Provincial Economies III

[Innsertnamehere]

Originally Posted by MonctonRad

Well, I'm gonna sell all my stock bearing mutual funds before the capital gains changes come into effect (still taking a tax hit), and doubling down on good solid predictable dividend paying vehicles like bank stocks for my retirement future.

Great for the banks. Not so good for start-ups looking for investors.............

I mean do you plan on selling more than 250k in any given year? the impact would only be on gains above that. Unless you are planning on regularly realizing more than 250k in annual gains, I would probably just stick to the current plan.. if you know you have a large purchase coming up or something, just max the 250k realized gains for a few years in advance.

[kwoldtimer]

Originally Posted by Innsertnamehere

I mean do you plan on selling more than 250k in any given year? the impact would only be on gains above that. Unless you are planning on regularly realizing more than 250k in annual gains, I would probably just stick to the current plan.. if you know you have a large purchase coming up or something, just max the 250k realized gains for a few years in advance.

Am I correct in thinking that the additional tax will be about $10,000 per $250,000 of capital gain?

[MonctonRad]

Originally Posted by Innsertnamehere

I mean do you plan on selling more than 250k in any given year? the impact would only be on gains above that. Unless you are planning on regularly realizing more than 250k in annual gains, I would probably just stick to the current plan.. if you know you have a large purchase coming up or something, just max the 250k realized gains for a few years in advance.

I have a professional corporation. The $250k exclusion does not apply to professional corporations. JT seems fixated on screwing physicians in particular.

[WarrenC12]

Originally Posted by MonctonRad

Well, I'm gonna sell all my stock bearing mutual funds before the capital gains changes come into effect (still taking a tax hit), and doubling down on good solid predictable dividend paying vehicles like bank stocks for my retirement future.

Great for the banks. Not so good for start-ups looking for investors.............

You can sell enough to generate $250k gains per year without a change in tax rates. I think you'll be ok.

[MolsonExport]

It is interesting how politicians seemingly focus on certain groups. Doug Ford has been a complete disaster for the university sector in Ontario.

[goodgrowth]

Trying to think of a more blatant example of cognitive dissonance than being anti sprawl/car-oriented urban development and pro auto industry subsidies.

[WarrenC12]

Originally Posted by kwoldtimer

Am I correct in thinking that the additional tax will be about $10,000 per $250,000 of capital gain?

Well it will be zero difference at $250k.

Let's say you sell $300k in gains, and your marginal rate is 50%.

Old system:

$300k, 50% marginal rate, 50% inclusion rate = 25% effective rate = $75k tax bill.

New system:
First $250k, 50% marginal rate, 50% inclusion rate = 25% effective rate = $62.5k tax bill.

Next $50k, 50% marginal rate, 66% inclusion rate = 33% effective rate = $16.5k tax bill.

Total new tax bill is $79k. So $4k more. Bear in mind this is somebody making $300k every year in gains. Still paying far less than somebody working a job and earning $300k in wages.

[thewave46]

Originally Posted by goodgrowth

Trying to think of a more blatant example of cognitive dissonance than being anti sprawl/car-oriented urban development and pro auto industry subsidies.

Pro-high population growth and anti-development mentality?

[MonctonRad]

Originally Posted by WarrenC12

You can sell enough to generate $250k gains per year without a change in tax rates. I think you'll be ok.

Again, the $250k threshold applies individually, but, not to professional corporations. My capital gains inclusion will increase to 2/3rds from 50% even on the very first dollar of capital gains that I claim.

I'm fucked.

[goodgrowth]

Originally Posted by thewave46

Pro-high population growth and anti-development mentality?

This may be worse as it's a direct endorsement of THE THING that alters societies view on urban planning.

[Acajack]

Originally Posted by MonctonRad

Again, the $250k threshold applies individually, but, not to professional corporations. My capital gains inclusion will increase to 2/3rds from 50% even on the very first dollar of capital gains that I claim.

I'm fucked.

Ouch. Sounds to me like a "ballot question" if there ever was one.

[whatnext]

Originally Posted by goodgrowth

This may be worse as it's a direct endorsement of THE THING that alters societies view on urban planning.

Imagine, politicians actually making decisions based on what the public wants and is best for the economy, rather than what some ivory tower planners want. The nerve!

[kwoldtimer]

Originally Posted by Acajack

Ouch. Sounds to me like a "ballot question" if there ever was one.

Not sure that retiring doctors have much of a constituency.

[Innsertnamehere]

Originally Posted by MonctonRad

I have a professional corporation. The $250k exclusion does not apply to professional corporations. JT seems fixated on screwing physicians in particular.

oof, jeeze. I mean I knew as soon as it was released that it would impact less than the 0.04% of people who they claim it will... Many more people make a capital gains posting large enough to qualify for it, but often it only happens once in a lifetime (sale of a cottage, business, etc.), so doesn't register on an annual basis.

[Innsertnamehere]

Originally Posted by kwoldtimer

Not sure that retiring doctors have much of a constituency.

people who would actually be impacted by it is definitely larger than the 0.04% they claim though. Probably still not significant, but I wouldn't be surprised if it's closer to 5-10% of households which would have some additional tax liability at some point in their life from it.

[P'tit Renard]

Originally Posted by WarrenC12

You can sell enough to generate $250k gains per year without a change in tax rates. I think you'll be ok.

There's NO $250K exemption for medical professional corps. Doctors get whacked with the 66% capital gain rates inclusion for every single dollar of capital gain starting from $1, and that's even before it's distributed out of the corporation!

Why is Trudeau punishing doctors, but individual real estate speculators get the $250K tax break?

[WarrenC12]

Originally Posted by MonctonRad

Again, the $250k threshold applies individually, but, not to professional corporations. My capital gains inclusion will increase to 2/3rds from 50% even on the very first dollar of capital gains that I claim.

I'm fucked.

You have benefitted from this reduced tax rate for your entire career.

I realize this government has impacted doctors more than others.

You have had a lower rate compared to other high wage earners for decades.

[whatnext]

Originally Posted by Innsertnamehere

people who would actually be impacted by it is definitely larger than the 0.04% they claim though. Probably still not significant, but I wouldn't be surprised if it's closer to 5-10% of households which would have some additional tax liability at some point in their life from it.

Seems to be raising quite a bit of ire amongst doctors. Given the parlous state of Canada's healthcare system any change that risks losing doctors is stupid.

Changes to capital-gains tax may prompt doctors to quit, CMA warns
CHRIS HANNAY INDEPENDENT BUSINESS REPORTER
PUBLISHED 7 HOURS AGO
UPDATED 4 HOURS AGO
FOR SUBSCRIBERS

The head of the Canadian Medical Association says the federal government’s proposed increases to capital-gains taxes will pose a significant financial hit to doctors and may push some out of the profession.

The recent federal budget includes an increase to the capital-gains inclusion rate – up to two-thirds from one-half – which means that more of the income generated from the sale of an asset, such as property or a stock, is taxed.

The first $250,000 of capital gains will continue to be taxed under an inclusion rate of 50 per cent for individuals. But for corporations, the new 67-per-cent rate will kick in on the first dollar of capital gains.

This is important for physicians because most operate their practices as small businesses through medical professional corporations, which leaves them more sensitive to changes in capital-gains rules than a salaried worker might be.

The CMA estimated in 2017 that 66 per cent of physicians practised through corporations.

Kathleen Ross, the president of CMA and a B.C. family physician, said physicians across Canada are feeling strained by high patient counts, rising expenses and limited government funding.

“This really is one more hit to an already beleaguered and low-morale profession,” Dr. Ross said. “I am concerned that overstretched physicians are going to either leave the profession or look at working in other industries.”...

https://www.theglobeandmail.com/busi...l-association/

[jonny24]

Originally Posted by goodgrowth

Trying to think of a more blatant example of cognitive dissonance than being anti sprawl/car-oriented urban development and pro auto industry subsidies.

Anti-smoking / pro-tobacco farming?

[P'tit Renard]

Originally Posted by WarrenC12

You have benefitted from this reduced tax rate for your entire career.

I realize this government has impacted doctors more than others.

You have had a lower rate compared to other high wage earners for decades.

That's such a tone-deaf comment. At most the old policy buys doctors some tax deferral.

Given how vital and essential they are to our society and the keystone of our healthcare system, they should not be punished for this government's reckless spending.

Why not instead have capital gains inclusion rates bumped up to 66-100% for residential real estate investments only and hard capping the principal residence exemption like they do in the US? This government chooses instead to pick a fight with doctors, it's idiotic policy.