National Economy

[WarrenC12]

Originally Posted by Build.It

You misunderstood me. Every worker contributes to the fund. The fund as a whole gets partitioned to say 10 investment firms who are responsible to invest and grow their portion of the funds. I'm not saying each citizen gets their individual contributions invested privately - I was talking about the total CPP collected.

What is the inherent problem with the CPPIB today?

Privatization leads to less scrutiny and the possibility of more widescale fraud and abuse.

[Build.It]

Originally Posted by WarrenC12

I didn't say unrealized gains. I said assets. Think property taxes. Anything can get taxed annually based on value at a relatively low level.

Okay, so if you have a stock portfolio that shot up to $5M but doesn't pay any dividends, and you don't have any notable income, how are you supposed to pay the tax without being forced to sell?

[Innsertnamehere]

Originally Posted by WarrenC12

Of course. The wealthier the corporation (or the individual), the more they can take advantage of these things and pay for more expensive tax accountants.

Nobody seems to be willing to fix the tax code. At least some governments are in favor of loading up the CRA and auditing more people.

It's not just fancy accountants. Even simple things like paying yourself in dividends instead of salary can reduce taxes owing, yet alone being able to pay for a lot of things through a business as a pre-income tax expense (cars, phones, etc.).

That also doesn't even touch the "skirting the edges" type things business owners almost universally do with expensing as there is no reasonable method of being "caught" like expensing personal dinners, etc.

[Acajack]

Originally Posted by Innsertnamehere

It's not just fancy accountants. Even simple things like paying yourself in dividends instead of salary can reduce taxes owing, yet alone being able to pay for a lot of things through a business as a pre-income tax expense (cars, phones, etc.).

That also doesn't even touch the "skirting the edges" type things business owners almost universally do with expensing as there is no reasonable method of being "caught" like expensing personal dinners, etc.

BTW I wasn't saying that it was great or acceptable.

Only that it's a bit surprising to have people react with a "OMG I can't believe he does that!"

[WarrenC12]

Originally Posted by Build.It

Okay, so if you have a stock portfolio that shot up to $5M but doesn't pay any dividends, and you don't have any notable income, how are you supposed to pay the tax without being forced to sell?

How are you paying the rest of your bills in this hypothetical scenario?

[Build.It]

Originally Posted by Acajack

BTW I wasn't saying that it was great or acceptable.

Only that it's a bit surprising to have people react with a "OMG I can't believe he does that!"

What surprised me the most was that the confusion came from a business professor.

[Innsertnamehere]

Originally Posted by Build.It

Okay, so if you have a stock portfolio that shot up to $5M but doesn't pay any dividends, and you don't have any notable income, how are you supposed to pay the tax without being forced to sell?

If you own a property with no income, how are you supposed to pay the property tax without selling?

You figure it out. The reality is that people do have incomes, and make their property tax payments from them.

A wealth tax would be no different. You either source the revenue elsewhere or sell to pay the taxes due.

Like property taxes, a "wealth tax" on asset value would need to be only a very small percentage - 0.5% or something - or you would be forcing people to liquidate assets constantly.

In the Canadian context of being obsessive with Real Estate, if anything, the Government should just shove through massive property tax increases while decreasing other taxes. It more accurately taxes people sitting on wealth.

The problem is that a lot of old Canadians sit on huge real estate wealth while cosplaying as poor as they have low incomes in retirement.. "someone think of the seniors sitting on 2.5 million in real estate!"..

[WarrenC12]

Originally Posted by Innsertnamehere

It's not just fancy accountants. Even simple things like paying yourself in dividends instead of salary can reduce taxes owing, yet alone being able to pay for a lot of things through a business as a pre-income tax expense (cars, phones, etc.).

That also doesn't even touch the "skirting the edges" type things business owners almost universally do with expensing as there is no reasonable method of being "caught" like expensing personal dinners, etc.

Yep, agreed. There are advantages to having your own corporation when you can do so. Of course you're missing out on things like CPP, EI, and other potential benefits.

Increasing corporate taxes would help.

I'm not here to dissect Lio's tax return, I don't think this type of tax treatment for small businesses is a huge problem.

[Build.It]

Originally Posted by WarrenC12

How are you paying the rest of your bills in this hypothetical scenario?

The answer is yes - you'd be forced to sell your assets to pay a tax.

[WarrenC12]

Originally Posted by Build.It

The answer is yes - you'd be forced to sell your assets to pay a tax.

So you have no other income? Just a $5M stock portfolio consisting of no holdings that pay any level of dividends? Are you also homeless?

This example is completely unrealistic.

[MolsonExport]

Originally Posted by Build.It

Basically, where I'm headed with this is that the system needs to be built so that anyone with an IQ over 80 can take care of themselves once they turn 18, versus what we have now (where numerous people with 120+ IQs, and degrees rely on social assistance to get by).

I am really surprised that anyone would make such a statement. You don't need to be a business professor to know this would be unworkable. (of course you didn't reply)

did you take care of yourself while getting your engineering degree? Presumably you weren't 14 like Doogie Howser.

[Build.It]

Originally Posted by WarrenC12

So you have no other income? Just a $5M stock portfolio consisting of no holdings that pay any level of dividends? Are you also homeless?

This example is completely unrealistic.

You're missing the point, Dwight.

I'm telling you how the asset holder is going to think.

Eventually you just chase all the wealth out of the country. Why would anyone invest any money in Canadian indexes if they can invest in literally any other country and not pay a wealth tax.

[WarrenC12]

Originally Posted by Build.It

You're missing the point, Dwight.

I'm telling you how the asset holder is going to think.

Eventually you just chase all the wealth out of the country. Why would anyone invest any money in Canadian indexes if they can invest in literally any other country and not pay a wealth tax.

Yep that is a risk when there's a tax policy change between jurisdictions.

So why don't we eliminate all taxes and attract all of the world's wealth to Canada?

You're missing the point in that you have extremely simplistic solutions to complicated problems.

[Build.It]

Originally Posted by MolsonExport

I am really surprised that anyone would make such a statement. You don't need to be a business professor to know this would be unworkable. (of course you didn't reply)

did you take care of yourself while getting your engineering degree? Presumably you weren't 14 like Doogie Hauser.

I was 17 actually. (skipped grade 2 .. long story)

A quick online search:
https://surprisinglives.net/jobs-by-iq/

IQ 80 – 89 – Below average intelligence;

187. Cosmetologist 89.9
188. Teacher’s aide 89.9
189. Shoemaker and repairer 89.9
190. Recreation worker 89.5
191. Janitor 89.5
192. Chauffeur 89.5
193. Taxi driver 89.0
194. Retail salesman 88.6
195. Childcare worker 88.2
196. Maid 88.2
197. Bartender 87.8
198. Waiter 87.8
199. Cashier 87.7
200. Dishwasher 87.7

I'm not as old as you, but I am old enough to at least remember a time where these jobs could afford rent and food. It just so happens that there were less regulations in those days than there are today. Hmmm....

[Build.It]

Originally Posted by WarrenC12

Yep that is a risk when there's a tax policy change between jurisdictions.

So why don't we eliminate all taxes and attract all of the world's wealth to Canada?

You're missing the point in that you have extremely simplistic solutions to complicated problems.

You do realize that it's rich people who employee everyone else right. What do you think rich people will do when you make life difficult for them?

They leave the country, and take the jobs with them.

[Innsertnamehere]

Originally Posted by WarrenC12

Yep, agreed. There are advantages to having your own corporation when you can do so. Of course you're missing out on things like CPP, EI, and other potential benefits.

Increasing corporate taxes would help.

I'm not here to dissect Lio's tax return, I don't think this type of tax treatment for small businesses is a huge problem.

I mean CPP payments are typically still maxed by most business owners. Most business owners of any decently successful business will still be paying themselves a salary of $80k or whatever is necessary to max CPP.

EI is optional for business owners, correct, but frankly EI is kind of overrated in general if you are in an upper income bracket anyway.

The tax benefits of being a business owner are huge, and that's why it's common as you advance in salary for compensation to become more than just straight income. As your salary increases it makes sense to diversify compensation through things like car allowances, stock options, etc.

[WarrenC12]

Originally Posted by Build.It

You do realize that it's rich people who employee everyone else right. What do you think rich people will do when you make life difficult for them?

They leave the country, and take the jobs with them.

You've had a lot of koolaid. Corporations tend to employ large numbers of people, not individual robber barons.

[Build.It]

Originally Posted by MolsonExport

-single moms with multiple children by deadbeat/dead dads?
-people with severe physical disabilities?
-people with debilitating mental illness?
-people with debilitating substance abuse issues?
-maimed veterans?
-people suffering from progressive diseases?
-people living in places where the backbone of the economy suddenly gets wiped out through no fault of their own (e.g., the cod fishery in Newfoundland in the 1990s)?
-people laid off due to global recessions?
-people suddenly losing their livelihood due to weather/climate and natural disasters, including pandemics, earthquakes?
-people losing their employment due to geopolitical developments (e.g. Trump's boneheaded 25% tariff threat)?

No thanks, I would not want to live in your vision of Canada. Bootstraps do not solve most employment problems.

-single moms with multiple children by deadbeat/dead dads? This is a modern problem, first of all. But single moms still have other family members who can help (happens all the time), and they can sue the dad
-people with severe physical disabilities? This is the only group I will agree with you on to an extent, but let's not play dumb and pretend this doesn't get abused.
-people with debilitating mental illness? There are very few mental illnesses that are so severe that the affected person can't work at least part time
-people with debilitating substance abuse issues? There are very few addicts whose addictions are so severe that they can't work. If someone wants to poison themselves, go right ahead. But I'm not going to bail them out.
-maimed veterans? That's what private insurance is for, and can come out of their salary
-people suffering from progressive diseases? Progressive means that it wasn't always bad. They can still work and invest for part of their life. They presumably have family as well.
-people living in places where the backbone of the economy suddenly gets wiped out through no fault of their own (e.g., the cod fishery in Newfoundland in the 1990s)? Learn new skills
-people laid off due to global recessions? Should have an emergency fund saved
-people suddenly losing their livelihood due to weather/climate and natural disasters, including pandemics, earthquakes? That's what insuranceis for
-people losing their employment due to geopolitical developments (e.g. Trump's boneheaded 25% tariff threat)? Should have an emergency fund saved

[MolsonExport]

Originally Posted by Build.It

I was 17 actually. (skipped grade 2 .. long story)

A quick online search:
https://surprisinglives.net/jobs-by-iq/

IQ 80 – 89 – Below average intelligence;

187. Cosmetologist 89.9
188. Teacher’s aide 89.9
189. Shoemaker and repairer 89.9
190. Recreation worker 89.5
191. Janitor 89.5
192. Chauffeur 89.5
193. Taxi driver 89.0
194. Retail salesman 88.6
195. Childcare worker 88.2
196. Maid 88.2
197. Bartender 87.8
198. Waiter 87.8
199. Cashier 87.7
200. Dishwasher 87.7

I'm not as old as you, but I am old enough to at least remember a time where these jobs could afford rent and food. It just so happens that there were less regulations in those days than there are today. Hmmm....

And what does this have to do with the price of beans in Peru? You are stating that because some people with an IQ above 80 are gainfully employed, that anyone, regardless of circumstances, with an IQ above 80 should always be expected to take care of themselves? Is that your thesis? If so, it wouldn't muster a passing grade in any course that I teach, no matter how many "statistics" you present to support your hypothesis.

In any event, where was the sample for which these scores were calculated? What was the size of the sample? I am most interested in the standard deviation and skewness of the scores by each occupation.

IQ in principle follows a standard normal distribution, because the raw (measured) scores are standardized (thus imposing a bell curve distribution, defined by a mean of zero [thereafter, indexed to 100] and with about 68% of the observations occurring between plus or minus one standard deviation of the mean, and about 95% within two standard deviations of the mean,...). At the occupational level, I would imagine that in many cases, it would not follow a normal distribution, and thus making statistical inferences as if they did follow such a distribution would be highly misleading.

[Build.It]

Originally Posted by MolsonExport

And what does this have to do with the price of beans in Peru? You are stating that because some people with an IQ above 80 are gainfully employed, that anyone, regardless of circumstances, with an IQ above 80 should always be expected to take care of themselves? Is that your thesis?

I never said regardless of circumstances. It appears that you missed the "proper education" part of my post. But assuming they have no other physical ailments, and they have access to a good education (which is what I was advocating for), anyone with an 80+ IQ (85% of the population) should be able to take care of themselves.

Originally Posted by MolsonExport

If so, it wouldn't muster a passing grade in any course that I teach, no matter how many "statistics" you present to support your hypothesis.

Oh no, now who's going to teach me what a corporation is if I can't pass your class?

Originally Posted by MolsonExport

In any event, where was the sample for which these scores were calculated? What was the size of the sample? I am most interested in the standard deviation and skewness of the scores by each occupation.

IQ in principle follows a standard normal distribution, because the raw (measured) scores are standardized (thus imposing a bell curve distribution, defined by a mean of zero [thereafter, indexed to 100] and with about 68% of the observations occurring between plus or minus one standard deviation of the mean, and about 95% within two standard deviations of the mean,...). At the occupational level, I would imagine that in many cases, it would not follow a normal distribution, and thus making statistical inferences as if they did follow such a distribution would be highly misleading.

Well that was a mouthful.