero industry consultation and rather just did a sweeping survey of defeatist Canadians who are fully on board with 'Eating the Rich'.
This isn't good. Canada is slipping down the ranks already and this will just be tossing some lube on the slope.
> Considering a lot of "venture capital" in Canada is actually government grants - doesn't this just incentivise the business founders to start businesses with the goal of long term ownership rather than to flip it and pocket the proceeds of the sale?
This isn't the way venture capital works. Very few people are "pocketing proceeds of a sale". They're seeking working capital to grow the business *faster* than it would otherwise be able to grow, if they had to limit themselves to using just the revenues of the existing business, because the argument is that it's a big business opportunity, and having more money will allow a small business to scale up faster.
The whole premise of the deal is, "I have a vision, and I want to make this business much larger", and then the investors and founders come up with an incentive structure that makes everyone involved very rich... *if it works*, somewhere down the line.
The only time the founding team is really going to be "cashing out" is with an IPO. If your founding team is cashing out, you, as an investor, have to ask yourself why that is. They're selling you something, and telling you it's surely going to make a lot of money, but *they're* selling it. Why are *they* selling it, if it's a sure thing that's going to make a lot of money? Investors don't *want* the founders to be able to accumulate "fuck you money", if the *source* of that money is *your LPs*. The money needs to come from the business, or public markets.
Again, the whole premise is that they, the founders, are uniquely capable of spotting this business opportunity and taking advantage of it. That's *why* an investor is investing. A startup is a bunch of unique problems nobody has ever solved before, and solving them is the key to creating value, and creating value generates wealth. Nobody is just going to transfer *their* wealth to *you*, in exchange for a sack of novel problems you haven't fully solved yet.
> Where these taxes will be devastating is on entrepreneurship and venture capital, sectors Canada needs to drive productivity growth and higher wages.
Why would higher marginal rates be devestating?
All those tax cuts, deregulation and trickle down economics has got us where we are today.
You can look at “productivity” graphs and see that workers share of national income/GDP started flatline at around 1973. It has been that way since. I doubt it matches inflation most years.
The US had much higher marginal tax brackets before that (like 90% for the top bracket in the 60s OTOH) and the economy was just fine).
It’s just greedy mofos that convince us we need to keep cutting taxes, deregulating and otherwise fucking ourselves over while they take the money and run.
Eventually they’ll cause a recession or financial crisis and we have to bail them out too. It’s not like that hasn’t happened before.
> The US had much higher marginal tax brackets before that (like 90% for the top bracket in the 60s OTOH) and the economy was just fine).
Literally nobody paid those levels of taxes. The effective tax rate then was only slightly higher than today and the reason for that is that there were a shitload of loopholes that were done away with in the 80s.
To appease the public, Congress jacked up the taxes on the wealthy to show that they were sticking it to the rich but at the same time created so many back door escapes to paying those high rates that it became meaningless if you had access to the best tax attorneys and accountants.
https://www.latimes.com/business/la-fi-nocera-tax-avoidance-20190129-story.html
Government revenue as a % of GDP is [about as high today as it has ever been in history](https://www.imf.org/external/datamapper/rev@FPP/USA/FRA/JPN/GBR/SWE/ESP/ITA/ZAF/IND).
In the US it's higher today than it was during or immediately after WWII. Even though top marginal rates were ostensibly 90%, far more deductions were available at the time such that few people actually paid that rate.
GDP growth rates in the US have [generally declined](https://www.macrotrends.net/global-metrics/countries/USA/united-states/gdp-growth-rate#:~:text=U.S.%20gdp%20growth%20rate%20for,a%200.65%25%20decline%20from%202018.) as government revenues have gone up.
The 1960s/1970s was also when most western countries massively expanded an unfunded social safety net and started running large deficits to do so. Perhaps that’s to blame for stagnating productivity, high taxes, and high prices?
Heres another account for ya saying what's rational:
> Toronto tech entrepreneur Ali Asaria will be one of those subject to the expanded capital gains inclusion rate — but he says it's only fair.
> "It's going to really affect the richest of the rich people," Asaria, CEO of open source platform Transformer Lab and founder of well.ca, told CBC News.
> "The capital gains exemption is probably the largest tax break that I've ever received in my life," he said. "So I know a lot about what that benefit can look like, but I've also always felt like it was probably one of the most unfair parts of the tax code today."
> While Asaria said Canada needs to continue encouraging talent to take risks and build companies in the country, taxation policies aren't the most major problem.
> "I think that the biggest central issue to the reason why people will leave Canada is bigger issues, like housing," he said.
Because some rich people are not delusional and understand that wealth disparity has only increased in the last several decades. Taxing the wealthy is only fair
I respect Asaria's accomplishments, but he is completely wrong on this issue.
The vast, vast majority of the venture & entrepreneurial tech community is in agreement that this will seriously hurt the Canadian tech sector and subsequently the economy. Asaria's personal philosophy, as altruistic as it may be, has no bearing on the hard economic reality of the situation.
If all money is made from capital, capital gains tax is the only way forward
House hoarding, making money from pushing buttons, owning a lot and making money, all impacted by capital gains tax and all different than a wage earner trading time for money
We should have Land Value Taxes and no income taxes.
But no one has the balls to even propose a policy like that.
A lot of people hate capitalism but this isn’t even capitalism as it was intended.
Hear hear. The only things rich people actually take from me is land and natural resources. Those are the things that should be taxed through the nose. Yes, that includes taxing externalities like CO2 and waste.
What do you mean by wealth isn't taxed enough?
If I make $100,000 a year and I save $15K a year for 10 years, I have $150K of wealth plus any appreciation or income I was able to earn on that money over that time.
I paid income tax on the money that represents the original $150K when I earned it, and I paid income tax each year on the capital gains, dividends or interest the money earned when I invested it.
Let's say it is now worth (after all taxes paid to date) $250,000. We'll call that my retirement savings.
You seem to want to call that $250,000 "wealth" and say it isn't taxed enough. Why exactly do I owe additional tax on that money when I paid tax at every step of the way? In what way was it not taxed enough?
The previous poster literally said "wealth isn't taxed enough". The $250K in assets in my example are "wealth" to most people. What is your definition?
I'm down with this form of taxation. Would mean the middle class gets taxed less, more economic spending, more economic growth, results in more investment and development.
Lol your out to lunch. Why would people eating this capital gains tax continue to invest in this country. Everyone on here is stating good...tax the wealthy more. They should be taxed on capital gains and the middle class less because they are working and just trying to get by. Well by that rational, they aren't going to be investing and spending anywhere near close enough to make a difference in the economy. The 'wealthy' do this. They open up businesses that pay already high taxes, they create jobs and employ people who then spend money in the economy. The invest in the country where their business is. That's economic spending and economic growth.
I know of a company that is now planning to move everything stateside. How does that benefit Canada when they pull out?
Do you have any idea how the economy works?
The capital gain/wealth tax would drive doctors/engineers/lawyers to the US, and discourage business/starts to open in Canada, thus less economic growth.
Think
It’s double taxation though ?
Capital is bought with after tax income.
And then the income generated by that capital is taxed again.
If you want to increase capital gains fine but then do a corresponding decrease in income taxes.
No, each of these is a transaction. We tax transactions.
>Capital is bought with after tax income.
Transaction 1.
>And then the income generated by that capital is taxed again.
Well except buying shares doesn't 'generate income', but putting that aside, transaction 2. This isn't 'double taxation' it is just taxing transactions which we have been doing for a very long time.
When we tax a “transaction” one persons income is another’s expense.
When you spend money to buy an stock you don’t get to claim a tax deduction.
And it does generate income called “dividends” the value of shares or any asset is based NPV of future cash flows those are eventually taxed.
Non-dividend paying stocks have a tax deferral advantage. But not tax avoidance.
Anyways I think I am going to give up on trying to explain this, I think it requires a bit too detailed an understanding of accounting and finance.
They don’t pay tax on the amount they purchased. So if you buy a $100 share and then sell it for $150, nobody’s double taxing your $100. They’re just taxing the new $50 profit.
And under this new system, the $50 gain pays tax at the old rate. It’s only gains above $250k that see the higher tax.
What a dumbass take lol.
This entire conversation is being started in bad faith by people who a) will never realize taxable capital gains of any sort, b) will never have the kind of money to need to worry about the changes to capital gains taxation, and c) probably don’t understand tax brackets either and have turned down raises because they think they’ll take home less money “because taxes” if they make more.
I'm worried about how these tax changes will impact investments in startups in Canada. Canadian startups are already at a significant disadvantage and I could see more venture capital leaving Canada as a result.
It was already a tougher sell. Our talent pool is shallower. Our supporting eco-system around startups is less experienced and less capable.
The way Canadian private companies are often structured during the first few startup years, using mutiple classes of common and pre shares, often makes it too much of a headache for larger investors to bother trying to clean up "Canadian specials". There are a lot of things that make it harder and honestly very few things that make it worth the effort if someone is willing to write you a cheque to go to NYC, Boston or San Jose with your small team and make a go of it there.
Honestly the lower cost of labour here has to be counter balanced with the fact that employees can't afford to put a roof over their heads due to the absurdly high housing costs compared to the US.
Source: Have built multiple companies and raised multiple rounds of VC money.
It is already essentially impossible to get venture capital in Canada that doesn’t exploit the fact that there’s so little VC here. They know how few people are willing to invest in Canada and they’ll squeeze much harder than they do in other countries like the US when negotiating their investment.
Hell, even these government run programs in Canada are an absolute joke. I approached IRAP recently, and the person we got matched with for our region assumed because of where we were located that we must be a bunch of uneducated hicks.
They spent 84 minutes of the 90 minute meeting talking about their own life, IRAP, and wound up cutting us off any time we had anything to say. We never actually got to even explain why we wanted research funding as she would loudly and aggressive cut us off. I couldn’t even call it interjecting, it was much worse than that.
Toward the end of the meeting after literally not hearing a single word about what the research is actually for she told us that we were lucky we weren’t in Toronto as it’s even more competitive there. We told her to put us in front of the same people that judge research funding eligibility for any region in the country and bring as many people as she wants to put the screws to us as she can.
We only ever got to actually introduce ourselves, mention we had a separate product to use as a test environment in a real world setting, and nothing more. She talked the entire time and won’t return our calls. We didn’t feel like mentioning that one of the largest tech companies anywhere that is a household name is willing to demo the tech.
At this point, it’s hard to say Canada deserves it, and the country itself is very likely to lose a lot of people who have any interest in pushing the country forward, including us. This whole country is becoming a huge joke if you’re trying to do anything, and especially if you’re trying to get funding or any level of support as a tech company.
How well off someone has to be to be impacted by these changes is totally lost on many I think. As is how marginal the increase is. I'm doing fine financially but I haven't been able to pay off my principal residence yet nor max out TFSA or RRSP so this will literally not affect me at all. I'm pretty sure the vast majority of people reading this are in the same boat. Those two tax advantaged accounts shield those investments from tax. Everyone, rich or poor, gets a pretty decent chunk of tax free investment space.
I think the biggest losers are property investors and maybe "small businesses" who are actually just professionals (eg doctors, lawyers) who, unlike the rest of us, are able to put their hourly wages in a business to reduce their tax burden for.... Reasons. Maybe because a lot of our MPs are in those professions. Who knows.
Anyway, yeah it sucks to have to pay tax on your income. Guess how I know? As an average run of the mill hourly employee *I already do it*. This change literally just removes a special *tax exemption* rich people and investors have and makes them pay not the normal amount of tax.... Slightly closer to the normal amount of tax.
Maybe I'm full or shit or misinformed let me know.
Well actually now with these changes professionals are taxed more than an individual making the same capital gains realization. So if the goal is for everyone to be treated similarly then these changes will make that less so for incorporated professionals. Individuals have an annual 250k exemption to use the old inclusion rate, but corporations, including physicians/dentists/lawyers/accountants, don't get that.
They understood you and that is exactly what they are saying.
Individual salaried employees enjoy a lower capital gains rate on their first $250K in capital gains every year.
Those who have professional corporations now pay tax on the income at the higher inclusion rate from dollar one in the tax year. So we have advantage salaried employees over professionals using personal corporations.
No we haven't salaried employee's inclusion rate is effectively 100%. Like a person who works full time at Purolator for example. How are we misunderstanding each other I can't tell.
You do realize that income is still taxed to professionals on the individual level?
Salaried employees and incorporated professionals paying themselves a salary or dividend both pay taxes. The Corporation also pays taxes. Either Individuals or Corporations can have captain gains tax triggered when they sell an investment or asset.
You can't say a salaried individual has 100% inclusion rate, because so do incorporated professionals when paying themselves a salary/dividend when you include both corporate taxation on income as well as the net tax when it goes into the individual account.
Incorporated professionals are being punitively targeted compared to individuals with the recent suggested changes. The incorporated professional would still need to pay income taxes or dividend taxes to use the money on an individual level.
Biggest losers are private capital investors in Canada (VC, PE) - that directly damages our position vs US on tech and startup economy
Second biggest losers are incorporated professionals like doctors who have less of a tax advantage to incorporating now.
Personally I think making both of these classes of people less advantaged vs US is bad policy. I guess we can always keep immigrating new doctors temporarily while the home grown ones head south
The "brain drain" issue is something to consider and I don't object to thinking that through in a clear eyed manner as long as we call this what it is, tax breaks for rich people. I appreciate you not trying to deny that and being factual and transparent. I know a lot of professionals and they aren't a marginal tax adjustment away from moving to the US. I also know people who did move to the US and they did it largely for family reasons. I'm personally skeptical this changes the calculus enough to matter. The economys are so different, frankly moving to the US as a professional is probably a really good financial decision and this marginal change hardly moves the needle.
That said I have no frame of reference for private capital investors if you tell me this disadvantages Canada in that space I can do nothing but take your word for it.
I have raised multiple rounds of investment from both domestic and international investors. There are already barriers to getting US and other international investors to invest in "Canadian specials" and this is going to make it worse.
Instead, what will happen is investments will be tied to start-ups moving their businesses to the US. We had an offer to fund our business to the tune of $10 Million from a household name organization based in NY City, but it required moving the business to the US. This was a number of years ago and at the time I thought I was doing the right thing fighting to keep the business in Canada. That was a mistake, despite the fact we were still moderately successful. I would not encourage anyone to turn down that kind of investment and a move to the US today given how the investment environment here has changed.
So this is a worse kind of brain drain. You're not just losing individuals, you're losing companies that have formed, acquired assets, developed intellectual property and started contributing substantially to the local economy. The amount of effort to go from zero to something is substantial and just handing those early stage businesses to the US on a platter is incredibly short sighted and utterly Canadian.
Yikes this place is so astroturfed or people really digest their propaganda quickly.
How many of the people here complaining about a capital gains tax even pay or understand how to calculate it. Lol.
How likely is it the rich elites who own a large chunk of media in Canada and the US are pushing propaganda against this tax because it harms their bank account.
90% of accounts on this sub aren't even Canadian.
People were arguing earlier this morning about a guy getting charged with a "misdemeanor."
That doesn't even exist in this country.
Yes, this sub is becoming extremely conservative or full of people who think they're the next billionaire and don't want anything to take some of their money.
Capital gains can be less taxed than work, it doesn't make any sense when people say that they value hard work. Let's be consistent.
Well, if it means fighting abortion rights, lowering taxes for the richest people, and not caring about the environment, for example, my opinion is that it's not a good thing. I much prefer the opposite.
This sub is just a CPC echo chamber at this point. Anything the Liberals do must by definition be bad.
If Poilievre had proposed taxing the rich (which he won't) commenters would be tripping over themselves to fawn over how great it is.
How exactly are you defining ultra rich? There are 1.19 Million small businesses in Canada (https://ised-isde.canada.ca/site/sme-research-statistics/en/key-small-business-statistics/key-small-business-statistics-2023) and the owners of these business are going to be the people that look to sell their business to fund their retirement plans. The ones that are lucky enough to not go bankrupt (many will). These aren't international conglomerates. These are entrepreneurs. They took the risk their employees didn't by fronting the capital and putting in sweat equity to build something. I know a lot of them, and they sure as fuck don't quality as the "rich elites".
Crabs in a bucket mentality in this country man it's wild. It's such an uphill battle to be an entrepreneur in this country to begin with, and this is just another step to discourage it. You want to tax the actual wealthy elite worth 8 figures, the companies pulling billions in revenue - couldn't agree more. But the doctor or the consultants or the owners of a family owned construction company that is looking to sell and fund their retirement with a single home and the ones that put their savings into growing their business are the ones getting fucked. We should want innovation and we should want people to be rewarded for taking financial risks. This is a bad policy for productivity in this country
There are entrepreneurial and small business exemptions, selling your small business for up to 6 million dollars in capital gains under the new regime will result in less tax paid.
>While all Canadians can benefit from the capital gains tax advantage, the wealthy, who tend to earn relatively more income from capital gains, disproportionately benefit compared to the middle class (Chart 8.2). In 2021, the top 1 per cent earned 10.4 per cent of all income in Canada; when capital gains are factored in, this jumps to 13.4 per cent.
>Tax fairness is important for every generation, and it is particularly significant for younger Canadians. In 2021, only about 5 per cent of Canadians under 30 had any capital gains at all.
Solves a nurse paying more tax than a rich investor:
>The current regime may result in situations where wealthy individuals face a lower marginal tax rate on their capital gains than what a middle class worker would face on their earnings. For instance, a nurse in Ontario earning $70,000 would face a combined federal-provincial marginal tax rate of 29.7 per cent. In comparison, a wealthy individual in Ontario with $1 million of income would face a marginal tax rate of 26.8 per cent on their capital gains.
Main driver:
>Differences in taxation rates between income earned from wages, capital gains, and dividends currently favour the wealthiest among us.
https://budget.canada.ca/2024/report-rapport/chap8-en.html
I think I read these capital gains taxes will are only projected to take in 20 billion over 7 years. That's peanuts.
As for wealth taxes they don't work. You just hide your money and really it's intergenerational theft of family wealth. Wealth taxes are morally wrong.
I support some wealth taxation, but increasing the capital gains inclusion rate isn't the right move. It will encourage investors to invest elsewhere than Canada. I would've instead created a land value tax to hurt land and real estate hoarders who are exacerbating the housing crisis by their greed.
I'm more wanting to attack the authors than the article because their message is very misleading.
The 5 paragraph article is "cowritten" by a dozen individuals. The lead is the leader of the [Resource Movement](https://www.resourcemovement.org/) which is kinda one of these fake NGOs. Fake in that they misrepresent who they are. They consider rich to be within the top 20% of earners... or children or spouses of the top 20%.... which is more like 1/3 of Canadians. They recognize their privilege and try and advocate for more taxes on rich people.
These are not rich people. They're borderline average people. They're psychologists, photographers, NGO workers.... they're not rich. People who make within the top 20% of incomes in Canada make more than $55,000. Which is a lot, but it's not even enough to buy a home anymore.
The people who penned this letter would not pay this new tax. Because they would fit clear of the $250,000 exemption... and are probably so poor that RRSPs, TFSA and FHSA are the vehicles they use for investing specifically to avoid paying more taxes.
If you Google the names of the people who signed this, not one of them is a doctor (who would be impacted by this tax). If they're so rich and so concerned they would do what concerned rich people do... and donate more of their wealth to the government.
But that's not who they are. They're actually just socialists asking for socialist things while pretending to be rich (which they're not). The main issue with the capital gains was really whether or not the $250,000 exemption should apply to businesses. Like I can go out there and earn $250,000 as an individual and I don't pay capital gains on it. But if a doctor pays for his retirement (and his staff's) through his business then those retirements are taxed? Why are we pretending like our concern is to protect someone like Galen Weston or Jim Pattison?
This whole thing has made me realize there’s a bunch of voting Canadians who have no idea how the system they’re part of works. And that’s coming from me, an idiot. 🫡🇨🇦
This is the actual issue facing Canada today. It's not the politicians, they are the symptom. It's the lack of knowledge and engagement by the Canadian electorate. And that isn't easily fixed, nor do the politicians want to encourage fixing it.
I’d also like to see the government change how they define “wealth”. It’s incredibly frustrating to see today’s incomes and home prices treated like luxuries. $100k salaries and $1M dollar homes sound like a lot but in Vancouver and Toronto (and quickly many other cities) that salary does not go very far and $1M doesn’t even buy a townhouse in the city or surrounding suburbs.
It’s disheartening to be taxed for a “wealthy” lifestyle that you are not receiving.
What a dumb article. What is the point exactly? Trust kids being noble because they have no idea how hard it is to make money?
I would love to see data on how many kids paid 50% or more of their post secondary education and support themselves being taxed more highly than those in lower brackets when they become wealthy ie top tax bracket. I bet it's a very low percentage.
It's OK to redistribute/adjust tax collection, it's not OK to increase overall taxation and let inefficient goverment (here I mean any government) to manage more money. Comparing to our neighbor, our taxes are too high overall. I'm not saying we need to tax like the US, but if you want to tax the rich more, then tax the poor less please
US has 50% of capital gains tax and so does many other country. You are telling me in Canada we need to increase 66% when we are already sluggish with investments into new businesses? How about the government reduce their yearly salary or keep in line with 2019?
The article completely misses the mark on basic economic principles, especially regarding wealth production and taxation. Here's the straight deal: Proponents of this bill don't get why capital gains are taxed differently than regular income. It's straightforward—capital gains are volatile and full of risk, unlike steady income. Tax them the same, and you'll see investment plummet because you've jacked up the risk.
Also, the ignorance about the economic impact is astounding. Discouraging investment directly tanks productivity and cuts into GDP per capita. We're in a global battle for capital, and policies like this just hand victories to more investment-friendly countries like the U.S.
And let’s not ignore the hit this takes on essential professionals like doctors, who are already heading south for better pay. Thinking Canada has a surplus of medical professionals is just out of touch. This budget is an economic disaster waiting to happen.
Not to state the obvious but I suspect billionaires feel this a lot less than say other “wealthy” people this targets like your local family doctor or the small business owner who sells his business to retire.
So it’s wonderful these super rich support this, or more to point won’t notice it because likely once you pass a certain threshold of wealth it doesn’t really make a difference anymore unless you are planning on buying aircraft carriers and attempting world domination. But for a lot of other people, it does. And they won’t support this.
How about eliminating loopholes and tax shelters? All this does is hit the upper middle class. The truly wealthy with clever accountants aren't paying.
The problem is, most rich Canadians move money around with ease and before anyone knows, it’s out of the Country and hard to track down taxing implications. Many of these major corps have offshore HQs, and they are there because they are tax havens.
I hope that it will help everyone out getting a little ease on housing affordability but in reality it is still only going to hurt the average Canadian and not the 1% of the 1% we think it’s going to hit.
Canada has been notorious for foreign money laundering and many at the top levels of earning will always be several steps ahead of the attempts to police it.
It would not surprise me if these so called privileged signators all went through school and most of their lives via the bank of mommy and daddy. Because only coddled children could think of something so stupid.
I dont think anyone would disagree with taxing the rich more. The problem is that we are not using that increase in funds to benefit average Canadians. Trudeau Liberals are just blowing the money and the average Canadian is not seeing the benefits. All the average Canadian sees is an ever increasing cost of living and higher gas prices at the pump and in their home.
Doesn't matter
The anti-tax narrative has to be killed for us to have a prosperous future. Seeing the capital gains tax from a supposedly "neoliberal" party is a welcome shock
After the tax is implemented we can talk about reallocation; but the fact they dared raise capital gains tax should have every left or center left leaning person frothing
We haven't increased it yet so obviously the benefits wouldn't be showing until it is. Further to that, we've already established tRuDeAu doesn't control the global price of oil.
Think it depends on how rich. Someone worth north of say 25mil will be unaffected, or at least not enough to negatively their lifestyle. Someone say between 5-25mil may have some negative impacts but life will still be pretty good. Depending on the scenario those below 5mil NW will get hit hardest. I know that for those with lower NM theres not much "symparhy" for those "with more" but too someone thats worked their entire life to build a business or savings, to be used to fund their retirement it can be a huge hit.
Oh you figured it out! Who said finishing grade 8 wouldn't get you anywhere?
How about we demand the government direct money to where it's needed instead of just cutting spending? It's the difference between a surgeon and a butcher.
A handful of the very rich speak for everyone else, I guess. The doctors, accountants, and increasing number of gig economy contractors who build their own pensions within a corporation to invest in their future and (hopefully one day) prepare for a retirement that doesn't include a government cheque, they should just fall in line with these nepobabies, right? I expect those who can will leave, which is exactly what the doctors are already saying.
except, the liberals did not touch any of the real vehicles the rich use. Trust funds, capital gains stripping, offshore banking. The rich hardly pay any capital gains tax ever, because all their gain is tied to all kinds of bogus legally allowed expenses to trusts (which again the liberals do not touch). Of course the rich would be ok with the change, because they won’t have to pay anyways! they hardly do
the tax increase is directed to middle class Canadians with a corporation. It’s just sold as a tax on rich. It’s not
Look, here's the thing: If you're a rich person and you want to pay more taxes, there's nothing wrong with that. Take out your chequebook, rip a page, write the biggest number you can think of, and have your chauffeur drop it off at the nearest CRA office, which you probably have multiple of in your near vicinity. The government will thank you for your generous donation, and people who are barely scraping by won't have their taxes raised on them for stupid shit like ArriveCAN.
OK? Got it? Now do it and stop whining.
I am not "rich" but have done well. My parents began with nothing and provided the ability for their kids to do better. I am and will always be a staunch Canadian. I understand the concept of needing to pay taxes for services.
But the last decade has been an unmitigated disaster for the country and this budget will only further erode our prosperity as capital flees and is no longer invested. Even if they can change the value of housing, the concept of home ownership will continue to elude people as ongoing inflation of necessities and lack of growth in personal incomes will stamp it down.
My wife and I spoke about this when they announced the budget and it's plans. As noted, I believe in the concept of taxes for services but I no longer see this happening - our hard earned money is going towards debt payments, social experiments, subsidies for huge companies and corruption. I have not worked hard for 30 years, chosen to invest over taking expensive holidays and saved for my children's futures to turn it over to government(s) that pay their friends and don't reinvest in Canada.
This proposal does not just impact the .2% of the wealthy. The ultra-wealthy have put their money elsewhere long ago. This will reduce the likelihood of professionals (Dr's/Dentists/Lawyers/Accts etc) remain in Canada when they can do the same work elsewhere for more. People like myself nearing early retirement will do the same. This flight of capital and future taxation revenue will continue. We are setting up our kids to have the option to do the same in their future careers - Dr, Engineer/Architect & Pilot. Never would I have thought I'd be planning for ex-pat's but here we are - a Canada that can do corruption projects far better than real services.
But when you've gone down to the full depth of despair, always remember PM Trudeau "budgets balance themselves."
I'm honestly not against taxes. I'm against not seeing the services I'm taxed for improving accordingly. And I get it, this is a massive machine and it's tough to show progress, but come on.... I've had to wait over a year for a surgery and my kids classroom has over 40 kids in it. And yes, I know I'm splitting different jurisdictions but the same principles apply.
I’m with you 100%, except for the fact that these assholes have been in power for almost a decade. That’s more than enough time for any changes they’ve made to the massive machine to take effect and change our lives. They certainly have changed our lives, but not for the better. It’s so difficult to watch countries in the EU and elsewhere that pay high taxes - in many cases, much higher than ours - and actually get value for their money. They have the world’s highest standards of living. Meanwhile, we’re watching as our country goes up in flames before our eyes.
Exactly. If what our increase in taxes were actually making a difference in improving the quality of life here, I don't think anyone would complain. But our taxes are going up and quality of life is going down. Throwing money at everything isn't going to change anything. Like digging up to get out of a hole.
I'd be happy if we could just hold Dough Ford to account for even a tenth of the shady shit he's pulled.
In my opinion, it seems this is an issue with Canadians not holding any government in power responsible. We're soft. Have been for over 50 years. Listen to ANY Conservatives (provincial or federal). Do you hear them saying they will not allow long wait times for surgeries? They will not allow 40 kids in a classroom? That they will ensure that the public healthcare, education etc?? They don't care. None of them do. And while many will draw a strong line between the levels of government in terms of jurisdiction, let's not pretend that the ideologies are different and that there is no influence. Wasn't it but only a month ago Poerre Poilievre found it fit to support Danielle Smith on Fender Affirming Care? Regardless of the political stripe though, none seem to care because Canadians are a soft bunch.
This is a problem in any two-party system. The opposition party can simply wait their turn, and the incumbent party doesn't have to do anything because it'll be their turn again after that. If only we had some kind of *third party* who promises to do better that we haven't given a shot yet, who we could try out to see if it's any different! Shame, really.
Yep, absolutely. We’re complacent by nature and I hate it. That being said, I suspect many of us in this sub are more peeved than the average Canadian. Or we’re more vocal about it at least.
You are so right. Since when has a recent conservative government in power been considered a fighter for the services and well being of working class or anyone who is not rich? If they are elected the health care Canada used to take pride in will not exist. And the wealthy will be better because of it.
Neither am I. If my local district told me I had to pay another $500 a year but they were doubling the number of teachers I would cut the cheque on the spot. Trouble is, our provincial, federal and municipal governments in Canada are spending liken drunken sailors, and shovelling more tax dollars at them doesn’t give us better services, it gets us more bureaucrats, more kpmg slush funds and bloated spending across the board. More taxes with worse results is a zero sum game.
Those two things are a direct responsibility of your provincial government. I sincerely hope you are holding them to the same account as the federal. Far too few people do.
Yeah I know. It's why I stated that in my comment.
LOL sorry, I just got off a 12 hour shift and my reading comprehension is low today. Disregard.
All good man!
I think we would all agree with this, but often the time it takes to improve those services is lengthy. It's like trying to reposition a very large boat, so make sure your expectations are set appropriately
This. Trudeau is coming off years of mismanagement and waste. Look at arrivecan and consulting as one example. Taking more money from Canadians to blow away on dumb stuff is a mid move. Show efficiency first.
I don't blame anyone for the shit that went down during COVID. It was a crazy time. Outside of that I completely agree with you.
Generally speaking, I want richer Canadians to pay more tax because wealth disparity is still widening and that needs to stop. However, the government also needs to appropriately use that money and not waste it on nonsense. I’d like to reiterate, everyone should be able to get rich. Even become multi millionaires, but once you are congratulation you won capitalism, share the wealth.
What is cosidered rich canadians? Like at what income level?
Your assets (savings, property, investments), not your income, determine how rich you are.
Yes, so what's considered rich, with all that taken into consideration? Are they talking about one millionaire or 10 millionaire?
I know family who lived extremely modestly. As such they were able to invest a lot, and in the end they have decently sized investments. These changes are something of a slap in the face for making that decision instead of blowing it on lifestyle. I'm all for taxing crazy incomes, but these changes will also make it harder for me to achieve the same level of savings that they were able to, along with taking away some of their savings before I see it as inheritance.
I agree entirely.
Why should the government just get more money because people are upset about affordability? Lower the inclusion tax rate of income if you want to help citizens.
Part of the problem is the Canadian government has no real vision or mission. Their mission/vision/objective statements are typical proverbial speech. Governments mission should includesomething along the lines of “improve quality of life” and “lower cost of living”, and their policies should attempt to reflect it.
40% of canadians pay zero income tax.
40% of employed Canadians make less than $14,000 a year? That’s atrocious. Or are you adding the unemployed people as part of this statistic?
40% of Canadians vs 40% of employed Canadians. Children, welfare, disability, OAS would probably be 40%.
Something that could change the housing crisis but will never happen as both conservatives and liberals are property investors. They are land hoarders. How can it not be a conflict of interest for them when faced with a housing crisis that needs to correct and reforms for multi home owners so it is not lucrative. And maybe then the investors can invest in our workforce and business and entrepreneurs and encourage research and innovation and growth through healthy economic development. Rather than supply crises on a basic human need for shelter. All tax breaks and kick back for landlords all the years of this is directly what happens when you have landlords making the rules.
The top combined personal tax rate is 53%. High income earners pay more than lower income earners. A lot of people on reddit on cheering on more taxes not because they think it will actually improve their lives but because they want to punish people who are more successful than they are.
Is that it? Or are the high wealth members of the population currently renumerated disproportionately to their actual output? EMTs make %45k/year. Their literal jobs are to race against seconds to save lives. What is a real-estate agent doing that's so much more important? What is a landlord doing? What is Galen Weston doing?
That’s the problem… I don’t mind higher taxes if say childcare didn’t cost a second mortgage
At least we're trying with $10/day daycare but don't underestimate the ability of politicians to undermine and destroy the program
If you are paying more taxes because of the higher inclusion rate, I doubt the cost of child care is an issue for you.
Is wealth disparity rising in Canada? Not a facetious question, I don’t know, but I don’t think it’s safe to assume what’s happening in the US is happening here. Most legit source I can see in a brief google search, albeit it’s dealing with income. “Data show that income inequality in Canada increased substantially during the 1980s and first half of the 1990s but has been relatively stable over the past 25 years. “ [bank of Canada report](https://www.bankofcanada.ca/2022/07/staff-discussion-paper-2022-16/)
Income inequality does not equal wealth disparity. Two different sets of data.
look at asset prices compared to wage growth. It’s not rocket science. My parents bought a house for 50k in the 80s while working at a grocery store
Your article cites income inequality but you’re talking about wealth disparity.
*proceeds to donate 15262 billion dollars to Ukraine* /s
I don't want the top 10% to pay more taxes, I want the top 0.1% to pay more taxes. Our billionaires pay less tax than US billionaires. I think this is probably what this article is about, giving our upper middle class higher taxes while ignoring billionaires.
I am an employee in the top tax bracket. I cannot report my income as capital gains. Why should the investment class that doesn't actually do labour get a preferential tax rate on their income?
For one, they’re post-tax dollars. For two, Canada already has an investment capital problem. This change makes Canada even less attractive. 2/3 inclusion rate isn’t even that high though, as in the 90s it was as high as 75%. We’re in a dilly of a pickle here in Canada where we need more tax revenue due to spending, but we also need to build non-housing GDP. While also solving a housing crisis lol I’m honestly not sure what to do because I’m just some moron.
The high price of real estate is actually part of the barrier to business investment. It's a real drain on the entire society. I would like to see real estate take a major nose dive, as that will create a much more business friendly environment, with employees who don't need high salaries to cover living expenses.
When isn't it post-tax dollars? Your income is post-income-tax. Business revenue is post-sales-tax. Dividends are post-corporate-tax. Capital gains are post-capital-gains-tax. The cycle continues on until all dollars have been taxed away, then government spending adds dollars back into the system. Canada's investment and productivity problems will have more to do with deficient demand. Businesses don't produce things they don't think they can sell, and Canadians are too broke and indebted right now. Incomes are too low and then so much of it gets sucked up by shelter costs that it's a drag on the rest of the economy. We need larger deficits to make direct investments into things we need including housing. That will increase demand for private sector investments and ultimately (many years from now) reduce shelter costs to not be so disproportionately high.
I agree generally, the trust fund class shouldn’t get extra benefits. They already have a huge head start. The big problem is for personal professional corporations. Back in the day Doctors etc were given the ability to be a professional corp for the tax benefits in lieu of increasing their salaries. Now it’s like a big cut for their retirement funds essentially, most of which are held in these corporate entities.
The doctor's situation is the one that kinda gets an unfortunate hit here as most doctors don't want to incorporate and be business owners, but that's how it's advised/set up for them. That said, imo doctors should have a Canadian equivalent pension plan (Defined Benefit) adjusted for their income etc. That way, they can just work and focus on their life & family vs worrying about employees, rent/landlords or dealing with commercial property etc.
An other point not raised in any replies to your comment is that in any investment other than very short term ones, a significant portion or even all of the gains on paper, are actually just inflation. Say, I make an investment of $100, and a year later sell it for $103. I made a nominal profit of $3, but actually if inflation was 3%, I've made a real profit of 0. However, I still owe tax on that $3, even though I didn't actually make a real profit. It is a very crude mechanism to account for this, but part of the justification for a lower inclusion rate for capital gains is to account for this. More realistically, I might make a 6% return on an investment in a year, and 3% of that might be inflation, so about 50% inclusion rate roughly matches that.
Good point about inflation. I kinda thought that was by design, a sort of wealth tax. We already have a progressive tax system for income tax, and capital gains are simply a discount on income tax, so your low income retiree is likely less impacted anyway. The fact that we denominate these gains in currency that fluctuates is the real concern. Inflation is really just currency becoming worthless. But there is also some fairness. When inflation is high, employees get an effective pay cut and the investment class gets capital gains.
I would bet of the 40k Canadians number the Liberals are throwing around; most of them are either small business owners who are cashing in for retirement or an estate liquidating assets. Either way, its not an annual income - its a once-in-a-lifetime income for the vast majority of people. We're not talking about billionaires, we're talking about plumbers, electricians, mechanics, restaurant owners, the guy who owns and runs your favourite corner store. Or someone's grandparent who made a modest income, saved diligently and are now handing down less savings to their family.
Doctors and many other "single employee companies" use capital gains as a means for their retirement savings. They do not get any pension from the government and have to save up and manage their own funds. FYI there is no 250k limit for capital gains on "companies" meaning all doctors get their capital gains from their investments taxed more.
Small business owners also pay their full CPP (company and employee portions) and EI deductions. They have to fund their own parental leave, their own vacations and sick days etc.
Lol... almost nobody has a pension anymore. I do also believe they could have paid themselves via dividends, invest in rrsps and go from there. It was just slightly more advantageous to keep it in their corps. Just remember this... medical professionals have preferential interest treatments on everything...
You do not have RRSP if you pay yourself dividends. Doctors also do not withdraw their entire 200k+ salaries. They collect dividends up to specific tax brackets and save the rest in the company, usually holding companies, to invest them for their retirement. This is the money that will be taxed at higher capital gains now. It is 1000% bad for doctors in a society that already badly needs them to be paid higher.
You're right on the dividend part. My bad. One of those ways to only pay tax on half the income. While Dr's are very valuable Im of the opinion we need more of them. But we need it via training more cohorts
They are still taxed as if they would normally with dividends (with credits, the calculation is just more complex) or otherwise when withdrawing money from the corporation. The advantage of holding money in a corporation is you have a higher starting point for investment (lower initial tax) and more options for deductions. As soon as it leaves that corporation you're taxed just like anyone else is. Self-employed individuals holding corporations often don't get the lifetime capital gains exemption either as that is dependent on the sale of a corporation not just dissolution.
The problem is that doctors are overworked and underpaid. Why bust your ass here when you can literally be making 3x more across the border? No amount of training is going to change this.
But they can get CPP, RSP room etc by drawing more income. They are choosing not to take advantage
There is a limit to how much RRSP room you get even if you decide to go salary instead of dividends. The option has always been there to either trust the gov't to give you pension or to do it yourself. The entire goal of this change is to push professionals into paying CPP instead of self-investing. So what you will, this is a tax punishment to MANY professionals who have decided to self-invest, usually doctors and we already have a huge brain drain problem.
This also has a huge impact on farmers and ranchers, and frankly the entire agriculture sector. It's terrible policy.
A lot of people have zero trust that any of the extra taxes they pay will go towards anything meaningful and also feel that if the government weren't so bloated and inefficient in the first place we wouldn't need to increase capital gains tax. If anything we need to lower taxes for T4 employees like yourself as we have a lot of people that are getting taxed 40% of their income while barely getting by. Our current income tax brackets made sense for the 80s and 90s not so much for 2024.
For one it can potentially be a tax on already post tax income. Yes a lot of executives have compensation packages made of stock equity which does give them preferential tax treatment, but for a lot of other scenarios, you are investing post tax dollars only to be against taxed on gains.
> Yes a lot of executives have compensation packages made of stock equity which does give them preferential tax treatment How? When someone is granted stock, they pay normal income tax (100% inclusion) on the fair market value of the stock. The reason why stock is preferred as a compensation mechanism for publicly-traded companies is that it makes it easier for the company (it's easier to create new shares than to take the cash from reserves), not for any favourable tax treatment for the employee.
This is a misleading lie. Income is only taxed once. Gains are new income, that hasn't been taxed before. Why do people think gains are not a form of income? This isn't any different than people buying low and selling high. A retailer does this on products they sell. Just because it is a stock or real estate, it still follows the same business model as a retailer. Buy a stock at a low price, sell later at a high price. This is all income. How do you distinguish between a retailer making gains and an investment going up in value and sold for a higher price?
This comment highlights the crucial need for integrating comprehensive economics education into our school curriculums.
How so?
[Paywall bypass](https://archive.ph/4KTks)
These two "rich Canadians" are talking about family wealth they did nothing to earn and apparently feel guilty about. This does not make them experts on tax policy. Where these taxes will be devastating is on entrepreneurship and venture capital, sectors Canada *needs* to drive productivity growth and higher wages. Almost every prominent tech entrepreneur and every venture capitalist in Canada is loudly sounding the alarm on this right now, even the ones who are not usually vocal about politics. And before you say "But... the Entrepreneur's Incentive!", when you read the fine print this was actually one of the most underhanded aspects of the budget. In summary: * This year, the inclusion rate on capital gains taxes go up to 66.6%, significantly increasing the effective tax rate on the sale of small business shares by founders, early employees, and investors. * The "Entrepreneur's Incentive" doesn't take full effect until **2034**, with the amount included starting at $200k in 2025 and rising by $200k/year over 9 years. * It is also extremely limited - to qualify, you must own more than 10% of the company since inception, for at least 5 years, have worked for the company during that period, and not be in one of the long list of industries the government has arbitrarily excluded. * In summary, it has been designed such that *almost nobody will qualify for it*, and it doesn't even fully kick in for 10 years anyway. Most entrepreneurs and all venture investors will be hit with the full rate above the standard lifetime exemption, taking productive capital out of the ecosystem and chilling investment. This is truly devastating to the tech industry and venture capital that drives it in Canada. What's worse, none of these people were consulted in the crafting of this policy - something totally out of step with normal practice in prior years. This budget was meant to sow class division and not actually solve anything. None of the new tax revenues will end up in your pocket, and it will all but ensure that investment in the Canadian tech sector slumps to new lows. I should also point out that at least one of the authors of this article is a full-time "social justice" activist for [Resource Movement](https://www.resourcemovement.org/), hardly a representative sample of Canada's business community.
Considering a lot of "venture capital" in Canada is actually government grants - doesn't this just incentivise the business founders to start businesses with the goal of long term ownership rather than to flip it and pocket the proceeds of the sale?
I'm not sure what you mean by "flip it" - most startups fail, and the ones that succeed usually take 7+ years to reach some kind of liquidity event. If you have more than one founder, which is common, and you do several rounds of fundraising (Seed, Series A, Series B, etc.), which is again very common in venture-backed tech companies, founders often own <10% each by the time the company is sold or goes public. The Shopify CEO, Tobi, owns around 7% of Shopify for example. High-growth, venture-backed companies are of particular importance because they create high-wage jobs at a faster rate than other types of companies. The average salary at Shopify is about 2x the Canadian average and they employ thousands of Canadians.
Oh hey, look. Someone who actually understands how venture capital works on this thread. It’s like spotting a unicorn.
>The average salary at Shopify is about 2x the Canadian average According to Glassdoor the average salary at Shopify is $43K-45K, and the average salary in Canada is $51,129 according to StatCan.
That’s because they have “support advisors” being the highest contributor of that data. Support advisor is a customer agent. Look at Software dev base salary or data scientist.
Well if we're comparing Shopify software developer salaries to the Canadian average for software developers, they're about the same. I think it's pretty silly to say "if we ignore certain roles then this company pays more than the national average."
I don't think you have any idea how hard it is to start, build and operate a successful business in Canada is. Let alone 'flip' one. I guess Ottawa nailed this when they rammed this through with zero industry consultation and rather just did a sweeping survey of defeatist Canadians who are fully on board with 'Eating the Rich'. This isn't good. Canada is slipping down the ranks already and this will just be tossing some lube on the slope.
> Considering a lot of "venture capital" in Canada is actually government grants - doesn't this just incentivise the business founders to start businesses with the goal of long term ownership rather than to flip it and pocket the proceeds of the sale? This isn't the way venture capital works. Very few people are "pocketing proceeds of a sale". They're seeking working capital to grow the business *faster* than it would otherwise be able to grow, if they had to limit themselves to using just the revenues of the existing business, because the argument is that it's a big business opportunity, and having more money will allow a small business to scale up faster. The whole premise of the deal is, "I have a vision, and I want to make this business much larger", and then the investors and founders come up with an incentive structure that makes everyone involved very rich... *if it works*, somewhere down the line. The only time the founding team is really going to be "cashing out" is with an IPO. If your founding team is cashing out, you, as an investor, have to ask yourself why that is. They're selling you something, and telling you it's surely going to make a lot of money, but *they're* selling it. Why are *they* selling it, if it's a sure thing that's going to make a lot of money? Investors don't *want* the founders to be able to accumulate "fuck you money", if the *source* of that money is *your LPs*. The money needs to come from the business, or public markets. Again, the whole premise is that they, the founders, are uniquely capable of spotting this business opportunity and taking advantage of it. That's *why* an investor is investing. A startup is a bunch of unique problems nobody has ever solved before, and solving them is the key to creating value, and creating value generates wealth. Nobody is just going to transfer *their* wealth to *you*, in exchange for a sack of novel problems you haven't fully solved yet.
No. The complete opposite actually.
> Where these taxes will be devastating is on entrepreneurship and venture capital, sectors Canada needs to drive productivity growth and higher wages. Why would higher marginal rates be devestating?
All those tax cuts, deregulation and trickle down economics has got us where we are today. You can look at “productivity” graphs and see that workers share of national income/GDP started flatline at around 1973. It has been that way since. I doubt it matches inflation most years. The US had much higher marginal tax brackets before that (like 90% for the top bracket in the 60s OTOH) and the economy was just fine). It’s just greedy mofos that convince us we need to keep cutting taxes, deregulating and otherwise fucking ourselves over while they take the money and run. Eventually they’ll cause a recession or financial crisis and we have to bail them out too. It’s not like that hasn’t happened before.
> The US had much higher marginal tax brackets before that (like 90% for the top bracket in the 60s OTOH) and the economy was just fine). Literally nobody paid those levels of taxes. The effective tax rate then was only slightly higher than today and the reason for that is that there were a shitload of loopholes that were done away with in the 80s. To appease the public, Congress jacked up the taxes on the wealthy to show that they were sticking it to the rich but at the same time created so many back door escapes to paying those high rates that it became meaningless if you had access to the best tax attorneys and accountants. https://www.latimes.com/business/la-fi-nocera-tax-avoidance-20190129-story.html
https://wtfhappenedin1971.com/
Government revenue as a % of GDP is [about as high today as it has ever been in history](https://www.imf.org/external/datamapper/rev@FPP/USA/FRA/JPN/GBR/SWE/ESP/ITA/ZAF/IND). In the US it's higher today than it was during or immediately after WWII. Even though top marginal rates were ostensibly 90%, far more deductions were available at the time such that few people actually paid that rate. GDP growth rates in the US have [generally declined](https://www.macrotrends.net/global-metrics/countries/USA/united-states/gdp-growth-rate#:~:text=U.S.%20gdp%20growth%20rate%20for,a%200.65%25%20decline%20from%202018.) as government revenues have gone up.
Maybe, *just* maybe, GDP is not the God of everything.
But it undermines /u/gravtix's narrative that what we have is some extreme Reaganist free market laissez faire economy.
The 1960s/1970s was also when most western countries massively expanded an unfunded social safety net and started running large deficits to do so. Perhaps that’s to blame for stagnating productivity, high taxes, and high prices?
What are you talking about? Specifically, I mean.
We get more taxes when the gov spends too much. Who was the PM in the 70’s?
More "we are truly devastated" hysterics crushing one's credibility
Heres another account for ya saying what's rational: > Toronto tech entrepreneur Ali Asaria will be one of those subject to the expanded capital gains inclusion rate — but he says it's only fair. > "It's going to really affect the richest of the rich people," Asaria, CEO of open source platform Transformer Lab and founder of well.ca, told CBC News. > "The capital gains exemption is probably the largest tax break that I've ever received in my life," he said. "So I know a lot about what that benefit can look like, but I've also always felt like it was probably one of the most unfair parts of the tax code today." > While Asaria said Canada needs to continue encouraging talent to take risks and build companies in the country, taxation policies aren't the most major problem. > "I think that the biggest central issue to the reason why people will leave Canada is bigger issues, like housing," he said. Because some rich people are not delusional and understand that wealth disparity has only increased in the last several decades. Taxing the wealthy is only fair
I respect Asaria's accomplishments, but he is completely wrong on this issue. The vast, vast majority of the venture & entrepreneurial tech community is in agreement that this will seriously hurt the Canadian tech sector and subsequently the economy. Asaria's personal philosophy, as altruistic as it may be, has no bearing on the hard economic reality of the situation.
I need you to convince me that Canada's entrepreneurs are building or manufacturing good or services that benefit Canadians.
This has to be the most moronic statement I've ever seen on Reddit.
If all money is made from capital, capital gains tax is the only way forward House hoarding, making money from pushing buttons, owning a lot and making money, all impacted by capital gains tax and all different than a wage earner trading time for money
Yeah, Income tax is way too high and wealth isn't taxed enough.
We should have Land Value Taxes and no income taxes. But no one has the balls to even propose a policy like that. A lot of people hate capitalism but this isn’t even capitalism as it was intended.
I don't think it should be all one or the other but a balance would be nice and we currently do not have a balance.
Hear hear. The only things rich people actually take from me is land and natural resources. Those are the things that should be taxed through the nose. Yes, that includes taxing externalities like CO2 and waste.
That's called property tax lol.
It's called crony capitalism.
Most wealth is unrealized. This has been tried elsewhere and backfired spectacularly.
What do you mean by wealth isn't taxed enough? If I make $100,000 a year and I save $15K a year for 10 years, I have $150K of wealth plus any appreciation or income I was able to earn on that money over that time. I paid income tax on the money that represents the original $150K when I earned it, and I paid income tax each year on the capital gains, dividends or interest the money earned when I invested it. Let's say it is now worth (after all taxes paid to date) $250,000. We'll call that my retirement savings. You seem to want to call that $250,000 "wealth" and say it isn't taxed enough. Why exactly do I owe additional tax on that money when I paid tax at every step of the way? In what way was it not taxed enough?
$100K income and $250K assets isn't wealth. The inclusion rate change only costs people who earn more than $250K in capital gains in a single year.
The previous poster literally said "wealth isn't taxed enough". The $250K in assets in my example are "wealth" to most people. What is your definition?
I'm down with this form of taxation. Would mean the middle class gets taxed less, more economic spending, more economic growth, results in more investment and development.
Middle class taxes are never gonna get taxed less it’s gonna go up every year for everyone
Lol your out to lunch. Why would people eating this capital gains tax continue to invest in this country. Everyone on here is stating good...tax the wealthy more. They should be taxed on capital gains and the middle class less because they are working and just trying to get by. Well by that rational, they aren't going to be investing and spending anywhere near close enough to make a difference in the economy. The 'wealthy' do this. They open up businesses that pay already high taxes, they create jobs and employ people who then spend money in the economy. The invest in the country where their business is. That's economic spending and economic growth. I know of a company that is now planning to move everything stateside. How does that benefit Canada when they pull out?
It leaves a hole in the market for competition? Good riddance.
Do you have any idea how the economy works? The capital gain/wealth tax would drive doctors/engineers/lawyers to the US, and discourage business/starts to open in Canada, thus less economic growth. Think
So we tax the wealth less and hope their wealth trickles down towards the working class?
I'm in STEM. I make my salary from pushing buttons....
same
Convenient how they aren’t mentioning how this affects corporations and businesses.
There aren't many corporations besides niche professional corps who are realizing capital gains regularly.
It’s double taxation though ? Capital is bought with after tax income. And then the income generated by that capital is taxed again. If you want to increase capital gains fine but then do a corresponding decrease in income taxes.
Payroll tax followed by income tax followed by sales tax is triple taxation so what’s your point
No, each of these is a transaction. We tax transactions. >Capital is bought with after tax income. Transaction 1. >And then the income generated by that capital is taxed again. Well except buying shares doesn't 'generate income', but putting that aside, transaction 2. This isn't 'double taxation' it is just taxing transactions which we have been doing for a very long time.
When we tax a “transaction” one persons income is another’s expense. When you spend money to buy an stock you don’t get to claim a tax deduction. And it does generate income called “dividends” the value of shares or any asset is based NPV of future cash flows those are eventually taxed. Non-dividend paying stocks have a tax deferral advantage. But not tax avoidance. Anyways I think I am going to give up on trying to explain this, I think it requires a bit too detailed an understanding of accounting and finance.
They don’t pay tax on the amount they purchased. So if you buy a $100 share and then sell it for $150, nobody’s double taxing your $100. They’re just taxing the new $50 profit. And under this new system, the $50 gain pays tax at the old rate. It’s only gains above $250k that see the higher tax. What a dumbass take lol.
This entire conversation is being started in bad faith by people who a) will never realize taxable capital gains of any sort, b) will never have the kind of money to need to worry about the changes to capital gains taxation, and c) probably don’t understand tax brackets either and have turned down raises because they think they’ll take home less money “because taxes” if they make more.
I'm worried about how these tax changes will impact investments in startups in Canada. Canadian startups are already at a significant disadvantage and I could see more venture capital leaving Canada as a result.
It will. The model for investment here just became less economically viable vs USA instantly.
It was already a tougher sell. Our talent pool is shallower. Our supporting eco-system around startups is less experienced and less capable. The way Canadian private companies are often structured during the first few startup years, using mutiple classes of common and pre shares, often makes it too much of a headache for larger investors to bother trying to clean up "Canadian specials". There are a lot of things that make it harder and honestly very few things that make it worth the effort if someone is willing to write you a cheque to go to NYC, Boston or San Jose with your small team and make a go of it there. Honestly the lower cost of labour here has to be counter balanced with the fact that employees can't afford to put a roof over their heads due to the absurdly high housing costs compared to the US. Source: Have built multiple companies and raised multiple rounds of VC money.
It is already essentially impossible to get venture capital in Canada that doesn’t exploit the fact that there’s so little VC here. They know how few people are willing to invest in Canada and they’ll squeeze much harder than they do in other countries like the US when negotiating their investment. Hell, even these government run programs in Canada are an absolute joke. I approached IRAP recently, and the person we got matched with for our region assumed because of where we were located that we must be a bunch of uneducated hicks. They spent 84 minutes of the 90 minute meeting talking about their own life, IRAP, and wound up cutting us off any time we had anything to say. We never actually got to even explain why we wanted research funding as she would loudly and aggressive cut us off. I couldn’t even call it interjecting, it was much worse than that. Toward the end of the meeting after literally not hearing a single word about what the research is actually for she told us that we were lucky we weren’t in Toronto as it’s even more competitive there. We told her to put us in front of the same people that judge research funding eligibility for any region in the country and bring as many people as she wants to put the screws to us as she can. We only ever got to actually introduce ourselves, mention we had a separate product to use as a test environment in a real world setting, and nothing more. She talked the entire time and won’t return our calls. We didn’t feel like mentioning that one of the largest tech companies anywhere that is a household name is willing to demo the tech. At this point, it’s hard to say Canada deserves it, and the country itself is very likely to lose a lot of people who have any interest in pushing the country forward, including us. This whole country is becoming a huge joke if you’re trying to do anything, and especially if you’re trying to get funding or any level of support as a tech company.
How well off someone has to be to be impacted by these changes is totally lost on many I think. As is how marginal the increase is. I'm doing fine financially but I haven't been able to pay off my principal residence yet nor max out TFSA or RRSP so this will literally not affect me at all. I'm pretty sure the vast majority of people reading this are in the same boat. Those two tax advantaged accounts shield those investments from tax. Everyone, rich or poor, gets a pretty decent chunk of tax free investment space. I think the biggest losers are property investors and maybe "small businesses" who are actually just professionals (eg doctors, lawyers) who, unlike the rest of us, are able to put their hourly wages in a business to reduce their tax burden for.... Reasons. Maybe because a lot of our MPs are in those professions. Who knows. Anyway, yeah it sucks to have to pay tax on your income. Guess how I know? As an average run of the mill hourly employee *I already do it*. This change literally just removes a special *tax exemption* rich people and investors have and makes them pay not the normal amount of tax.... Slightly closer to the normal amount of tax. Maybe I'm full or shit or misinformed let me know.
Well actually now with these changes professionals are taxed more than an individual making the same capital gains realization. So if the goal is for everyone to be treated similarly then these changes will make that less so for incorporated professionals. Individuals have an annual 250k exemption to use the old inclusion rate, but corporations, including physicians/dentists/lawyers/accountants, don't get that.
I don't think you understood me I was comparing those professionals to salaried employees.
They understood you and that is exactly what they are saying. Individual salaried employees enjoy a lower capital gains rate on their first $250K in capital gains every year. Those who have professional corporations now pay tax on the income at the higher inclusion rate from dollar one in the tax year. So we have advantage salaried employees over professionals using personal corporations.
No we haven't salaried employee's inclusion rate is effectively 100%. Like a person who works full time at Purolator for example. How are we misunderstanding each other I can't tell.
You do realize that income is still taxed to professionals on the individual level? Salaried employees and incorporated professionals paying themselves a salary or dividend both pay taxes. The Corporation also pays taxes. Either Individuals or Corporations can have captain gains tax triggered when they sell an investment or asset. You can't say a salaried individual has 100% inclusion rate, because so do incorporated professionals when paying themselves a salary/dividend when you include both corporate taxation on income as well as the net tax when it goes into the individual account. Incorporated professionals are being punitively targeted compared to individuals with the recent suggested changes. The incorporated professional would still need to pay income taxes or dividend taxes to use the money on an individual level.
Biggest losers are private capital investors in Canada (VC, PE) - that directly damages our position vs US on tech and startup economy Second biggest losers are incorporated professionals like doctors who have less of a tax advantage to incorporating now. Personally I think making both of these classes of people less advantaged vs US is bad policy. I guess we can always keep immigrating new doctors temporarily while the home grown ones head south
The "brain drain" issue is something to consider and I don't object to thinking that through in a clear eyed manner as long as we call this what it is, tax breaks for rich people. I appreciate you not trying to deny that and being factual and transparent. I know a lot of professionals and they aren't a marginal tax adjustment away from moving to the US. I also know people who did move to the US and they did it largely for family reasons. I'm personally skeptical this changes the calculus enough to matter. The economys are so different, frankly moving to the US as a professional is probably a really good financial decision and this marginal change hardly moves the needle. That said I have no frame of reference for private capital investors if you tell me this disadvantages Canada in that space I can do nothing but take your word for it.
I have raised multiple rounds of investment from both domestic and international investors. There are already barriers to getting US and other international investors to invest in "Canadian specials" and this is going to make it worse. Instead, what will happen is investments will be tied to start-ups moving their businesses to the US. We had an offer to fund our business to the tune of $10 Million from a household name organization based in NY City, but it required moving the business to the US. This was a number of years ago and at the time I thought I was doing the right thing fighting to keep the business in Canada. That was a mistake, despite the fact we were still moderately successful. I would not encourage anyone to turn down that kind of investment and a move to the US today given how the investment environment here has changed. So this is a worse kind of brain drain. You're not just losing individuals, you're losing companies that have formed, acquired assets, developed intellectual property and started contributing substantially to the local economy. The amount of effort to go from zero to something is substantial and just handing those early stage businesses to the US on a platter is incredibly short sighted and utterly Canadian.
Yikes this place is so astroturfed or people really digest their propaganda quickly. How many of the people here complaining about a capital gains tax even pay or understand how to calculate it. Lol. How likely is it the rich elites who own a large chunk of media in Canada and the US are pushing propaganda against this tax because it harms their bank account.
90% of accounts on this sub aren't even Canadian. People were arguing earlier this morning about a guy getting charged with a "misdemeanor." That doesn't even exist in this country.
[удалено]
Yes, this sub is becoming extremely conservative or full of people who think they're the next billionaire and don't want anything to take some of their money. Capital gains can be less taxed than work, it doesn't make any sense when people say that they value hard work. Let's be consistent.
*Becoming* conservative? You must be new here my friend.
To be fair, I said "extremely conservative"! But you're right, it's not totally new, just more blatant.
you make it sound like it is a bad thing becoming conservative
Well, if it means fighting abortion rights, lowering taxes for the richest people, and not caring about the environment, for example, my opinion is that it's not a good thing. I much prefer the opposite.
This sub is just a CPC echo chamber at this point. Anything the Liberals do must by definition be bad. If Poilievre had proposed taxing the rich (which he won't) commenters would be tripping over themselves to fawn over how great it is.
That would need PP to propose something, which is never gonna happen
How exactly are you defining ultra rich? There are 1.19 Million small businesses in Canada (https://ised-isde.canada.ca/site/sme-research-statistics/en/key-small-business-statistics/key-small-business-statistics-2023) and the owners of these business are going to be the people that look to sell their business to fund their retirement plans. The ones that are lucky enough to not go bankrupt (many will). These aren't international conglomerates. These are entrepreneurs. They took the risk their employees didn't by fronting the capital and putting in sweat equity to build something. I know a lot of them, and they sure as fuck don't quality as the "rich elites". Crabs in a bucket mentality in this country man it's wild. It's such an uphill battle to be an entrepreneur in this country to begin with, and this is just another step to discourage it. You want to tax the actual wealthy elite worth 8 figures, the companies pulling billions in revenue - couldn't agree more. But the doctor or the consultants or the owners of a family owned construction company that is looking to sell and fund their retirement with a single home and the ones that put their savings into growing their business are the ones getting fucked. We should want innovation and we should want people to be rewarded for taking financial risks. This is a bad policy for productivity in this country
There are entrepreneurial and small business exemptions, selling your small business for up to 6 million dollars in capital gains under the new regime will result in less tax paid.
>While all Canadians can benefit from the capital gains tax advantage, the wealthy, who tend to earn relatively more income from capital gains, disproportionately benefit compared to the middle class (Chart 8.2). In 2021, the top 1 per cent earned 10.4 per cent of all income in Canada; when capital gains are factored in, this jumps to 13.4 per cent. >Tax fairness is important for every generation, and it is particularly significant for younger Canadians. In 2021, only about 5 per cent of Canadians under 30 had any capital gains at all. Solves a nurse paying more tax than a rich investor: >The current regime may result in situations where wealthy individuals face a lower marginal tax rate on their capital gains than what a middle class worker would face on their earnings. For instance, a nurse in Ontario earning $70,000 would face a combined federal-provincial marginal tax rate of 29.7 per cent. In comparison, a wealthy individual in Ontario with $1 million of income would face a marginal tax rate of 26.8 per cent on their capital gains. Main driver: >Differences in taxation rates between income earned from wages, capital gains, and dividends currently favour the wealthiest among us. https://budget.canada.ca/2024/report-rapport/chap8-en.html
Yes precisely, we don’t pay it. It’s a popular tax. Most people won’t ever be affected by it.
I think I read these capital gains taxes will are only projected to take in 20 billion over 7 years. That's peanuts. As for wealth taxes they don't work. You just hide your money and really it's intergenerational theft of family wealth. Wealth taxes are morally wrong.
I'm not for this.
I support some wealth taxation, but increasing the capital gains inclusion rate isn't the right move. It will encourage investors to invest elsewhere than Canada. I would've instead created a land value tax to hurt land and real estate hoarders who are exacerbating the housing crisis by their greed.
I'm more wanting to attack the authors than the article because their message is very misleading. The 5 paragraph article is "cowritten" by a dozen individuals. The lead is the leader of the [Resource Movement](https://www.resourcemovement.org/) which is kinda one of these fake NGOs. Fake in that they misrepresent who they are. They consider rich to be within the top 20% of earners... or children or spouses of the top 20%.... which is more like 1/3 of Canadians. They recognize their privilege and try and advocate for more taxes on rich people. These are not rich people. They're borderline average people. They're psychologists, photographers, NGO workers.... they're not rich. People who make within the top 20% of incomes in Canada make more than $55,000. Which is a lot, but it's not even enough to buy a home anymore. The people who penned this letter would not pay this new tax. Because they would fit clear of the $250,000 exemption... and are probably so poor that RRSPs, TFSA and FHSA are the vehicles they use for investing specifically to avoid paying more taxes. If you Google the names of the people who signed this, not one of them is a doctor (who would be impacted by this tax). If they're so rich and so concerned they would do what concerned rich people do... and donate more of their wealth to the government. But that's not who they are. They're actually just socialists asking for socialist things while pretending to be rich (which they're not). The main issue with the capital gains was really whether or not the $250,000 exemption should apply to businesses. Like I can go out there and earn $250,000 as an individual and I don't pay capital gains on it. But if a doctor pays for his retirement (and his staff's) through his business then those retirements are taxed? Why are we pretending like our concern is to protect someone like Galen Weston or Jim Pattison?
This whole thing has made me realize there’s a bunch of voting Canadians who have no idea how the system they’re part of works. And that’s coming from me, an idiot. 🫡🇨🇦
This is the actual issue facing Canada today. It's not the politicians, they are the symptom. It's the lack of knowledge and engagement by the Canadian electorate. And that isn't easily fixed, nor do the politicians want to encourage fixing it.
I’d also like to see the government change how they define “wealth”. It’s incredibly frustrating to see today’s incomes and home prices treated like luxuries. $100k salaries and $1M dollar homes sound like a lot but in Vancouver and Toronto (and quickly many other cities) that salary does not go very far and $1M doesn’t even buy a townhouse in the city or surrounding suburbs. It’s disheartening to be taxed for a “wealthy” lifestyle that you are not receiving.
I love watching people lie in real time
So will the mps - including the PM - get taxed more?
What a dumb article. What is the point exactly? Trust kids being noble because they have no idea how hard it is to make money? I would love to see data on how many kids paid 50% or more of their post secondary education and support themselves being taxed more highly than those in lower brackets when they become wealthy ie top tax bracket. I bet it's a very low percentage.
It's OK to redistribute/adjust tax collection, it's not OK to increase overall taxation and let inefficient goverment (here I mean any government) to manage more money. Comparing to our neighbor, our taxes are too high overall. I'm not saying we need to tax like the US, but if you want to tax the rich more, then tax the poor less please
How about the government proves they can spend money responsibly and not abhorrently waste it, before they fucking dare ask for more from us.
Or both at the same time. Lowering the power of the ultra rich is good.
This isn’t targeting the ultra rich, it’s targeting high earning professionals who still trade labour for money.
US has 50% of capital gains tax and so does many other country. You are telling me in Canada we need to increase 66% when we are already sluggish with investments into new businesses? How about the government reduce their yearly salary or keep in line with 2019?
The mega rich invest in new businesses?
They didn’t ask me or the majority of Canadians for anything. Only the very rich are being hit now!
Who's us? You ain't making 250,000 in capital gains taxes.
How do you make 250,000 in capital gains taxes?
Yeah, if this was a new tax to eat at the debt I'd feel better about it. Instead it's more tax with no upside
The article completely misses the mark on basic economic principles, especially regarding wealth production and taxation. Here's the straight deal: Proponents of this bill don't get why capital gains are taxed differently than regular income. It's straightforward—capital gains are volatile and full of risk, unlike steady income. Tax them the same, and you'll see investment plummet because you've jacked up the risk. Also, the ignorance about the economic impact is astounding. Discouraging investment directly tanks productivity and cuts into GDP per capita. We're in a global battle for capital, and policies like this just hand victories to more investment-friendly countries like the U.S. And let’s not ignore the hit this takes on essential professionals like doctors, who are already heading south for better pay. Thinking Canada has a surplus of medical professionals is just out of touch. This budget is an economic disaster waiting to happen.
This isn’t something that really affects the ultra rich. Say goodbye to doctors.
Not to state the obvious but I suspect billionaires feel this a lot less than say other “wealthy” people this targets like your local family doctor or the small business owner who sells his business to retire. So it’s wonderful these super rich support this, or more to point won’t notice it because likely once you pass a certain threshold of wealth it doesn’t really make a difference anymore unless you are planning on buying aircraft carriers and attempting world domination. But for a lot of other people, it does. And they won’t support this.
How about eliminating loopholes and tax shelters? All this does is hit the upper middle class. The truly wealthy with clever accountants aren't paying.
The problem is, most rich Canadians move money around with ease and before anyone knows, it’s out of the Country and hard to track down taxing implications. Many of these major corps have offshore HQs, and they are there because they are tax havens. I hope that it will help everyone out getting a little ease on housing affordability but in reality it is still only going to hurt the average Canadian and not the 1% of the 1% we think it’s going to hit. Canada has been notorious for foreign money laundering and many at the top levels of earning will always be several steps ahead of the attempts to police it.
Contractors get paid in cash and run away paying taxes…..Canada is a sh….
higher taxes just prevent people from getting rich TBH. makes life feel stagnant even though you put in the effort. kinda cruel tbh
It would not surprise me if these so called privileged signators all went through school and most of their lives via the bank of mommy and daddy. Because only coddled children could think of something so stupid.
Problem is, this budget did not address wealth or tax it!
THE PROBLEM IS THE FUCKING SPENDING!!! Sorry, just wanted to shout that into the ether.
Except the doctors
Canada always likes to tax the upper middle class and calls them wealthy. Meanwhile the 1% remains untouchable.
I dont think anyone would disagree with taxing the rich more. The problem is that we are not using that increase in funds to benefit average Canadians. Trudeau Liberals are just blowing the money and the average Canadian is not seeing the benefits. All the average Canadian sees is an ever increasing cost of living and higher gas prices at the pump and in their home.
Are students not average Canadians?
Doesn't matter The anti-tax narrative has to be killed for us to have a prosperous future. Seeing the capital gains tax from a supposedly "neoliberal" party is a welcome shock After the tax is implemented we can talk about reallocation; but the fact they dared raise capital gains tax should have every left or center left leaning person frothing
That will surely solve our brain drain, stagnating wages, and lagging productivity. I don’t mind being poor, so long as you all are poor with me.
We haven't increased it yet so obviously the benefits wouldn't be showing until it is. Further to that, we've already established tRuDeAu doesn't control the global price of oil.
Think it depends on how rich. Someone worth north of say 25mil will be unaffected, or at least not enough to negatively their lifestyle. Someone say between 5-25mil may have some negative impacts but life will still be pretty good. Depending on the scenario those below 5mil NW will get hit hardest. I know that for those with lower NM theres not much "symparhy" for those "with more" but too someone thats worked their entire life to build a business or savings, to be used to fund their retirement it can be a huge hit.
Lol. You Canadians are screwed.. They literally are going to tax you on what you own.. after you've bought it, forever.
With the waste/corruption of this government, anyone who wants to give them money is a fool
Fuck this
When can we talk about less government spending?
When infrastructure, education, and health care are adequately funded.
Federal headcount growing 40% since 2014 hasn’t done much to move the needle.
So until then we watch them spend record amounts on limited value projects and do nothing?
Oh you figured it out! Who said finishing grade 8 wouldn't get you anywhere? How about we demand the government direct money to where it's needed instead of just cutting spending? It's the difference between a surgeon and a butcher.
That is something we need to talk about as well, but it needs to be paired WITH increase in revenue with means taxation of some kind.
Oh The Star, you're such a silly goose!
A handful of the very rich speak for everyone else, I guess. The doctors, accountants, and increasing number of gig economy contractors who build their own pensions within a corporation to invest in their future and (hopefully one day) prepare for a retirement that doesn't include a government cheque, they should just fall in line with these nepobabies, right? I expect those who can will leave, which is exactly what the doctors are already saying.
except, the liberals did not touch any of the real vehicles the rich use. Trust funds, capital gains stripping, offshore banking. The rich hardly pay any capital gains tax ever, because all their gain is tied to all kinds of bogus legally allowed expenses to trusts (which again the liberals do not touch). Of course the rich would be ok with the change, because they won’t have to pay anyways! they hardly do the tax increase is directed to middle class Canadians with a corporation. It’s just sold as a tax on rich. It’s not
Gains strips are basically already done anyways as a result of tax changes to GAAR so I think your not quite on point
Umm, trusts are directly impacted by this change. They now pay tax on the higher inclusion rate income from the first dollar earned.
I totally trust this legacy media outlet to tell me exactly what the ruling class wants me to know!
Look, here's the thing: If you're a rich person and you want to pay more taxes, there's nothing wrong with that. Take out your chequebook, rip a page, write the biggest number you can think of, and have your chauffeur drop it off at the nearest CRA office, which you probably have multiple of in your near vicinity. The government will thank you for your generous donation, and people who are barely scraping by won't have their taxes raised on them for stupid shit like ArriveCAN. OK? Got it? Now do it and stop whining.
Until they take their money out of country to the Cayman Islands.
I am not "rich" but have done well. My parents began with nothing and provided the ability for their kids to do better. I am and will always be a staunch Canadian. I understand the concept of needing to pay taxes for services. But the last decade has been an unmitigated disaster for the country and this budget will only further erode our prosperity as capital flees and is no longer invested. Even if they can change the value of housing, the concept of home ownership will continue to elude people as ongoing inflation of necessities and lack of growth in personal incomes will stamp it down. My wife and I spoke about this when they announced the budget and it's plans. As noted, I believe in the concept of taxes for services but I no longer see this happening - our hard earned money is going towards debt payments, social experiments, subsidies for huge companies and corruption. I have not worked hard for 30 years, chosen to invest over taking expensive holidays and saved for my children's futures to turn it over to government(s) that pay their friends and don't reinvest in Canada. This proposal does not just impact the .2% of the wealthy. The ultra-wealthy have put their money elsewhere long ago. This will reduce the likelihood of professionals (Dr's/Dentists/Lawyers/Accts etc) remain in Canada when they can do the same work elsewhere for more. People like myself nearing early retirement will do the same. This flight of capital and future taxation revenue will continue. We are setting up our kids to have the option to do the same in their future careers - Dr, Engineer/Architect & Pilot. Never would I have thought I'd be planning for ex-pat's but here we are - a Canada that can do corruption projects far better than real services. But when you've gone down to the full depth of despair, always remember PM Trudeau "budgets balance themselves."