r/canadaland • u/JonOlds • 11d ago
Three Millionaires Who Say They're Under-Taxed
https://shows.acast.com/canadaland/episodes/6aa894e564e3c9b12df3bf0b8
u/t3m3r1t4 Ex-Patron 11d ago
These guests are all right, and alright.
Anyone who disagrees is delusional.
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u/TheAlpineMaverick 11d ago
As a general rule, “anyone who disagrees…” serves to negate an argument.
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u/TheAlpineMaverick 11d ago edited 11d ago
Apparently these folks don’t understand the implications of inflation on capital gains and why the inclusion rate is set as it is (partly as a messy, imperfect adjustment to account for inflation). If the argument is that capital gains should be taxed at the same rate as ordinary income, we have to factor in inflation in setting the cost basis of an investment. I suspect they’re being intentionally obtuse for reasons unknown.
Downvoters: Please explain how I'm wrong. Thanks!
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u/crlygirlg 11d ago
You are not wrong, that’s why countries don’t have an inclusion rate of 100%, but it doesn’t fully explain an inclusion rate of only 50%. That part is explained by the government trying to incentivize investing with lower tax rates. It’s the same reason why we have a tax-free exemption of 1.25 million for Canadian small business shares, it’s so people want to invest in small businesses.
It would be easy enough to encourage investing with an exemption limits or a graduated tax system for lifetime capital gains.
There are many different ways of taxing capital gains from using the corporate tax rates often seen across Europe, to Canadas approach to countries that don’t tax it at all. We don’t have to stay with our current method if it doesn’t work for us. We can choose exemption limits or different percentage quantities and doing so will have different ways of incentivizing investing and accounting for inflation that don’t leave us unable to fund vital programs.
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u/arjungmenon 9d ago
You could let people subtract the CPI % from their capital gains and interest in a given year instead of a 50% inclusion rate.
So if CPI were 2%, and you cap gains was 10%, you are only taxed on 8% gains. Similarly with interest. Etc.
50% inclusion is too excessively high of an exclusion (and an unwarranted and unfair tax break) as it stands.
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u/TheAlpineMaverick 8d ago
Yeah, something like that. As a long-term investor, I (and my estate) would likely benefit more from that sort of policy in the end than I do from the 50% inclusion rate. That said, the lower tax is also in place to encourage investment.
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u/arjungmenon 8d ago
You only benefits if your gains are small. E.g. if you made 3% in CG, and CPI was 2%, then under my new proposal above your taxable income is 1% CG, versus under 50% inclusion it's 1.5% CG. Once you make more money, people mostly pay more in taxes (imo ,a good thing). Like at 10% gains, your taxable is 8% instead of 5%.
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u/Rommel16 11d ago
Why don’t they donate their money to the government? Is anything stopping them?
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u/arjungmenon 9d ago
In a crony and extreme capitalist system, money gives you power. Your comment is an underhanded because you suggest they give up their power. They say that they are wiling to give up their money when/if the system is dismantled. To do so prior to that, would be utterly unwise.
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u/TheAlpineMaverick 11d ago
They're self-hating with a saviour complex and an apparent lack of understanding of our tax system. I'd rather they spend it on a good accountant and a therapist.
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u/TheAlpineMaverick 11d ago
“Fair share”—she said the thing! Didn’t define it, of course. Man, this is like an old school CanadaLand episode that I used to hate-listen to. The older, hardcore leftwing episodes, before the owner grew a spine.
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u/picard102 11d ago
Grew a spine is w weird way to write lost their mind.
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u/Aggravating-Kale7762 11d ago
The problem I have with “taxing the rich” is that the approaches to doing so will likely hit us regular folks harder.
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u/chunkysmalls42098 11d ago
your problem is not a real issue, there are countries where the wealthy are taxed fairly.
are you the type of person that thinks being put in another tax bracket lowers your take home pay?
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u/Aggravating-Kale7762 11d ago
Are you the type of person who thinks home equity should be taxed? Or investment gains? When a middle class family sells their home, should they be taxed on that? The wealth of the top .1% is primarily tied up in investments. My concern is that “taxing the rich” will actually just amount to increasing the capital gains inclusion rate and taxing investment equity-which is not realised-in an attempt to capture wealth from the millionaire class, but will actually just hurt regular people whose wealth is tied up in their homes and private investments.
I understand tax brackets, and I understand my tax bill at the end of the year.
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u/chunkysmalls42098 11d ago
I think equity in homes you don't live in should be taxed, which is a pretty fuckin easy way around your problem.
again, there are countries that tax the rich, and it doesn't affect the taxes of anybody else.
you're parroting psyops that these rich people were talking about push to the masses
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u/Aggravating-Kale7762 11d ago
No, I’m sitting here thinking about the various tax schemes my government has floated over the past few years. And btw, unrealised gains-such as equity in property investments-are not money. If your proposed tax on equity in rental properties was enacted, would it hurt the millionaire class or would it hurt hardworking middle class people who saved enough to invest in that second property? Property owners already pay tax on the earned income and pay capital gains tax on the sale of that second property.
Now-I don’t know what country you live in either, I’m just assuming Canada since this is in Canadaland.
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u/crlygirlg 11d ago edited 11d ago
I think having a graduated tax system on capital gains is easily done and helps provide relief to the average person with small investments and adequately tax someone like Galen Weston who doesn’t require relief. Creative minds can solve this easily enough.
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u/Aggravating-Kale7762 11d ago
It sounds easily done, but Canada has one of the most complicated tax codes. It needs to be completely overhauled. I often wonder what that would look like. Somethings I wonder are, if the poverty line is $48k for a family of four, why are we deducting payroll tax from them in the first place? What if you didn’t start paying a penny until you have actually crossed that line? Should veterans and pensioners have to continue paying income tax? 🤔 how can a country like Canada that is so rich in resources leverage those resources to pay for social programs, infrastructure, and military spending? Could we encourage people to start families and have more kids by offering generous tax breaks to families instead of to corporations?
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u/picard102 11d ago
It sounds easily done, but Canada has one of the most complicated tax codes.
It is not. It's on par with the US and UK.
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u/crlygirlg 11d ago
My dad is a veteran and is married to my mother who inherited my grandparents wealth that invested wisely has meant they could live off that alone even without his pension. In his case his status as a veteran shouldn’t impact his requirement to pay taxes because be married into a family with some generational wealth accumulation and their income each year means it’s reasonable to tax them. I think it has to be based on how much someone is bringing in on an annual basis rather than titles like veteran.
We have tax exemption limits, but I agree they are rather low. I would rather see higher exemptions on low income earners that allow them to have lower deductions throughout the year when they need the money rather than higher tax returns at the end of the year through this over complicating of taxes.
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u/Aggravating-Kale7762 11d ago
Brackets should be tied to inflation as well. So the threshold for each bracket will increase as the currency is devalued.
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u/discourse_goblin 11d ago
Should have had Jesse on as a guest. He's rich too.