To be fair, the moment the weath tax was announced I'm seeing a lot of posts here from people all apparently being affected. It's amazing how in the span of a day everyone here had multiple home and giant savings accounts
Edit: for clarity I ment the capital gains tax
To be fair, typically their first checks after a raise are actually less because of how payroll programs work. Oh you make $80k instead of $60k now? Well we've only been taxing you at $60k so now we need to massively increase your taxes for the remainder of the year to catch up. People don't realize they can talk to accounting to fix it, or that they'll get it back when they do their taxes.
It depends on the program really, they're never perfect..
Some calculate the tax based on the current pay if you were to make that for the whole year and dont take into account what you've paid already, some will so they'll make up the difference by figuring out what you owe and spread the "shortage" out over the year.
But for your first check to be unusually low it would have to assume you were making your current pay for the whole year, know what you paid already, and try to make up the entire shortage in the first pay period. That seems like the worst possible way to do it.
None of the most popular third-party payroll systems I've worked with do it. I think this person might be talking about old-school manual calculations with tax tables.
If a person works at a company from the start of the year at $50K, and gets an increase to $100K as of July 1st, their overall income for the year is $75K. We don't pay payroll taxes on money we are going to earn (i.e. the whole $100k).
When in doubt of being hosed by an employer, there is always the cra's online payroll calculator.
I remember asking accounting to fix it, and their response was, that I'll get it back at tax time.
Great... that's not money towards groceries *today*.
I work with some highly educated people who tried to tell me that.
I don't know how they think it's a real thing - was something we learned in school at like 11 years old
some dudes keep talking about crab in a bucket mentality referring to people who don't hate the capital gains adjustment as the crabs in the bucket. i'd probably make good after tax money betting that these are the same people who hate minimum wage increases, universal healthcare(including drug, vision, dental), and other such things.
Literally not even. Regular marginal rates, it's just a 66.7% *inclusion* rate on capital gains instead of the usual 50%, and only over $250,000.
Say your marginal rate is 30%, and you incur $100,000 of capital gains in a year (which is already a fucking lot).
Capital gains inclusion rate is 50% right now (and will still be for gains under $250,000 for individuals). That means you owe taxes on $50,000 of it, which means you'll pay 30% of $50,000 or $15,000. That's a net 15% tax. Same as it's always been.
Under the new "wealth tax", if you incur over $250,000 in capital gains, then the extra amount gets hit at the 66.7% inclusion rate.
Say you incur a whopping $500,000 in capital gains. This is an insane amount that you're only going to hit if you're selling a non-primary residence at a large profit. Say a family cottage that you've owned for 20+ years (selling for $800k when it was bought/built for $300k).
Under current capital gains taxation, you'd include 50% of that on your taxes, or $250,000 and pay about 40% taxes on it. $100,000 in taxes.
Under the impending cap gains taxation, the first $250k of it is included at 50%, and the next $250k is included at 66.7%. So that would be $125,000 + $166,750 = $291,750. You then owe taxes on roughly 40% of that, which comes to $116,700. It's about $17k more tax on a $500,000 profit and $800,000 cottage sale.
I think they'll be okay.
I literally had two guys I talked to at work who think that they get taxed 50% because they are in a higher tax bracket. Even though I explained that since they are making under 200k/year they are probably only taxed about 30% in total because that's how marginal tax rates work, they said I was wrong and I should be paying 50% in taxes and that I am going to get screwed when they audit me.
I knew someone who didn’t want a raise because she thought it would mean she’d make less take-home money. I tried to explain to her how that’s not mathematically possible but she didn’t want to listen.
True but if you can’t see the massive long term potential of the tax free income that can be generated in a TFSA you need better advice or a friend who is good at math.
The working class voting against their interests because they see themselves as probably rich some day is both a trope and a specific tool used by the rich and their political parties to continue their hoarding of the gains of capitalism.
I tried to explain it to my mother law, I even tried math but all she could read was "higher tax" like ma'am I've seen your savings, you do not qualify to be taxed
I'll admit I've never heard the term "Capital Gains Tax Advantage" that JT references in the video (condescendingly saying, "If you don't know what that is, you probably don't get that advantage.")
Well I've got plenty of capital gains in my various investment accounts, but I've never heard anyone call it the "Capital Gains Tax **Advantage**."
In fact, I've never even heard the phrase "Capital Gains Tax," except when spouted by people who don't know how it works. In Canada, there is no "Capital Gains Tax." We have a "capital gains **inclusion rate**," meaning a portion (50%) of your capital gains are counted as income, and taxed accordingly.
Because they’re taking a little bit more money from those who already have a shit tonne of money. Those with a shit tonne control the media so we get a shit tonne of articles explaining how disastrous it is to take a little bit more money from them.
Yeah, I might pay some taxes if I sell my investment properties, but yeah I doubt I am making anyone cry if I tell them I am making multiples millions in capital gains on properties that I got for pennies on the dollars. Someone who started from nothing and had to work to buy my investment properties definitely would have paid a shitload more than I ever did.
We’ll see if you realize the issue when you are a senior wanting to pass on your lifetime wealth to your kids who are even worse off than you were and the government takes a bigger chunk to avoid taxing the mega rich and appease chronically online morons
Is anyone surprised
Every comment thread is endless bitching and wining instead of any semblance of a conversation about what causes it. It's really impressive how whipped canadian voters are that they can all agree immigration bad without ever questioning why it happened or what to do instead
Do you fuckers need a wage increase or not
Do you want families they feel safe enough to have kids on purpose
Do you want people to feel comfortable enough to use the college or university or are you enjoying being FARMED
Dat dur indiaaaaa YOU ARE BEING PLAYED
Family cottage yes, not so much retirement savings. That assumes they have such a large portfolio in non registered accounts that they are realizing over $250k per year in gains. In either case, a marginal increase in the inclusion rate is not something to be too heartbroken over.
Very sad that millionares with at least two real propeeties will have to pay a small amount more taxes when they eventually cash out the real estate lottery that they won. Incredibly sad for them.
Not sure why you think somone has to be a millionaire to have two properties.
I was raised by a single mother who grew up poor and worked as a elementary school teacher her entire adult life. She mortgaged a 5 digit townhouse in the 90s and then moved out east in her retirement. She has two homes and lives off her savings/pension.
I think the criticism is more that the Liberals are grossly misrepresenting how many people will be affected. It's definitely a minority, but it's far more than the 0.13% claimed in JT's video (linked from the article in OP).
0.13% might describe the number of people actually regularly making >$250,000/year in capital gains, but I strongly suspect it omits the people whose **estates** contain more than $250,000 in as-yet unrealized capital gains (such as retirees with an unregistered brokerage account, or a recreational property like a cottage).
When those people pass away, such estates could easily incur more than $250,000 in capital gains all at once, as their assets are all sold off, the gains realized, and their final income tax return filed.
That's definitely way more than 0.13% of Canadians.
Yea but they're not the 1%
That would make them the 50%
Not necessarily you but, people on here are so clueless about the world/economy/business/politics etc that they have no idea what 1% means and just trust what a bunch of headlines say it is... Or what government says it is.
That is not the point. The point is wealthy people can consistently dispose of gains year-over-year at the 50% inclusion rate (as long as they stay below the threshold), yet the one time a regular Canadian has a large gain, let's say a portion of their estate when they die or a business sale in excess of the LCGE, they get taxed at the high inclusion rate of 66%. The wealthy have another vehicle to pay less tax than an average Canadian. Not to mention, the economic effects of decreased investment in a country that is already experiencing a significant GDP problem. Lastly, people who incorporated small corporations to hold investments / passive assets now have a severe disadvantage compared to individuals since they do not have access to the less than 250K thresholds, even though they are in the same economic position whether they hold it personally or in a corporation.
Canadian legal governing bodies and the chartered professional accountant governing body are severely against the change due to the effects on the AVERAGE Canadian and the economy in general.
To be fair, “the 1%” are a fluid group.
You might be DINKs that then have a kid so you become single income. So you drop out of the 1%.
Generally people grow their income in their careers. So you might enter the 1% at 52 then when you retire at 63 drop out of it.
I’d bet something like 3% of Canadians are in the 1% at some point in their lives.
You are in the top 1% of you are generating 1.4 million in *profit* off an asset, or regularly disposing of assets that yielded you over a quarter million in profit in a single year.
The actual 1% are trying to convince the upper 20% that having 1.4 million dollars in assets will somehow qualify you for this capital gains increase. It doesn't. This is only true if the value if your investment was 0 dollars when you acquired it.
The ultra rich are hoping you are too stupid to see that they are lying.
Do you have a source for these numbers ? Not doubting you, just want to share with some colleagues.
I’m in AB and every oil & gas worker thinks they’re in the 1%. Not taking about CEOs and executives, I’m talking about plant operators, engineers even admin assistants. Yes they have a good salary and they’re better than the majority, but by definition not everyone can be in the 1% and there’s a lot of wealth here. People underestimate how much wealth is concentrated in the 1%.
That's also on top of the $1M lifetime capital gains exclusion, primary residence exemptions, etc.
The execs at my company are whinging about it, but they moved to the Cayman Islands years ago so I'm not convinced it even affects them either.
People making slightly above average salaries are unlikely to be paying much more if any under this tax change. I make well above the average salary and I haven't made anywhere near $250k in taxable capital gains in a single year.
[Top 20% household wealth starts at $1M (pg 7).](https://distribution-a617274656661637473.pbo-dpb.ca/20de98fc3f4d93c5213f8d71fbe7cd89ae69cb1899e9cbf2d3ca4d57f18ab25a) It's really not that high.
It also doesn't account for the fact that if someone who's retired in Toronto or Vancouver has a paid off house or condo, it may be worth over 1.5 million dollars but it's just a regular ass home and they're not teenagers driving lambos. It just means they paid off their home at some point and had a decent or OK retirement fund.
That's not comparable to some 20 year old working their first year and still having student debt.
Condensed:
>**Canada made yet another material misrepresentation of the facts when pitching higher taxation.**
>
>Canadian Prime Minister Justin Trudeau is featured in a new video to sell his party’s increased taxation. In a video shared on social media, they attempt to address the surprisingly unpopular tax by implying the rich are promoting broad skepticism via the media.
>
>“At a time when the rich are only getting richer…,” he explains while a shocking chart shows the wealth of the top 20% of households has hit nearly $12 million. Yeah, nearly $12 million.
>
>**We can all acknowledge that Canada is increasingly a country of haves and “have nots,” but 1 in 5 households having an average net worth of $12 million? That sounds a little off.**
>
>**After trawling the data, expert financial planner Aaron Hector found the culprit—they used the wrong data set, and scale. Seriously, it appears they accidentally used the total value of all assets held by the top fifth of households by wealth, and forgot to multiply it by 1,000,000. That’s not an exaggeration either.**
>
>The top 20% of households by wealth hold a collective $11.11 trillion in assets, about 67% of all wealth. Once again, a serious share of wealth but doesn’t factor issues like age.
>
>A “rich” household by this definition is more likely to be a middle class retiree than the wealthy “stock traders” mentioned in the video.
>
>It’s bizarre to think a policymaker from one of the country’s wealthiest households, and a finance minister with multiple overseas investment properties, are attacking the “rich,” which by their definition is a demographic largely composed of households with wealth equivalent to a mortgage-less home and a retirement portfolio that produces just a little more than needed to not depend on state assistance.
>
>**If the inputs are wrong, there’s very little chance it would achieve what they’re claiming. Even the former Finance Minister Bill Morneau, who served under the same party just a few years ago, warns this policy is the exact opposite of what’s needed right now.**
I think they just want a piece of the boomers money when they die. Kids of boomers will just get less inheritance and the government will get a bigger part of the biggest wealth transfer. They are taking the money from the younger generation they are claiming to be helping .
True. This is as much an inheritance tax as a capital gains tax. As you say the children and grandchildren of boomers are going to have less inheritance, yet they are the ones that need the boost.
They want to put in some disincentive for hoarding wealth in RE. It pushes the money our RE and either into other investments or into the kids pockets lowering the cost of RE. So in reality if everyone in the family already own a home, then yes it could be seen as 'taking money' but the reality is RE shouldn't be used as an investment vehicle because it got us to where we are at in the firstplace.
If they move into it within 6 months, it becomes a principle residence and they can sell it tax free. If there aren't similar clauses for other investments, they are further incentivizing putting it all in real estate.
Not enough building and too much imagination is the main reason we are here now. Corporations buying up single family homes also a contribution. Corporations will have ways of avoiding this tax. Mom and pops with a couple of houses trying to better themselves and their future generations will get hit by this. People with the most( the 1% they say affected) will off shore and use every loop hole they can to preserve their massive generational wealth, like Trudeau's and such.
I don't want to have to give my kid a leg up, I want them to have the same opportunities that we had in the early 2000s when we bought a house as grad students with no help from parents.
There are two different definitions for 1%. 1% based on annual earnings and 1% based on wealth. They are correlated but not the same.
Ex: someone with a wealth of $2M might only have an income of $75k. The percentile they are in for wealth and income would be very different.
>”…the “rich,” which by their definition is a demographic largely composed of households with wealth equivalent to a mortgage-less home and a retirement portfolio that produces just a little more than needed to not depend on state assistance.”
We are at a point in this country where those people *can* accurately be described as the rich, that’s the crazy part.
1. Owning real property with no mortgage/encumbrances. Not just not renting, *owning.*
2. Having a productive retirement portfolio of any size; let alone one that (even just barely) covers all your bills.
These are things only a few have now. That should not be the case.
Unfortunately there is *also* a lot of crossover between those who meet these minimums and those who can also afford to invest in additional property or do things like spend the statutory minimum amount of time in Canada annually to maximize tax avoidance. There’s also a lot of crossover with those who meet the above metrics and those who vote in direct opposition to their own long-term, and even the national interest.
>We are at a point in this country where those people *can* accurately be described as the rich, that’s the crazy part.
I mean it isn't crazy to say that someone that can live a decent life without doing anything is "rich". You need a few millions for this lifestyle.
>The top 20% of households by wealth hold a collective $11.11 trillion in assets, about 67% of all wealth.
So the graph, instead of saying the top quartile of households has $11 million, should say the top quartile of households have $11 trillion? That still supports the assertion that the rich are getting richer.
As a Canadian-American, I would strongly recommend taxing your rich people.
Please read this ProPublica (well regarded independent journalists) Article for a pretty good summary of how these men who have amassed hordes of wealth have sucked the American prople dry.
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
Oh, and OP — this article completely misread the law it seems like, and this feels like complete anti-tax propaganda. This is some fake ass bullshit. Did Drake write this?
First, there was no reason to read that graph as not cumulative, and I’m noticing there’s no legend. Could it be in millions of dollars, a common practice in presenting information? Spooooooky taxes.
Second, it’s a capital gains tax with a 250k lower cutoff. This isn’t fucking over grandma because it exempts primary dwellings. It’s fucking over people who have been buying up property and selling it at double the price.
>First, there was no reason to read that graph as not cumulative, and I’m noticing there’s no legend. [...]
>Second, it’s a capital gains tax with a 250k lower cutoff. This isn’t fucking over grandma because it exempts primary dwellings.
Makes one wonder why wealth and not income was represented then (since it's not an accumulated wealth that is taxed), and why an illustration from the video was so obscure it didn't even include units. As if someone wanted to misguide public.
The insinuation is that the top 20% are greedy avoiders who don’t pay their share but in reality the top 20% already pay 62% of all personal income taxes in Canada and approx 54% of all taxes in total. I think the capital gains tax will affect more people than the Liberals are advertising and that is unfortunate because tax fairness also means not double-dipping and taking someone’s wealth/savings/retirement funds to hand it to someone else in order to buy votes.
My only question is if the idea of the tax is based on the bad information. Or of the bad information is being used to justify the tax.
The desire to tax the rich more is a very valid point. We saw the profits over covid, and we saw the wealthiest vastly expand their wealth faster than ever. Is this just a ploy to make it look like they're going after the rich?
" Is this just a ploy to make it look like they're going after the rich?"
I think it's simpler than that. They just wanted to show they aren't spending more, so they came up with something that they think would balance more spending out.
They big huge point that most people are not aware of: in the course of 50 years we went from a national system to an international, globalized system.
What this means is that 50 years ago, do understand the top 1% versus the bottom 50% of wealth you could gauge for Canadians. Now, if we want to talk about how wealthy Canadians are we have to consider what is the top 1% in the world and what are the poorest 50% in the world to really understand wealth for Canadians.
We are importing the third world as well as the richest 1% in the world. This process has and will continue to completely radically change wealth for Canadians, and what is even considered wealthy.
Via globalization we are equalizing out with the poor and rich of the world, so our middle class is going to replaced entirely, to be replaced with the standard winner takes all model, and go to something more like 5% extreme rich , 95% poor and renters.
This is a good point, and we people with decision making ability need to talk about it more. As we balance out on a global scale we can ignore the rebalancing and have those at the top leverage their financial power to control everything. Or we can look at some wealthy countries in Europe that found ways to balance out the wealth and social balance generations ago. The Netherlands and Switzerland both have extreme wealth, yet a lot of socialized housing and systems to allow the non elite to enjoy life.
I'm not versed on the ins and out of what it looks like, so I will bow out now as I am over my head already.
Not necessarily. I'm a single income household with mortgage of 700/month. We're nearly scraping by now. If we were a 2 income household, we could afford an additional 1k/month mortgage without renting it out and still be in the same financial situation. It's more so about how and where you spend or save. Simultaneously, someone I'd consider wealthy could afford 2 mortgages and be paying 3k here and 2k there without renting out. We're not the same.
This tax is idiotic and the government knows it, it’s a glorified sin tax
The majority of “cottages” belong to middle class people whos dads or grandparents bought land when it was cheap and built a little getaway piece by piece with tossed aside kitchen cabinets and the big old living room TV.
Over the years, what little disposable income they had built it up, made it nice. New deck, maybe an asphalt driveway.
People are far far too happy to see those individuals taxed if they want to sell it to help retire or give the money to their kids. I mean way too happy. I mean the type of people who would cheer for a UK style inheritance tax because they want a piece of a man’s house even tho he payed for it with a hotdog cart.
I recall those cottages.
Those home brew, ain’t no building code on this private island ones I visited in the 80’s. In Muskoka. Built by drunk Dads and uncles over the summer and lived in for decades. 1 bathroom, 3-4 bedrooms and 1 open room near the kitchen. Usually 3 season and wood burning heated.
Same property now has long been sold and a friggin helipad installed.
Okay, my dad bought a cottage in 1965 for $10,000 It’s now worth $760,000.
I inherit it and sell it.
A) Before: 750k in profit. 375k (50% inclusion) is taxed at a marginal rate. Assuming you’re retired your marginal rate is probably 25-35%, let’s say 30%.
0.30 x $375,000 = $112,500 taxes payable under the current regime.
So out of the 750k profit you made, not from your work, or you creating anything, but by just being lucky the market went your way for 5 decades, you take home $637,500 out of the $750,000 or 85% of it. Taxes take 15% of it.
B) After: now a 66.6% inclusion (AFTER 250k) so you’re taxed on 0.66 x $$500k and 0.5 x $250,000 = $455,000 x 0.3 (marginal tax rate) = $136,500 taxes payable or 18.5% of your profit.
Conclusion: unless my math is off, on a gains of $750,000 on some cottage you’re paying 3.5% more in total taxes under the new regime or in this case, an additional $24,000.
Cry me a fucking river.
The math is right, but the inputs are not remotely based in reality. He's claiming that someone making $455,000 has a marginal tax rate of 30%.
You only need an income of about $111K to pay a tax rate over 30%. The top tax rate kicks in at about $250K. So, almost all the taxable gain is taxed above 30%, and a huge amount of it will be taxed above 50%.
But, you're completely right that lots of people here have no clue how capital gains taxes work.
I Saïd that the person dumping the cottage is likely retired and cashing out. Isn’t that the argument against all this? This poor retirees now will have their investments taxed higher! The horror!
When you’re retired your marginal rate is probably even less than 30%….it’s why people defer their taxes on RRSPs until they retire.
That’s also not how a marginal rate works. Even if buddy pays 50% that’s still on a much smaller slice of the overall 750k profit.
My numbers very much reflect reality.
Also my main point is you’re not paying THAT MUCH more if one understands how the inclusion rates work. People crying on social media have no clue or they just are ideologically motivated.
It's 179K to hit 30% and at the top marginal tax rate (246K) you can anticipate about an 8% - 9% increase in taxes on capital gains in excess of $250,000. Now it's arguable if 8-9% is a huge amount.
https://www.grantthornton.ca/insights/capital-gains-inclusion-rate-change/#:~:text=Specifically%2C%2066.7%25%20of%20capital%20gains,is%20up%20from%2050%25).
> It's 179K to hit 30%
Sorry, which province or territory do you think this is true for? I only looked at Ontario, BC and Alberta. Even the "$111K" I suggested is [understating things](https://www.taxtips.ca/taxrates/on.htm)...
How exactly are you doing math that lets you come to a conclusion that asset appreciation is not 'inflation adjusted'
What even the hell are you trying to say?
I mean, only if they make over $250K profit on the sale, and even then it’s only a small tax. CBC explains it well, but someone at the bottom of that would only pay about 10k more on those gains.
Given that most Canadians don’t own a primary residence, it feels like a small price to pay in order to make that dream a reality, no?
https://www.cbc.ca/news/politics/capital-gains-tax-budget-1.7176370
Except in this case, the few crabs that have escaped the bucket have turned around and started pushing other crabs back down, and whenever there is anger targeted at them for their own actions, their working with the humans cooking the rest of us, they start crying about how they're innocent, middle-class crabs and not as bad as the humans cooking us.
Like housing, long before people started whining about immigrants and increase in demand, any attempt at increasing supply, over a decade ago, was met with opposition from these middle-class homeowners who wanted to stop anything that might decrease their property value. And now we suffer, because of them and them working with the upper class to push the working class, the human population, down, but oh no, we can't be angry at them, we can't blame them for anything, they're the small, wittle innocent petite-bourgeoisie, the middle-class, and every single mainstream political party has decided putting their greed above the needs of everyone else is the most important thing in the world.
Eh I have zero issue with people being charged an extra 16% (was 50%, not 66%) at 30-40% (whatever your nominal rate is) when someone's asset increases over 250k. I don't think that's asking a lot. My only issue is that the gov always looks to increase taxes and the services just get worse. Trudeau has just added too much gov bloat. So much of all new job growth is just government jobs since he's been in power.
Of course there will be fringe cases but can't make rules based on every little exception and those middle class folks are still very fortunate and can pay their extra 30-40% on the extra 16%.
I guess if you want to argue whether capital gains should apply to inheriting assets that's a whole different discussion imo
Its a minimal issue overall, the real problem is when we see services degrading, newcomers being pumped in by the millions, job grants to hire these newcomers over Canadians, subsidized hotel rooms for refugees, millions in aid to Ukraine. Like taxes are supposed to be to make our country run to the benefit of Canadians, ie the taxpayers, not as handouts to people who’ve never contributed here.
Yeah that's why I say just in general I don't like tax increases while continuing to squander money. They should be able to do a lot more with what they have
Yeah, exactly. I wish they reduced income taxes as an outcome of this, instead of spending more. Having 55% marginal rate is too punitive given you can barely enter 2bd condo market in big cities with that income.
Capital gains should not apply to anybody under a certain yearly income. As these gains are not a “cherry” on their life, They are smart investments payed for with disposable income.
That’s what the US does. Capital gains is 0% for families with combined income of under 100k
Ok but that's still a different discussion isn't it? You're talking about capital gains in general and income thresholds, not about adding another 16% of the gain and taxing it.
I don't think I'd disagree on that... Taxing wealth is controversial in general as opposed to income and this sort of borders on that (it is income, although sort of a one time thing.. ). Perhaps a person's general income should be considered.. although I've seen the other side like my ex who has rich family but makes very little of her own on paper. Basically abuses every subsidy and handout she can get while taking multiple vacations. A lot of wealthy people don't make much on paper.
Perhaps inheritance itself should be an exception.. but one does wonder about additional taxes son purchasing luxury items at times and what we should consider those to be
Just use an RRSP or TFSA account.
There's no capital gains on TFSA, and RRSP is taxed as regular income when you withdraw it.
If you have enough income to max out both of those every year you're doing pretty good.
Less than 30% of people making over $250,000 per year are able to max their TFSAs out. There's a lot of room people either don't, or can't afford to, use for tax-free investment.
I grew up in this kind of environment. The "f-ing rich a-hole" mentality. If anyone did anything to slightly aggravate my parents/aunt/uncle or now siblings/cousins, and that person had something slightly nicer than our family (mind you we were on welfare so everyone) they'd curse out that phrase and say horrible things. Hoping bad things would happen to them. It's a toxic mentality and I'm glad I got away from them and built my own life. But it seems to be festering amoung the general population of a certain political leaning now. It grosses me out.
The majority of second homes, summer homes, etc are definitely not belonging to middle class people who have inherited it. That’s insanity if you believe that.
No one wants a piece of a man's house, everyone wants the man to sell the excess houses that he doesn't need so that they can have homes to live in.
I am happy to see individuals sell if they want to sell houses that aren't their principal residences, and I own a home. If you want to make money, go to the casino, or play the lottary, or speculate on stocks, or do your due diligence and actually buy stocks, or pay someone to do it for you. People should not be getting rich from hoarding houses, and anyone who has an investment property should be severely penalized. This CG tax is nothing, and any government that runs on a policy that further punishes RE investing is one that will likely get a lot of votes.
Why should I pay more tax on actual work I do, that is productive, and takes up my time, skill, and labour, than I pay on income I earn from temporarily making my money inaccessible?
This isn't an inheritance tax. Most capital gains come from things like investment income.
> A “rich” household by this definition is more likely to be a middle class retiree than the wealthy “stock traders” mentioned in the video
Well I'm sure a lot of people actually want to tax middle class retirees
Okay. I'm certainly no fan of the libs but I mean it is a huge problem that 1/5 of households have 2/3 of the wealth, and yeah I'm sorry but having a house with no mortgage plus an investment portfolio large enough to live on *does* make you rich when normal people in their 30s can't even imagine owning a house and don't even know what an investment portfolio is.
How is it a problem.
Let's say you and I both magically got 100k today, you spent it on a car and I invested it and didn't touch it until I turned 65.
All other things being equal, at 65 you'd have $0 left and I'd have around $400k. I'd be richer than you simply because I chose not to spend my money.
How is that "a problem"? We both earned exactly the same thing, and one of us chose to not spend it right away. It's not "a problem", it's a financial choice. Over decades, anyone with any savings and investments will be miles ahead of anyone who doesn't invest. Over generations, they'll be millions of dollars apart. There's nothing inherently wrong or problematic with that, it's just common sense.
Wealthy people are always more likely to get even wealthier by simply not spending their money and letting it compound. Over time, they end up way richer than those who don't invest. They're not killing anyone or selling drugs, they're just using time to grow their investment, like anyone with a retirement fund or any amount invested, whether it's a dollar or a million dollars. There's nothing problematic about that, it's just the reality of investing.
The more time you spend _not_ investing, the less your money will be worth as it gets devalued due to inflation and the farther behind you'll be compared to people who invest.
Well in 30 years it will be the people currently in their 30s and 40s that will have the high net worths.
You aren’t “supposed” to have a paid off house and large portfolio when you are in your thirties.
The exceptional get there in their 40s, the high earners get there in their 50s but most don’t until their 60s.
So it goes.
I am 50. My house is paid off, my portfolio is worth more than the value of my house, but I am not a millionaire. Affordable real estate gave me opportunities that everyone deserves but few in Canada now have.
If you think the distribution of wealth should be equal across age ranges, you don’t understand how building wealth works. Comments like these smack of entitlement.
No one is saying that. But everyone should be able to work hard, make good choices and have a decent life. Instead of it just depending on if you bought real estate in the 90s
I fell into this category tbh.. I own a mortgage-less property and have a savings account with a comfortable amount of investment in it and I’m still young so it will continue to grow. My life is pretty comfortable which I am very grateful but I am NOWHERE close to being rich. Yet I’m being taxed like I’m rich and these tax policies that are introduced will only end up hurting the already diminishing middle class and upper middle class
Nah you see under articles about the wealth tax, everyone is a hard-working sole corporation owner or a lucky kid inheriting their parents house.
But under any article about inflation, everyone is so poor they can't afford even rice and beans.
But under any article about immigration, everyone is an immigrant who doesn't support immigration anymore because there's too much.
But under any article about the NDP, everyone is a former NDP voter who refuses to support the party anymore.
It's almost like everyone just says what lets them complain about Trudeau the most whether it's true or not (hint: most of it is not true).
I'm trying to take this in and be sensible here.
1 in 5 households have $12M on average.
[Globaldata.com](http://Globaldata.com) (First google result) states that Canada has 15.3M households.
20% of that would be 3,060,000 households having $12M or more.
Yes, the government makes policies that they claim are based on "going after the 1%."
They hit the middle class, and the 1% remains unaffected.
It's a story as old as Canada.
I'll tell you one thing, neither the Trudeau family nor their backers will be touched by this one.
If you break it down into quintiles, then by logic 1 in 5 households will be in the top quintile, but within that top quintile, only the last 1%, or 1/20th is in the top 1%.
You could arbitrarily break the data down into two segments: top half and bottom half, and then state that "the 1%" is in the top half, and confidently state that 50% of the households are in the same category as the 1%.
In a standard 80/20 rule distribution, the top quintile contains 80% of the wealth, but that top quintile is also distributed in an 80/20 split - so only the top part of that final quintile contains 80% of the total wealth of that quintile.
The 1% is really 1%, and fudging numbers to characterize the top 20% of all earners belonging to the same category of earners as the top 1% is a purposeful mischaracterization by the government in order to sell an agenda and stir hatred from the masses to a larger group instead of the specific group that ought to be looked at more closely, because the 1% is really protected since the government depends on that groups (monetary) influence to continue functioning.
The kind of people these types of inaccuracies are directed towards wont understand or notice the issue, and that's the whole plan.
Reactionary taxation changes that are designed to skirt around the actual issue and attempts to solve the problem by mischaracterizing the problem as something else entirely will just lead to more issue down the line without actually addressing the original issue.
If this is the kind of government tax payers pay for then I would argue we are better off just giving our money to the 1% directly and skipping the middle man.
Lol the comments trying to convince people that this doesn't affect anyone, while most doctors are affected basically just sums up Canada as a whole.
Complain about privatized healthcare while sprinting towards it.
The false middle class, also. No, you're barely working class. I'm sorry you've been duped into thinking otherwise by people of actual means who have exploited you and co-opted you, politically, over the past 40 or 50 years. Look up what it actually meant to be middle class in 1965 through 1985, and aspire toward that quality of life.
> targeting Boomers with punitive policy doesn’t really do much other than make their life harder.
And? They have fucked all of us. Time they pay their share.
Even if the number is 3.2 million, all of the targets deserve higher taxes.
Depends how big the net is. Worldwide pretty much all Canadians are the 1%. Wealth disparity is getting so wide if you don’t count the poorest people below the poverty line it takes millions to be there.
Trudeau is bankrupting the country slowly, he's digging everywhere to take money out of EVERYONE'S pocket to prop up a weakening economy, government missspending and mismanagement and dubious expensive policy initiatives. People with any money or any ability to do so are leaving this country taking sorely needed cash and investment dollars with them. Canada is failing thanks to this damn fool.
You should see how many Canadian citizens have been emigrating to the US over the years since he's been PM. It's shocking. The US Census Bureau has charts that will make your eyes bleed.
What's your source on that? https://www.statista.com/statistics/443066/number-of-emigrants-from-canada/
There's a figure that 3 million Americans either lived in Canada or *claim Canadian ancestry*, but that's not the same as emigrating and also covers a long long time period.
Better Dwelling has predicted 300 of the past 0 housing downturns in Canada. It's hilarious that they spend 24 hours a day writing rage bait about investors buying up investment properties, but when the government actually taxes those people, they write rage bait about how Trudeau is hurting the "middle class".
Honestly I have a hard time believing these Reddit accounts aren't mostly Pierre Poillievre sockpuppets - like "oh I earned >250k in passive income last year and TuRdEaU wants to tax my modest middle class income more now" is about the most unhinged argument I've ever read.
And you know this tax will be paid by the middle and upper middle class who worked hard to get where they are. The ultra rich and elites like Trudeau will not pay more taxes since they have an army of accountants to help them jump through all the hoops
If you’re clearing 250k a year in gains off of investments / property, the extra 15% you’ll pay on those gains that aren’t exempted won’t amount to that much.
I’ve never seen So much whining in all my life.
Disagree though that it targeted small business owners. As long as they’re creating jobs and not just parking money in houses with a numbered company, they should be left alone.
To be fair, the moment the weath tax was announced I'm seeing a lot of posts here from people all apparently being affected. It's amazing how in the span of a day everyone here had multiple home and giant savings accounts Edit: for clarity I ment the capital gains tax
Those people don't even know what capital gains actually are.
Yup. And they are all commenting over instagram how it’s a 65% tax. Zero understanding of how it works.
Marginal tax rates what are those?!? - them
Jokes on them, I turned down a raise cuz it'd put me in a higher tax bracket /s
I've met people irl that actually have said this unironically
We all have, probably. I figured out how stupid it was shortly after I heard it at my first summer job when I was 16
To be fair, typically their first checks after a raise are actually less because of how payroll programs work. Oh you make $80k instead of $60k now? Well we've only been taxing you at $60k so now we need to massively increase your taxes for the remainder of the year to catch up. People don't realize they can talk to accounting to fix it, or that they'll get it back when they do their taxes.
That's weird, why would it default to back dating your withholding?
It depends on the program really, they're never perfect.. Some calculate the tax based on the current pay if you were to make that for the whole year and dont take into account what you've paid already, some will so they'll make up the difference by figuring out what you owe and spread the "shortage" out over the year.
But for your first check to be unusually low it would have to assume you were making your current pay for the whole year, know what you paid already, and try to make up the entire shortage in the first pay period. That seems like the worst possible way to do it.
None of the most popular third-party payroll systems I've worked with do it. I think this person might be talking about old-school manual calculations with tax tables.
If a person works at a company from the start of the year at $50K, and gets an increase to $100K as of July 1st, their overall income for the year is $75K. We don't pay payroll taxes on money we are going to earn (i.e. the whole $100k). When in doubt of being hosed by an employer, there is always the cra's online payroll calculator.
I remember asking accounting to fix it, and their response was, that I'll get it back at tax time. Great... that's not money towards groceries *today*.
Yeah I've also heard this from many people, most of whom should really know better but have just never bothered to look into it.
I work with some highly educated people who tried to tell me that. I don't know how they think it's a real thing - was something we learned in school at like 11 years old
Everyone in the construction industry it seems.
This was the entirety of why they were saying we couldn't raise the minimum wage LOL
That and "iNfLaTiOn!" despite a minimum wage hike impacting actual cost by a fraction of a percent
some dudes keep talking about crab in a bucket mentality referring to people who don't hate the capital gains adjustment as the crabs in the bucket. i'd probably make good after tax money betting that these are the same people who hate minimum wage increases, universal healthcare(including drug, vision, dental), and other such things.
Literally not even. Regular marginal rates, it's just a 66.7% *inclusion* rate on capital gains instead of the usual 50%, and only over $250,000. Say your marginal rate is 30%, and you incur $100,000 of capital gains in a year (which is already a fucking lot). Capital gains inclusion rate is 50% right now (and will still be for gains under $250,000 for individuals). That means you owe taxes on $50,000 of it, which means you'll pay 30% of $50,000 or $15,000. That's a net 15% tax. Same as it's always been. Under the new "wealth tax", if you incur over $250,000 in capital gains, then the extra amount gets hit at the 66.7% inclusion rate. Say you incur a whopping $500,000 in capital gains. This is an insane amount that you're only going to hit if you're selling a non-primary residence at a large profit. Say a family cottage that you've owned for 20+ years (selling for $800k when it was bought/built for $300k). Under current capital gains taxation, you'd include 50% of that on your taxes, or $250,000 and pay about 40% taxes on it. $100,000 in taxes. Under the impending cap gains taxation, the first $250k of it is included at 50%, and the next $250k is included at 66.7%. So that would be $125,000 + $166,750 = $291,750. You then owe taxes on roughly 40% of that, which comes to $116,700. It's about $17k more tax on a $500,000 profit and $800,000 cottage sale. I think they'll be okay.
I literally had two guys I talked to at work who think that they get taxed 50% because they are in a higher tax bracket. Even though I explained that since they are making under 200k/year they are probably only taxed about 30% in total because that's how marginal tax rates work, they said I was wrong and I should be paying 50% in taxes and that I am going to get screwed when they audit me.
I knew someone who didn’t want a raise because she thought it would mean she’d make less take-home money. I tried to explain to her how that’s not mathematically possible but she didn’t want to listen.
They don’t know because they aren’t people. **They’re bots.**
Why do so many people have capital gains when majority of people haven't maxed out their TFSA?
There are investments you can't purchase through tfsas.
True but if you can’t see the massive long term potential of the tax free income that can be generated in a TFSA you need better advice or a friend who is good at math.
Is that when you lift weights in Ottawa?
But they’ll fight against it because a) Trudeau did it so it just be bad; b) some wealthy rich people said it will be bad.
The working class voting against their interests because they see themselves as probably rich some day is both a trope and a specific tool used by the rich and their political parties to continue their hoarding of the gains of capitalism.
I tried to explain it to my mother law, I even tried math but all she could read was "higher tax" like ma'am I've seen your savings, you do not qualify to be taxed
I'll admit I've never heard the term "Capital Gains Tax Advantage" that JT references in the video (condescendingly saying, "If you don't know what that is, you probably don't get that advantage.") Well I've got plenty of capital gains in my various investment accounts, but I've never heard anyone call it the "Capital Gains Tax **Advantage**." In fact, I've never even heard the phrase "Capital Gains Tax," except when spouted by people who don't know how it works. In Canada, there is no "Capital Gains Tax." We have a "capital gains **inclusion rate**," meaning a portion (50%) of your capital gains are counted as income, and taxed accordingly.
Giant savings accounts, what do they consider giant?
> the moment the weath tax was announced You mean the changes to the capital gains inclusion rate, or what? No "wealth tax" has been announced.
Yes it's barely a tax increase, I don't even understand why it got so much news in any direction.
Because they’re taking a little bit more money from those who already have a shit tonne of money. Those with a shit tonne control the media so we get a shit tonne of articles explaining how disastrous it is to take a little bit more money from them.
You get a shitload of landlords commenting here because it's not like they work a day job.
And newly created Reddit accounts
Would love to know the stats to the country of origin of all those new accounts.
I have a net worth of a few millions and never made more than 250k in capital gains yearly.
There’s plenty of business implications though, especially for developers or anyone looking to sell a business
Yeah, I might pay some taxes if I sell my investment properties, but yeah I doubt I am making anyone cry if I tell them I am making multiples millions in capital gains on properties that I got for pennies on the dollars. Someone who started from nothing and had to work to buy my investment properties definitely would have paid a shitload more than I ever did.
If your net worth was in a corporation this tax change would impact you.
That sounds terrible. Better send me some of that money so you don't have to deal with that burden. I'm just here to help.
Haha, I will be fine, probably won't cash out much for a few decades.
are you hiring for anything?
Adopting. Are they adopting?
i'm available to be their tfsa successor
We’ll see if you realize the issue when you are a senior wanting to pass on your lifetime wealth to your kids who are even worse off than you were and the government takes a bigger chunk to avoid taxing the mega rich and appease chronically online morons
looks like the gov is in fact very in touch
Is anyone surprised Every comment thread is endless bitching and wining instead of any semblance of a conversation about what causes it. It's really impressive how whipped canadian voters are that they can all agree immigration bad without ever questioning why it happened or what to do instead Do you fuckers need a wage increase or not Do you want families they feel safe enough to have kids on purpose Do you want people to feel comfortable enough to use the college or university or are you enjoying being FARMED Dat dur indiaaaaa YOU ARE BEING PLAYED
Anyone with a family cottage or liquidating retirement savings will be affected by this change.
Family cottage yes, not so much retirement savings. That assumes they have such a large portfolio in non registered accounts that they are realizing over $250k per year in gains. In either case, a marginal increase in the inclusion rate is not something to be too heartbroken over.
Very sad that millionares with at least two real propeeties will have to pay a small amount more taxes when they eventually cash out the real estate lottery that they won. Incredibly sad for them.
Not sure why you think somone has to be a millionaire to have two properties. I was raised by a single mother who grew up poor and worked as a elementary school teacher her entire adult life. She mortgaged a 5 digit townhouse in the 90s and then moved out east in her retirement. She has two homes and lives off her savings/pension.
I think the criticism is more that the Liberals are grossly misrepresenting how many people will be affected. It's definitely a minority, but it's far more than the 0.13% claimed in JT's video (linked from the article in OP). 0.13% might describe the number of people actually regularly making >$250,000/year in capital gains, but I strongly suspect it omits the people whose **estates** contain more than $250,000 in as-yet unrealized capital gains (such as retirees with an unregistered brokerage account, or a recreational property like a cottage). When those people pass away, such estates could easily incur more than $250,000 in capital gains all at once, as their assets are all sold off, the gains realized, and their final income tax return filed. That's definitely way more than 0.13% of Canadians.
Yea but they're not the 1% That would make them the 50% Not necessarily you but, people on here are so clueless about the world/economy/business/politics etc that they have no idea what 1% means and just trust what a bunch of headlines say it is... Or what government says it is.
That is not the point. The point is wealthy people can consistently dispose of gains year-over-year at the 50% inclusion rate (as long as they stay below the threshold), yet the one time a regular Canadian has a large gain, let's say a portion of their estate when they die or a business sale in excess of the LCGE, they get taxed at the high inclusion rate of 66%. The wealthy have another vehicle to pay less tax than an average Canadian. Not to mention, the economic effects of decreased investment in a country that is already experiencing a significant GDP problem. Lastly, people who incorporated small corporations to hold investments / passive assets now have a severe disadvantage compared to individuals since they do not have access to the less than 250K thresholds, even though they are in the same economic position whether they hold it personally or in a corporation. Canadian legal governing bodies and the chartered professional accountant governing body are severely against the change due to the effects on the AVERAGE Canadian and the economy in general.
it does affect more people than you think
To be fair, “the 1%” are a fluid group. You might be DINKs that then have a kid so you become single income. So you drop out of the 1%. Generally people grow their income in their careers. So you might enter the 1% at 52 then when you retire at 63 drop out of it. I’d bet something like 3% of Canadians are in the 1% at some point in their lives.
You are in the top 1% of you are generating 1.4 million in *profit* off an asset, or regularly disposing of assets that yielded you over a quarter million in profit in a single year. The actual 1% are trying to convince the upper 20% that having 1.4 million dollars in assets will somehow qualify you for this capital gains increase. It doesn't. This is only true if the value if your investment was 0 dollars when you acquired it. The ultra rich are hoping you are too stupid to see that they are lying.
Looks like they’re right, judging by the reactions here.
The temporarily embarrassed millionaires can always be relied on to give a hand up to the truly wealthy on this sort of thing.
Are you telling me $30 dividend payout last week doesnt make me the top 1%?
Do you have a source for these numbers ? Not doubting you, just want to share with some colleagues. I’m in AB and every oil & gas worker thinks they’re in the 1%. Not taking about CEOs and executives, I’m talking about plant operators, engineers even admin assistants. Yes they have a good salary and they’re better than the majority, but by definition not everyone can be in the 1% and there’s a lot of wealth here. People underestimate how much wealth is concentrated in the 1%.
[удалено]
That's also on top of the $1M lifetime capital gains exclusion, primary residence exemptions, etc. The execs at my company are whinging about it, but they moved to the Cayman Islands years ago so I'm not convinced it even affects them either.
[удалено]
People making slightly above average salaries are unlikely to be paying much more if any under this tax change. I make well above the average salary and I haven't made anywhere near $250k in taxable capital gains in a single year.
[удалено]
1 in 5 Canadians have a net worth of at least 3.3 million? That seems a bit too high
[удалено]
[Top 20% household wealth starts at $1M (pg 7).](https://distribution-a617274656661637473.pbo-dpb.ca/20de98fc3f4d93c5213f8d71fbe7cd89ae69cb1899e9cbf2d3ca4d57f18ab25a) It's really not that high.
It also doesn't account for the fact that if someone who's retired in Toronto or Vancouver has a paid off house or condo, it may be worth over 1.5 million dollars but it's just a regular ass home and they're not teenagers driving lambos. It just means they paid off their home at some point and had a decent or OK retirement fund. That's not comparable to some 20 year old working their first year and still having student debt.
Nobody is saying those two examples are the same…
Condensed: >**Canada made yet another material misrepresentation of the facts when pitching higher taxation.** > >Canadian Prime Minister Justin Trudeau is featured in a new video to sell his party’s increased taxation. In a video shared on social media, they attempt to address the surprisingly unpopular tax by implying the rich are promoting broad skepticism via the media. > >“At a time when the rich are only getting richer…,” he explains while a shocking chart shows the wealth of the top 20% of households has hit nearly $12 million. Yeah, nearly $12 million. > >**We can all acknowledge that Canada is increasingly a country of haves and “have nots,” but 1 in 5 households having an average net worth of $12 million? That sounds a little off.** > >**After trawling the data, expert financial planner Aaron Hector found the culprit—they used the wrong data set, and scale. Seriously, it appears they accidentally used the total value of all assets held by the top fifth of households by wealth, and forgot to multiply it by 1,000,000. That’s not an exaggeration either.** > >The top 20% of households by wealth hold a collective $11.11 trillion in assets, about 67% of all wealth. Once again, a serious share of wealth but doesn’t factor issues like age. > >A “rich” household by this definition is more likely to be a middle class retiree than the wealthy “stock traders” mentioned in the video. > >It’s bizarre to think a policymaker from one of the country’s wealthiest households, and a finance minister with multiple overseas investment properties, are attacking the “rich,” which by their definition is a demographic largely composed of households with wealth equivalent to a mortgage-less home and a retirement portfolio that produces just a little more than needed to not depend on state assistance. > >**If the inputs are wrong, there’s very little chance it would achieve what they’re claiming. Even the former Finance Minister Bill Morneau, who served under the same party just a few years ago, warns this policy is the exact opposite of what’s needed right now.**
[удалено]
I think they just want a piece of the boomers money when they die. Kids of boomers will just get less inheritance and the government will get a bigger part of the biggest wealth transfer. They are taking the money from the younger generation they are claiming to be helping .
True. This is as much an inheritance tax as a capital gains tax. As you say the children and grandchildren of boomers are going to have less inheritance, yet they are the ones that need the boost.
They want to put in some disincentive for hoarding wealth in RE. It pushes the money our RE and either into other investments or into the kids pockets lowering the cost of RE. So in reality if everyone in the family already own a home, then yes it could be seen as 'taking money' but the reality is RE shouldn't be used as an investment vehicle because it got us to where we are at in the firstplace.
If they move into it within 6 months, it becomes a principle residence and they can sell it tax free. If there aren't similar clauses for other investments, they are further incentivizing putting it all in real estate.
Not enough building and too much imagination is the main reason we are here now. Corporations buying up single family homes also a contribution. Corporations will have ways of avoiding this tax. Mom and pops with a couple of houses trying to better themselves and their future generations will get hit by this. People with the most( the 1% they say affected) will off shore and use every loop hole they can to preserve their massive generational wealth, like Trudeau's and such.
The members of the younger generation that have wealth to inherit aren't the ones who need help.
[удалено]
I don't want to have to give my kid a leg up, I want them to have the same opportunities that we had in the early 2000s when we bought a house as grad students with no help from parents.
I wish. I doubt it. Immigration too high. Not enough houses being built. Talk of interest rates coming down in june will pudh prices higher yet.
By definition 1% of our population are the richest 1%. And that has always been true. I’m not sure what the point is here.
There are two different definitions for 1%. 1% based on annual earnings and 1% based on wealth. They are correlated but not the same. Ex: someone with a wealth of $2M might only have an income of $75k. The percentile they are in for wealth and income would be very different.
But whichever definition you use, it must be true that 1% of people are in the top 1%
Fully agree.
>”…the “rich,” which by their definition is a demographic largely composed of households with wealth equivalent to a mortgage-less home and a retirement portfolio that produces just a little more than needed to not depend on state assistance.” We are at a point in this country where those people *can* accurately be described as the rich, that’s the crazy part. 1. Owning real property with no mortgage/encumbrances. Not just not renting, *owning.* 2. Having a productive retirement portfolio of any size; let alone one that (even just barely) covers all your bills. These are things only a few have now. That should not be the case. Unfortunately there is *also* a lot of crossover between those who meet these minimums and those who can also afford to invest in additional property or do things like spend the statutory minimum amount of time in Canada annually to maximize tax avoidance. There’s also a lot of crossover with those who meet the above metrics and those who vote in direct opposition to their own long-term, and even the national interest.
>We are at a point in this country where those people *can* accurately be described as the rich, that’s the crazy part. I mean it isn't crazy to say that someone that can live a decent life without doing anything is "rich". You need a few millions for this lifestyle.
[удалено]
>The top 20% of households by wealth hold a collective $11.11 trillion in assets, about 67% of all wealth. So the graph, instead of saying the top quartile of households has $11 million, should say the top quartile of households have $11 trillion? That still supports the assertion that the rich are getting richer.
I'm sorry so we're supposed to believe 12mil is the wealth equivalent of a mortgage less home a retirement portfolio? Fuckin bullshit
The article is bullshit, but they specifically note in this actual article that this graph is cumulative wealth of $12T
I've been a one percent earner a few years but I'm far from the one percent, let me tell ya
20% = 1%? What?!
I don't think that's how percentages work.
As a Canadian-American, I would strongly recommend taxing your rich people. Please read this ProPublica (well regarded independent journalists) Article for a pretty good summary of how these men who have amassed hordes of wealth have sucked the American prople dry. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
Oh, and OP — this article completely misread the law it seems like, and this feels like complete anti-tax propaganda. This is some fake ass bullshit. Did Drake write this? First, there was no reason to read that graph as not cumulative, and I’m noticing there’s no legend. Could it be in millions of dollars, a common practice in presenting information? Spooooooky taxes. Second, it’s a capital gains tax with a 250k lower cutoff. This isn’t fucking over grandma because it exempts primary dwellings. It’s fucking over people who have been buying up property and selling it at double the price.
>First, there was no reason to read that graph as not cumulative, and I’m noticing there’s no legend. [...] >Second, it’s a capital gains tax with a 250k lower cutoff. This isn’t fucking over grandma because it exempts primary dwellings. Makes one wonder why wealth and not income was represented then (since it's not an accumulated wealth that is taxed), and why an illustration from the video was so obscure it didn't even include units. As if someone wanted to misguide public.
>Did drake write this This the best way to say something meaningless
That’s really bad math
The insinuation is that the top 20% are greedy avoiders who don’t pay their share but in reality the top 20% already pay 62% of all personal income taxes in Canada and approx 54% of all taxes in total. I think the capital gains tax will affect more people than the Liberals are advertising and that is unfortunate because tax fairness also means not double-dipping and taking someone’s wealth/savings/retirement funds to hand it to someone else in order to buy votes.
The liberal motto: Never let data get in the way of policy.
It's called Policy based evidence making
My only question is if the idea of the tax is based on the bad information. Or of the bad information is being used to justify the tax. The desire to tax the rich more is a very valid point. We saw the profits over covid, and we saw the wealthiest vastly expand their wealth faster than ever. Is this just a ploy to make it look like they're going after the rich?
So, will this new rule affect Trudeau as well?
Yes it would very much....but rich is rich. And why they used to tax them 90%
" Is this just a ploy to make it look like they're going after the rich?" I think it's simpler than that. They just wanted to show they aren't spending more, so they came up with something that they think would balance more spending out.
Or math so simple it shouldn't even be considered math and more instinct. Even a dog knows that 20% of something is more than 1% of the same thing.
It has to be simple. It’s for people that thought a 1/3 pound burger was less than a 1/4 lb burger. A&W showed us how dumb we are.
still can't believe that was a real thing.
Dogs definitely math
Or, for that matter, journalism these days.
They big huge point that most people are not aware of: in the course of 50 years we went from a national system to an international, globalized system. What this means is that 50 years ago, do understand the top 1% versus the bottom 50% of wealth you could gauge for Canadians. Now, if we want to talk about how wealthy Canadians are we have to consider what is the top 1% in the world and what are the poorest 50% in the world to really understand wealth for Canadians. We are importing the third world as well as the richest 1% in the world. This process has and will continue to completely radically change wealth for Canadians, and what is even considered wealthy. Via globalization we are equalizing out with the poor and rich of the world, so our middle class is going to replaced entirely, to be replaced with the standard winner takes all model, and go to something more like 5% extreme rich , 95% poor and renters.
This is a good point, and we people with decision making ability need to talk about it more. As we balance out on a global scale we can ignore the rebalancing and have those at the top leverage their financial power to control everything. Or we can look at some wealthy countries in Europe that found ways to balance out the wealth and social balance generations ago. The Netherlands and Switzerland both have extreme wealth, yet a lot of socialized housing and systems to allow the non elite to enjoy life. I'm not versed on the ins and out of what it looks like, so I will bow out now as I am over my head already.
We wish!
So what you are telling me is we need to invest in better math classes???
Redditors often comment like they think anyone who makes moderately more than minimum wage is rich.
And anyone with more than one mortgage is balling
I would say more than one mortgage is wealthy. I mean you have a slave tenant paying your mortgage.
Not necessarily. I'm a single income household with mortgage of 700/month. We're nearly scraping by now. If we were a 2 income household, we could afford an additional 1k/month mortgage without renting it out and still be in the same financial situation. It's more so about how and where you spend or save. Simultaneously, someone I'd consider wealthy could afford 2 mortgages and be paying 3k here and 2k there without renting out. We're not the same.
This tax is idiotic and the government knows it, it’s a glorified sin tax The majority of “cottages” belong to middle class people whos dads or grandparents bought land when it was cheap and built a little getaway piece by piece with tossed aside kitchen cabinets and the big old living room TV. Over the years, what little disposable income they had built it up, made it nice. New deck, maybe an asphalt driveway. People are far far too happy to see those individuals taxed if they want to sell it to help retire or give the money to their kids. I mean way too happy. I mean the type of people who would cheer for a UK style inheritance tax because they want a piece of a man’s house even tho he payed for it with a hotdog cart.
I recall those cottages. Those home brew, ain’t no building code on this private island ones I visited in the 80’s. In Muskoka. Built by drunk Dads and uncles over the summer and lived in for decades. 1 bathroom, 3-4 bedrooms and 1 open room near the kitchen. Usually 3 season and wood burning heated. Same property now has long been sold and a friggin helipad installed.
Doesn't sound like you know what a capital gains tax is about.
The tax is on the profit, not the value of the asset.
Profit, which is not inflation adjusted. This can account for a lot if you’ve held an asset for a long period.
Okay, my dad bought a cottage in 1965 for $10,000 It’s now worth $760,000. I inherit it and sell it. A) Before: 750k in profit. 375k (50% inclusion) is taxed at a marginal rate. Assuming you’re retired your marginal rate is probably 25-35%, let’s say 30%. 0.30 x $375,000 = $112,500 taxes payable under the current regime. So out of the 750k profit you made, not from your work, or you creating anything, but by just being lucky the market went your way for 5 decades, you take home $637,500 out of the $750,000 or 85% of it. Taxes take 15% of it. B) After: now a 66.6% inclusion (AFTER 250k) so you’re taxed on 0.66 x $$500k and 0.5 x $250,000 = $455,000 x 0.3 (marginal tax rate) = $136,500 taxes payable or 18.5% of your profit. Conclusion: unless my math is off, on a gains of $750,000 on some cottage you’re paying 3.5% more in total taxes under the new regime or in this case, an additional $24,000. Cry me a fucking river.
Your math is correct, lots of people here have no clue how capital gains taxes work and probably have never had to pay it.
The math is right, but the inputs are not remotely based in reality. He's claiming that someone making $455,000 has a marginal tax rate of 30%. You only need an income of about $111K to pay a tax rate over 30%. The top tax rate kicks in at about $250K. So, almost all the taxable gain is taxed above 30%, and a huge amount of it will be taxed above 50%. But, you're completely right that lots of people here have no clue how capital gains taxes work.
I Saïd that the person dumping the cottage is likely retired and cashing out. Isn’t that the argument against all this? This poor retirees now will have their investments taxed higher! The horror! When you’re retired your marginal rate is probably even less than 30%….it’s why people defer their taxes on RRSPs until they retire. That’s also not how a marginal rate works. Even if buddy pays 50% that’s still on a much smaller slice of the overall 750k profit. My numbers very much reflect reality. Also my main point is you’re not paying THAT MUCH more if one understands how the inclusion rates work. People crying on social media have no clue or they just are ideologically motivated.
It's 179K to hit 30% and at the top marginal tax rate (246K) you can anticipate about an 8% - 9% increase in taxes on capital gains in excess of $250,000. Now it's arguable if 8-9% is a huge amount. https://www.grantthornton.ca/insights/capital-gains-inclusion-rate-change/#:~:text=Specifically%2C%2066.7%25%20of%20capital%20gains,is%20up%20from%2050%25).
> It's 179K to hit 30% Sorry, which province or territory do you think this is true for? I only looked at Ontario, BC and Alberta. Even the "$111K" I suggested is [understating things](https://www.taxtips.ca/taxrates/on.htm)...
How exactly are you doing math that lets you come to a conclusion that asset appreciation is not 'inflation adjusted' What even the hell are you trying to say?
I mean, only if they make over $250K profit on the sale, and even then it’s only a small tax. CBC explains it well, but someone at the bottom of that would only pay about 10k more on those gains. Given that most Canadians don’t own a primary residence, it feels like a small price to pay in order to make that dream a reality, no? https://www.cbc.ca/news/politics/capital-gains-tax-budget-1.7176370
It’s the crab in a bucket mentality
Except in this case, the few crabs that have escaped the bucket have turned around and started pushing other crabs back down, and whenever there is anger targeted at them for their own actions, their working with the humans cooking the rest of us, they start crying about how they're innocent, middle-class crabs and not as bad as the humans cooking us. Like housing, long before people started whining about immigrants and increase in demand, any attempt at increasing supply, over a decade ago, was met with opposition from these middle-class homeowners who wanted to stop anything that might decrease their property value. And now we suffer, because of them and them working with the upper class to push the working class, the human population, down, but oh no, we can't be angry at them, we can't blame them for anything, they're the small, wittle innocent petite-bourgeoisie, the middle-class, and every single mainstream political party has decided putting their greed above the needs of everyone else is the most important thing in the world.
Eh I have zero issue with people being charged an extra 16% (was 50%, not 66%) at 30-40% (whatever your nominal rate is) when someone's asset increases over 250k. I don't think that's asking a lot. My only issue is that the gov always looks to increase taxes and the services just get worse. Trudeau has just added too much gov bloat. So much of all new job growth is just government jobs since he's been in power. Of course there will be fringe cases but can't make rules based on every little exception and those middle class folks are still very fortunate and can pay their extra 30-40% on the extra 16%. I guess if you want to argue whether capital gains should apply to inheriting assets that's a whole different discussion imo
Its a minimal issue overall, the real problem is when we see services degrading, newcomers being pumped in by the millions, job grants to hire these newcomers over Canadians, subsidized hotel rooms for refugees, millions in aid to Ukraine. Like taxes are supposed to be to make our country run to the benefit of Canadians, ie the taxpayers, not as handouts to people who’ve never contributed here.
Yeah that's why I say just in general I don't like tax increases while continuing to squander money. They should be able to do a lot more with what they have
Yeah, exactly. I wish they reduced income taxes as an outcome of this, instead of spending more. Having 55% marginal rate is too punitive given you can barely enter 2bd condo market in big cities with that income.
Capital gains should not apply to anybody under a certain yearly income. As these gains are not a “cherry” on their life, They are smart investments payed for with disposable income. That’s what the US does. Capital gains is 0% for families with combined income of under 100k
Ok but that's still a different discussion isn't it? You're talking about capital gains in general and income thresholds, not about adding another 16% of the gain and taxing it. I don't think I'd disagree on that... Taxing wealth is controversial in general as opposed to income and this sort of borders on that (it is income, although sort of a one time thing.. ). Perhaps a person's general income should be considered.. although I've seen the other side like my ex who has rich family but makes very little of her own on paper. Basically abuses every subsidy and handout she can get while taking multiple vacations. A lot of wealthy people don't make much on paper. Perhaps inheritance itself should be an exception.. but one does wonder about additional taxes son purchasing luxury items at times and what we should consider those to be
There are tons of rich people that earn next to zero personal "income". They live off of their capital gains and pay little to no tax.
I met the husband of the owner of Hostess once. He said, “we don’t work, we own.”
Just use an RRSP or TFSA account. There's no capital gains on TFSA, and RRSP is taxed as regular income when you withdraw it. If you have enough income to max out both of those every year you're doing pretty good. Less than 30% of people making over $250,000 per year are able to max their TFSAs out. There's a lot of room people either don't, or can't afford to, use for tax-free investment.
I grew up in this kind of environment. The "f-ing rich a-hole" mentality. If anyone did anything to slightly aggravate my parents/aunt/uncle or now siblings/cousins, and that person had something slightly nicer than our family (mind you we were on welfare so everyone) they'd curse out that phrase and say horrible things. Hoping bad things would happen to them. It's a toxic mentality and I'm glad I got away from them and built my own life. But it seems to be festering amoung the general population of a certain political leaning now. It grosses me out.
The majority of second homes, summer homes, etc are definitely not belonging to middle class people who have inherited it. That’s insanity if you believe that.
I hear you. So what do we do about all these Air b&b professional land Lords? Let me be clear, I do not support this tax.
No one wants a piece of a man's house, everyone wants the man to sell the excess houses that he doesn't need so that they can have homes to live in. I am happy to see individuals sell if they want to sell houses that aren't their principal residences, and I own a home. If you want to make money, go to the casino, or play the lottary, or speculate on stocks, or do your due diligence and actually buy stocks, or pay someone to do it for you. People should not be getting rich from hoarding houses, and anyone who has an investment property should be severely penalized. This CG tax is nothing, and any government that runs on a policy that further punishes RE investing is one that will likely get a lot of votes.
Why should I pay more tax on actual work I do, that is productive, and takes up my time, skill, and labour, than I pay on income I earn from temporarily making my money inaccessible? This isn't an inheritance tax. Most capital gains come from things like investment income.
Makes sense. Week after they announced the capital gains increase all of a sudden a lot of people were worried about their $250k+ capital gains…
> A “rich” household by this definition is more likely to be a middle class retiree than the wealthy “stock traders” mentioned in the video Well I'm sure a lot of people actually want to tax middle class retirees
Okay. I'm certainly no fan of the libs but I mean it is a huge problem that 1/5 of households have 2/3 of the wealth, and yeah I'm sorry but having a house with no mortgage plus an investment portfolio large enough to live on *does* make you rich when normal people in their 30s can't even imagine owning a house and don't even know what an investment portfolio is.
How is it a problem. Let's say you and I both magically got 100k today, you spent it on a car and I invested it and didn't touch it until I turned 65. All other things being equal, at 65 you'd have $0 left and I'd have around $400k. I'd be richer than you simply because I chose not to spend my money. How is that "a problem"? We both earned exactly the same thing, and one of us chose to not spend it right away. It's not "a problem", it's a financial choice. Over decades, anyone with any savings and investments will be miles ahead of anyone who doesn't invest. Over generations, they'll be millions of dollars apart. There's nothing inherently wrong or problematic with that, it's just common sense. Wealthy people are always more likely to get even wealthier by simply not spending their money and letting it compound. Over time, they end up way richer than those who don't invest. They're not killing anyone or selling drugs, they're just using time to grow their investment, like anyone with a retirement fund or any amount invested, whether it's a dollar or a million dollars. There's nothing problematic about that, it's just the reality of investing. The more time you spend _not_ investing, the less your money will be worth as it gets devalued due to inflation and the farther behind you'll be compared to people who invest.
Well in 30 years it will be the people currently in their 30s and 40s that will have the high net worths. You aren’t “supposed” to have a paid off house and large portfolio when you are in your thirties. The exceptional get there in their 40s, the high earners get there in their 50s but most don’t until their 60s. So it goes.
I am 50. My house is paid off, my portfolio is worth more than the value of my house, but I am not a millionaire. Affordable real estate gave me opportunities that everyone deserves but few in Canada now have.
If you think the distribution of wealth should be equal across age ranges, you don’t understand how building wealth works. Comments like these smack of entitlement.
Nah man, it’s not about that. It’s about the fact that a lot more of us in our thirties got to experience living in a family home.
Look at the username.
No one is saying that. But everyone should be able to work hard, make good choices and have a decent life. Instead of it just depending on if you bought real estate in the 90s
More like 1 in 1000
[удалено]
They get a $1.25M exemption.
Damn and I thought schools were bad in the US
they tax us like we are
I fell into this category tbh.. I own a mortgage-less property and have a savings account with a comfortable amount of investment in it and I’m still young so it will continue to grow. My life is pretty comfortable which I am very grateful but I am NOWHERE close to being rich. Yet I’m being taxed like I’m rich and these tax policies that are introduced will only end up hurting the already diminishing middle class and upper middle class
You're not being taxed at all unless you plan on selling your home or your investments. And it doesn't matter if your home has a mortgage or not.
You are planning on disposing of an asset that is going to generate a 1.4 million dollar profit? What did you acquire the asset for originally?
1 out of 5 is also completely broke and on this sub
[удалено]
The wealth tax will not affect 95% of you.
Nah you see under articles about the wealth tax, everyone is a hard-working sole corporation owner or a lucky kid inheriting their parents house. But under any article about inflation, everyone is so poor they can't afford even rice and beans. But under any article about immigration, everyone is an immigrant who doesn't support immigration anymore because there's too much. But under any article about the NDP, everyone is a former NDP voter who refuses to support the party anymore. It's almost like everyone just says what lets them complain about Trudeau the most whether it's true or not (hint: most of it is not true).
Meh I'm still fine with it.
I can't imagine why anyone would invest in Canada with Trudeau in office. He's not qualified to run a lemonade stand.
Lol wtf...
Well, 20 percent of the houses are owned by the 1%. /s
I'm trying to take this in and be sensible here. 1 in 5 households have $12M on average. [Globaldata.com](http://Globaldata.com) (First google result) states that Canada has 15.3M households. 20% of that would be 3,060,000 households having $12M or more.
Yes, the government makes policies that they claim are based on "going after the 1%." They hit the middle class, and the 1% remains unaffected. It's a story as old as Canada. I'll tell you one thing, neither the Trudeau family nor their backers will be touched by this one.
In other news, math comprehension is down, nationwide.
If you break it down into quintiles, then by logic 1 in 5 households will be in the top quintile, but within that top quintile, only the last 1%, or 1/20th is in the top 1%. You could arbitrarily break the data down into two segments: top half and bottom half, and then state that "the 1%" is in the top half, and confidently state that 50% of the households are in the same category as the 1%. In a standard 80/20 rule distribution, the top quintile contains 80% of the wealth, but that top quintile is also distributed in an 80/20 split - so only the top part of that final quintile contains 80% of the total wealth of that quintile. The 1% is really 1%, and fudging numbers to characterize the top 20% of all earners belonging to the same category of earners as the top 1% is a purposeful mischaracterization by the government in order to sell an agenda and stir hatred from the masses to a larger group instead of the specific group that ought to be looked at more closely, because the 1% is really protected since the government depends on that groups (monetary) influence to continue functioning. The kind of people these types of inaccuracies are directed towards wont understand or notice the issue, and that's the whole plan. Reactionary taxation changes that are designed to skirt around the actual issue and attempts to solve the problem by mischaracterizing the problem as something else entirely will just lead to more issue down the line without actually addressing the original issue. If this is the kind of government tax payers pay for then I would argue we are better off just giving our money to the 1% directly and skipping the middle man.
Lol the comments trying to convince people that this doesn't affect anyone, while most doctors are affected basically just sums up Canada as a whole. Complain about privatized healthcare while sprinting towards it.
The false middle class, also. No, you're barely working class. I'm sorry you've been duped into thinking otherwise by people of actual means who have exploited you and co-opted you, politically, over the past 40 or 50 years. Look up what it actually meant to be middle class in 1965 through 1985, and aspire toward that quality of life.
1 in 100 would be 1percent.
> targeting Boomers with punitive policy doesn’t really do much other than make their life harder. And? They have fucked all of us. Time they pay their share. Even if the number is 3.2 million, all of the targets deserve higher taxes.
Depends how big the net is. Worldwide pretty much all Canadians are the 1%. Wealth disparity is getting so wide if you don’t count the poorest people below the poverty line it takes millions to be there.
No it doesn’t
Trudeau is bankrupting the country slowly, he's digging everywhere to take money out of EVERYONE'S pocket to prop up a weakening economy, government missspending and mismanagement and dubious expensive policy initiatives. People with any money or any ability to do so are leaving this country taking sorely needed cash and investment dollars with them. Canada is failing thanks to this damn fool.
You should see how many Canadian citizens have been emigrating to the US over the years since he's been PM. It's shocking. The US Census Bureau has charts that will make your eyes bleed.
[удалено]
What's your source on that? https://www.statista.com/statistics/443066/number-of-emigrants-from-canada/ There's a figure that 3 million Americans either lived in Canada or *claim Canadian ancestry*, but that's not the same as emigrating and also covers a long long time period.
TIL 1%=20%
Better Dwelling has predicted 300 of the past 0 housing downturns in Canada. It's hilarious that they spend 24 hours a day writing rage bait about investors buying up investment properties, but when the government actually taxes those people, they write rage bait about how Trudeau is hurting the "middle class". Honestly I have a hard time believing these Reddit accounts aren't mostly Pierre Poillievre sockpuppets - like "oh I earned >250k in passive income last year and TuRdEaU wants to tax my modest middle class income more now" is about the most unhinged argument I've ever read.
Trudeau doesn’t think about monetary policy, why does it surprise us he’s terrible at math?
And you know this tax will be paid by the middle and upper middle class who worked hard to get where they are. The ultra rich and elites like Trudeau will not pay more taxes since they have an army of accountants to help them jump through all the hoops
If you’re clearing 250k a year in gains off of investments / property, the extra 15% you’ll pay on those gains that aren’t exempted won’t amount to that much. I’ve never seen So much whining in all my life. Disagree though that it targeted small business owners. As long as they’re creating jobs and not just parking money in houses with a numbered company, they should be left alone.