Rich kid Pierre Poilievre who got his pension early at age 31 and had his dental care covered.
Doesn’t want you to have the same things even if you worked longer hours and for more years.
Seriously, the guy it tone deaf. Only reason he became popular is because of people who got fucked by the housing market. Now he sides with people claiming capital gains > 250k in a year? Really?
Hopefully this video will resonate with some people. It's really well explained.
Rich people telling poor people they can be put in charge of taking care of everyone's money
Oh no, they closed a loophole for rich people to avoid taxes… anyway…
I wouldn't say they closed it. They narrowed it.
I've been thinking about this quite a bit, and I'm still not sure why a 100% inclusion rate is a problem. (With various exemptions for primary residence sales and small business sales, maybe with a $1MM lifetime maximum? idk, just making up a number.)
Are they concerned that people just... aren't going to invest their capital to earn more money if they'll be taxed on the profits? Or is this just a global "race to the bottom" that they won't invest in Canada because they can earn more if they invest elsewhere?
Maybe something like: 50% inclusion up to $100K, 75% inclusion up to $1MM, then 100% inclusion thereafter, and add a mechanism to spread capital gains over several years so people making single-lifetime large capital gains aren't treated the same as people earning millions every year.
That would still incentivize small-business creation and startups without letting multimillionaires off the hook.
Very good video overall, except I don't think he made it clear initially that there's a primary residence exception on capital gains tax, so people might be confused that this tax will affect them when it won't. Similarly, the 1¼ million lifetime small business sale exemption should have been introduced earlier, imho.
Like, the example could have been a $2.6 million small business sale instead, then it would actually compare the old $1 million exemption with the new $1.25 exemption, and the old 50% incision rate with the new 50->66% inclusion rate to get a more accurate "apples-to-apples" comparison.
Napkin math:
Old capital gains tax: about 1 million is exempt, so paying 50% capital gains on remaining 1.6 million is 800K income, at 53% is about 424K tax.
New capital gains tax: 1.25M is exempt, so include 50% capital gains on next 250K, then 66% on the remaining 1.1M. Total capital gains income is 851K. 53% tax on 851K is only $27K more, for $452K, which is a 6.6% increase.
Vs. getting increased services over your entire lifetime from the ultra wealthy paying closer to their fair share? Even a small business owner selling a $2.6MM business comes out way ahead.
Also, do we really want to give doctors a pass for incorporating to shelter their income against income tax for their entire lives then say that's a problem when they're asked to pay closer to their actual fair share income tax when they retire? Really?
And we're worried about people selling their multimillion dollar vacation properties paying more tax?
Anyway, I get the video is trying to be "balanced", and it's close, but it's still biased toward the ultra wealthy.
It's really, really difficult to get small business owners to see how they personally benefit from social goods. They spend too much time grinding and struggling during the establishment phase. I think it's something of a traumatizing experience.
Like, trying to get those who primarily sell to working class folks to see how raising the minimum wage actually benefits them, because it means that all of their customers have more money to spend is nigh impossible. All they see is that they'll have to raise prices, and it makes them even more hostile toward their employees.
And the kicker is, they have no reason to trust in any of the social benefits, because we've lived in a society that bas spent the last 45 years dismantling them. And one of our two parties that actually makes government now explicitly runs on destroying social services of every kind.
Like, trying to get those who primarily sell to working class folks to see how raising the minimum wage actually benefits them, because it means that all of their customers have more money to spend is nigh impossible. All they see is that they'll have to raise prices, and it makes them even more hostile toward their employees.
Yeah this argument never really made sense to me. Unless your product's only input cost is labour (which I can't think of a single job that would apply to, let alone close to minimum wage job) your costs should only have to go up by a fraction of the minimum wage increase. This would leave a minimum wage worker/customer better off after buying your product than they would have if it was cheaper.
Given the backstory behind why doctors structured their assets that way I think it's fair and also just makes a lot of the stupid talking points go away to give them a exemption. In itself I believe they should have just switched investment properties to income tax which would be a lot more politically digestible although Trudeau commented why he won't do that a few weeks ago.
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USA neighbor here,
66% is insane, like if I saved up $500k to retire, I’d like to be selling some every year, like 5% (actually a little more but this is for easy numbers). That would get me $25,000 per year, then I’d pay capital gains tax on that and have about $20k left over. A modest retirement, could move to somewhere inexpensive and retire on that.
A 60% capital gains tax means I would have to save 1.5 million dollars to achieve that same retirement.
First, the bump to 66% only happens after 250k that year so $25k would not trigger the extra 16% eligibility. So standard 50% CG only would be applied. $12.5k taxed at your rate means the min rate which may be something like 20% (this number is a wild guess) so say $2500 paid to the gov. Not as bad as it sounds.
A better way to think of it is <$250k 50% of the profit is tax-free. >$250k only 34% of it is tax exempt.
No, if you saved up $500k you would pay $0 in taxes because that's not capital gains. If you happened to hit the jackpot and win on the stock market with your
investmentsbets to the tune of $500k in gains, then you would pay $333k in taxes from your stock market lottery winnings.No, you would not pay $333k in taxes. You would add $333k to your taxable income for the year, and then pay regular tax rates on your total income.
If you made $500k in capital gains and had no other income that year, then by extremely rough estimation (I'm too lazy to pull out a calculator to get the exact figure) you would only be paying somewhere in the ballpark of $60k in federal taxes, then another $20k-$30k based on what province you live in. All things considered, that's like a 17% effective rate, which is too damn low if you ask me.
And that's only on amounts greater than $250k. So anyone this change actually affects is going to be fine. The people complaining about it are straight up lying.
If you save money for retirement you’re ideally selling gains off of that money. Like you have 500k invested in something safe like bonds, it’s making maybe 5% a year, so you live off of that 5% in early retirement and a bit more than that in late retirement. Then you have money leftover when you die, so your heirs can have it.
Do you realize that 67% does not refer to the tax rate, but rather the amount of capital gains that are taxed as income? Meaning that the remaining 33% are always completely tax free?
Example: you sell an investment property for $2,000,000 which you had previously bought for $1,000,000. Your annual salary is $75,000.
In this example, of the $1,000,000 capital gain, 50% of the first $250,000 ($125k) is taxable and 67% of the remaining $750,000 ($500k) is taxable. So, add $625k to your salaried income of $75k and your total taxable income is $700,000.
The total income tax you would pay after the proposed increase (assuming you live in Ontario) is $342,103, which is $320,405 more than you would have normally paid on your salary of $75,000. Therefore, your effective tax rate on the $1M capital gain is roughly 32%, not the 60% you mentioned in your comment.
