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  #81  
Old Posted Jun 12, 2020, 5:33 PM
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"The 1%" was always a stupid slogan. Most of the top 1% is wealthy professionals or small-to-medium business owners, who have peanuts compared to the ultra-wealthy. $9M gets you into the top 1% in Canada while the wealthiest family is over $30B now.
Precisely.
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  #82  
Old Posted Jun 12, 2020, 5:37 PM
Truenorth00 Truenorth00 is online now
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Top 2% Canadians? What difference does it make?
This is a few years old but a great CBC article that talks about who the "1%" are in Canada:

https://www.cbc.ca/news/canada/who-a...op-1-1.1703321

Most are entrepreneurs or working professionals. Particularly medical professionals.

So trying to tax their income, in particular, is going to have some adverse effects. We'll be back to the 90s when doctors, engineers and anyone with a decent idea was fleeing the country.

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How would you propose we pay for the COVID19 bill?
We need to decide what the purpose of our tax system is. If it's just to pay for services, that simplest and broadest taxes are best. ie consumption taxes.

If we're trying to address income inequality, then progressive taxation, which we already do.

But the problem that a lot of people have is with wealth disparity. Not income disparity. Though a lot of people conflate the two. And the largest part of that wealth disparity comes from capital gains. I remember watching a documentary that used Shaq as an example to explain this. He made $300M playing basketball. But he now has investments that make him $30M per year. It's easier to make money when you have money. And at a certain point that goes well beyond what somebody can actually earn through skill. In other words the return on capital is substantially surpassing the return on labour. The only way I can think of addressing that is through 100% inclusivity on capital gains. How to implement that without hurting investment though is an important question. Especially in an era where startups often reward early investors and employees with shares.

Last edited by Truenorth00; Jun 12, 2020 at 5:50 PM.
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  #83  
Old Posted Jun 12, 2020, 5:42 PM
WarrenC12 WarrenC12 is offline
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Originally Posted by MonctonRad View Post
I'm already paying. My billings are down by about 50% because elective procedures have been cancelled.

And how dare you say "what difference does it make." That's pretty damned flippant and dismissive of you. But, I guess as long as you're not in the 2%, it doesn't matter to you, does it............
Everybody is suffering. With all due respect, you're already in the top 5% of income earners I'm sure, if not higher. You deserve to be as a specialist physician.

You asked me who the "truly wealthy" was. What if I saw $10M in assets? Is that enough of a definition?
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  #84  
Old Posted Jun 12, 2020, 5:44 PM
WarrenC12 WarrenC12 is offline
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Originally Posted by Truenorth00 View Post
This is a few years old but a great CBC article that talks about who the "1%" are in Canada:

https://www.cbc.ca/news/canada/who-a...op-1-1.1703321

Most are entrepreneurs or working professionals. Particularly medical professionals.

So trying to tax their income, in particular, is going to have some adverse effects. We'll be back to the 90s when doctors, engineers and anyone with a decent idea was fleeing the country.
That's why I'm against income tax increases. We are talking about wealth, which is different.

If somebody is making $200k or $500k or $2M annually, I don't care to tax them more than what the marginal rates are at now. Assuming of course they are paid a wage.
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  #85  
Old Posted Jun 12, 2020, 5:59 PM
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One thing to keep in mind is that wealth tends to scale up very dramatically in the upper percentiles. The top 2% is well off, sure, but nothing like the top 0.1% or 0.001%.

The top 100 or so families in Canada have more wealth than the bottom 12 million or so.

"The 1%" was always a stupid slogan. Most of the top 1% is wealthy professionals or small-to-medium business owners, who have peanuts compared to the ultra-wealthy. $9M gets you into the top 1% in Canada while the wealthiest family is over $30B now. $9M is certainly comfortable but you're not living in a mansion on a Caribbean island and flying around in a private jet. And you make have personally worked very hard providing a lot of social value to get that money, while the billionaire families are often more like "dynasties" of random children who are given C-level titles, board positions, and billions of dollars.
Stats and thresholds here:

https://www.thekickassentrepreneur.c...for-canadians/

The thing is while $9M is not private jet and private island level, the probability of someone with $10M (who isn't a farmer or has all of it as equity in their business) having multiple properties and a somewhat jet set lifestyle is pretty high. And it's a valid question to ask whether the deficit is a priority or one more week in Mexico for that person. Balanced of course against the ability of multi-millionaires to evade taxes. The other issue is one of concentration. A farmer with a farm worth $10M or an entrepreneur with a business worth $10M is very different from someone who has $10M in bonds. And our system needs to get better at recognizing productive capital.
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  #86  
Old Posted Jun 12, 2020, 6:03 PM
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Probably the safest way to tackle wealthy inequality is inheritance taxes. Doesn't hurt the person when they are alive. And compels the offspring to actually compete a bit more on skill than wealth. But these are also easy to game and dodge.
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  #87  
Old Posted Jun 12, 2020, 6:06 PM
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Probably the safest way to tackle wealthy inequality is inheritance taxes. Doesn't hurt the person when they are alive. And compels the offspring to actually compete a bit more on skill than wealth. But these are also easy to game and dodge.
Agreed.
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  #88  
Old Posted Jun 12, 2020, 6:16 PM
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I would like to see how you define "the truly wealthy"

As an independently employed professional, I have no pension, and the assertion that RRSPs and TFSAs can fund a 30-35 year retirement is laughable. This is why I have a professional corporation for retirement savings (and this has already been kneecapped by Trudeau and Morneau).

And now you want to tax my assets (which I have accumulated using post tax income)?

As ZMonkey said above, the top income earners already pay the vast majority of taxes, while 40% of Canadians pay no tax whatsoever.

At what point will you actually kill the goose that laid the golden egg............
Slightly off-topic but I've always wondered why doctors have always wanted to be contractors and not state employees with pensions and benefits.
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  #89  
Old Posted Jun 12, 2020, 6:20 PM
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Probably the safest way to tackle wealthy inequality is inheritance taxes. Doesn't hurt the person when they are alive. And compels the offspring to actually compete a bit more on skill than wealth. But these are also easy to game and dodge.
Inheritence taxes only encourage avoidance. Most US billionaires, for example, setup huge charitable foundations to avoid paying estate taxes. The likes of Bill Gates and Warren Buffet know they than diliver more public benefit from their wealth through foundations than could the government.

Canada would be better to reduce tax deductions and more aggressively claw back entitlements such as the child tax benefit and OAS from say the wealthiest 50%. Even more effective would be an end to unionization within the public sector as it is impossible to bargain in good faith with monopoly service providers. If the Feds could say reduce salaries by 10%, benefits by 25%, staffing levels by 10% and convert all defined benefit pensions, the savings would be enormous.

Australia ended defined benefit pension plans from the public sector, private sector and its equivalent of CPP, replacing them with Superannuation which is like a form of mandatory RRSP contribution. That extremely progressive move as well as its lower than OECD Heath spending are huge competitive advantages.
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  #90  
Old Posted Jun 12, 2020, 6:24 PM
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Canada would be better to reduce tax deductions and more aggressively claw back entitlements such as the child tax benefit and OAS from say the wealthiest 50%.
These are already clawed back for high earners.


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Even more effective would be an end to unionization within the public sector as it is impossible to bargain in good faith with monopoly service providers. If the Feds could say reduce salaries by 10%, benefits by 25%, staffing levels by 10% and convert all defined benefit pensions, the savings would be enormous.
Sorry do we have overpaid public sector employees, or useless incompetents? Somehow we have both, which is quite the achievement for the free market.
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  #91  
Old Posted Jun 12, 2020, 6:29 PM
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Inheritence taxes only encourage avoidance. Most US billionaires, for example, setup huge charitable foundations to avoid paying estate taxes. The likes of Bill Gates and Warren Buffet know they than diliver more public benefit from their wealth through foundations than could the government.

Canada would be better to reduce tax deductions and more aggressively claw back entitlements such as the child tax benefit and OAS from say the wealthiest 50%. Even more effective would be an end to unionization within the public sector as it is impossible to bargain in good faith with monopoly service providers. If the Feds could say reduce salaries by 10%, benefits by 25%, staffing levels by 10% and convert all defined benefit pensions, the savings would be enormous.

Australia ended defined benefit pension plans from the public sector, private sector and its equivalent of CPP, replacing them with Superannuation which is like a form of mandatory RRSP contribution. That extremely progressive move as well as its lower than OECD Heath spending are huge competitive advantages.
It would also lead to a larger number of our super-wealthy to the US in prime working and business formation years and a carabiner island later.

I am someone who thinks if we want broad services, tax everyone more. That is what most of Europe does. We shy away from it because while we want services, we only want a few to pay for them.
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  #92  
Old Posted Jun 12, 2020, 6:34 PM
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It would also lead to a larger number of our super-wealthy to the US in prime working and business formation years and a carabiner island later.

I am someone who thinks if we want broad services, tax everyone more. That is what most of Europe does. We shy away from it because while we want services, we only want a few to pay for them.
Like I said earlier we need to decide what we want the tax system to accomplish. Europeans have decided that they want broad, high quality and universal public services. For that, they accept broad taxes that everyone pays, not just the rich. The US on the other hand has far fewer services but one of the most progressive income tax systems in the world. More progressive than ours. I am not sure what the consensus is in Canada.
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  #93  
Old Posted Jun 12, 2020, 6:36 PM
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Originally Posted by Truenorth00 View Post
The thing is while $9M is not private jet and private island level, the probability of someone with $10M (who isn't a farmer or has all of it as equity in their business) having multiple properties and a somewhat jet set lifestyle is pretty high.
Yes although it also matters whether they accumulated that $9M by saving up after paying ~50% income taxes or if they got it in a trust fund or from a real estate windfall. We are not only talking about total wealth, which in my opinion is actually not all that relevant (if you work harder and generate more wealth, good for you). The question of equitable and economically efficient sharing of the tax burden is more important.

Fairness aside it's important to preserve the incentive to work. That matters for, say, a surgeon more than it does for a trust fund recipient.
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  #94  
Old Posted Jun 12, 2020, 6:38 PM
WarrenC12 WarrenC12 is offline
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Originally Posted by Truenorth00 View Post
Like I said earlier we need to decide what we want the tax system to accomplish. Europeans have decided that they want broad, high quality and universal public services. For that, they accept broad taxes that everyone pays, not just the rich. The US on the other hand has far fewer services but one of the most progressive income tax systems in the world. More progressive than ours. I am not sure what the consensus is in Canada.
The CPC always uses the US as the boogeyman for high Canadian taxes.

Are you sure they are still more progressive? post-Trump changes?
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  #95  
Old Posted Jun 12, 2020, 6:40 PM
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I should not have used "middle class", but more "wage earners". It's the top 1% that are not covering their fair share IMO. Capital gains inclusion was dropped to 50%, perhaps it needs to go back up.

GST should be higher, but income taxes are high enough.

Where are you suggesting we get additional tax revenue? I'd like to focus on the high wealth individuals first.

When we dropped capital gains to 50 % inclusion, government revenue from capital gains actually went up - something most don't realize or ignore today. People bought and sold assets more often, vs holding them forever.

If you remove the 50% inclusion, there is a good probability the actual tax dollars we generate would decrease.

Think about it on a real-life term, if you own a property as an investment, do you sell it and pay a big tax bill, or borrow against it and invest in something else? For many investors borrowing and investing makes more financial sense. Now scale that to other business, would investors put money into Canada where if they sell they pay a big tax bill or the USA where they don't.

You can argue that short term capital gains should be a business tax (we do this for some real estate already) but can be applied to other areas. The USA actually does - but they do this to encourage long term investments and job creation vs actually raising revenue.

I would actually argue income taxes are not high enough, if you want more services. Say people want child care covered like Quebec, cheap tuition like Quebec and more and cheaper transit. The only real way to get there is everyone kicks in a bit more forever - and should be done provinally.

While people say Alberta likes low taxes, if you make under 150,000 a year you pay lower income taxes in BC than Alberta.

If you make 80K in Alberta you pay 5600 in provincial tax. In BC you pay 4300. Say people in Alberta at that level accepted the same level of tax as Alberta think of all the services. It is also a big reason why people in Alberta would never accept a sales tax, most people pay higher income taxes at the same income level as BC - but that is a different story.

If you want more services, go ask for a broad provincial income tax hike - it is the fastest way to get them.
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  #96  
Old Posted Jun 12, 2020, 6:40 PM
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CPC = Communist Party of the PRC
CPC = Conservative Party of Canada
CCCP = союз советских социалистических республик (USSR)
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  #97  
Old Posted Jun 12, 2020, 6:45 PM
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Think about it on a real-life term, if you own a property as an investment, do you sell it and pay a big tax bill, or borrow against it and invest in something else? For many investors borrowing and investing makes more financial sense. Now scale that to other business, would investors put money into Canada where if they sell they pay a big tax bill or the USA where they don't.
Believe me I know, I'm in this exact position today.

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I would actually argue income taxes are not high enough, if you want more services. Say people want child care covered like Quebec, cheap tuition like Quebec and more and cheaper transit. The only real way to get there is everyone kicks in a bit more forever - and should be done provinally.
I'm more in favor of consumption taxes. GST should go back to 7%, maybe higher. Provinces should be strongarmed into HST.


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While people say Alberta likes low taxes, if you make under 150,000 a year you pay lower income taxes in BC than Alberta.

If you make 80K in Alberta you pay 5600 in provincial tax. In BC you pay 4300. Say people in Alberta at that level accepted the same level of tax as Alberta think of all the services. It is also a big reason why people in Alberta would never accept a sales tax, most people pay higher income taxes at the same income level as BC - but that is a different story.

If you want more services, go ask for a broad provincial income tax hike - it is the fastest way to get them.
Alberta favors higher income earners, it's that simple. They think flat taxes are better than more progressive marginal rates.
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  #98  
Old Posted Jun 12, 2020, 6:47 PM
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Canada would be better to reduce tax deductions and more aggressively claw back entitlements such as the child tax benefit and OAS from say the wealthiest 50%.
I support these moves too. Government benefits like these should be means tested.
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  #99  
Old Posted Jun 12, 2020, 6:48 PM
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I support these moves too. Government benefits like these should be means tested.
Guys....

OAS:
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If you’re receiving OAS and your net income on line 236 of your tax return is more than $75,910 for 2018, you will be subject to OAS clawback. Clawback results in your OAS pension for the subsequent year, paid between July 2019 and June 2020, being reduced by 15 cents for every dollar your net income exceeds the $75,910 threshold. If you have a net income of $122,843 or more for 2018, your OAS is fully clawed back and reduced to zero.
CCB:
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The maximum benefit per child under 6 is $6,639.
The maximum benefit per child for children aged 6 to 17 is $5,602.
These maximum benefit amounts are gradually reduced based on two income thresholds. The first income threshold rose is $31,120 while the second income threshold is $67,426.
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  #100  
Old Posted Jun 12, 2020, 6:50 PM
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The CPC always uses the US as the boogeyman for high Canadian taxes.

Are you sure they are still more progressive? post-Trump changes?
Progressives in BC like low-income taxes in this country too.

In BC, if you make 55K or under you pay less provincial tax than Alberta, but 55K to 160K? You pay less provincial tax than in Alberta - its also not a small margin.

At 80K provincial taxes -
Alberta - 5754
BC - 4310
Ontario - 5491

At 100K
Alberta : 7688
BC - 6381
Ontario- 8139

At 125K
Alberta: 10,188
BC 9,657
Ontario - 12,492

The conservatives are taxing income higher than the left province here. It is a big reason why the PST would never fly in Alberta an argument they make, but you never see online is that the average person already pays more income tax than BC. Ontario on the other hand is taxing everyone high amounts and has the HST.

Do people see a marked improvement in services from Ontario to BC or Alberta?
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