Canada's capital gains tax increase comes into effect on June 25. Andrew Chang breaks down some misleading claims about the changes coming from both sides of...
That’s the argument, but it doesn’t really hold water to me. That would lead to an environment where those with little capital get taxed on their entire income, making it hard to save more capital. Those that already have lots of capital could then leverage that capital to generate a tax-free(or limited tax) income, which seems like exactly what we’re trying to avoid. We do have TFSAs which do allow us to grow our assets tax free, and they’re limited to prevent those with excessive capital from dodging their entire tax burden.
To some extent, you might want it the other way around, those providing labour and covering basic living expenses should pay limited taxes(which is kind of how things work now when you consider the basic exemptions, GST rebates, child tax benefits, etc.) while those who have essentially a passive income should pay a higher rate. The argument for the current capital gains taxation is that you want to encourage people to invest in things like a business that grows the economy, rather than purely financial vehicles like bonds and loans that mostly just concentrate wealth without contributing to a healthy economy.
Oh I saw something in the globe yesterday about this. It’s because the corporations themselves pay income tax, which is essentially reducing the capital gain at the source. The numbers don’t seem to add up to me but I think I’d need an accountant to explain it.
That’s the argument, but it doesn’t really hold water to me. That would lead to an environment where those with little capital get taxed on their entire income, making it hard to save more capital. Those that already have lots of capital could then leverage that capital to generate a tax-free(or limited tax) income, which seems like exactly what we’re trying to avoid. We do have TFSAs which do allow us to grow our assets tax free, and they’re limited to prevent those with excessive capital from dodging their entire tax burden.
To some extent, you might want it the other way around, those providing labour and covering basic living expenses should pay limited taxes(which is kind of how things work now when you consider the basic exemptions, GST rebates, child tax benefits, etc.) while those who have essentially a passive income should pay a higher rate. The argument for the current capital gains taxation is that you want to encourage people to invest in things like a business that grows the economy, rather than purely financial vehicles like bonds and loans that mostly just concentrate wealth without contributing to a healthy economy.
Oh I saw something in the globe yesterday about this. It’s because the corporations themselves pay income tax, which is essentially reducing the capital gain at the source. The numbers don’t seem to add up to me but I think I’d need an accountant to explain it.