"Such measures would deter investment at a time when we are striving to boost competitiveness and innovation within the industry and across the economy."
We can already see the opposition’s false equivalence rhetoric take hold.
Here’s the difference:
Say you had 1M$ a couple years ago to invest (lucky you, was it a gift from your parents?).
Say you didn’t do much research and invested in a stock that was pretty low at the time and you sell after the new tax at which point you see a return of an extra 25% (you were pretty lucky to beat the market with little effort).
This means you get back 1.25M$ before taxes. The extra amount of money you have to pay with this new tax is exactly 0$ more than before!
This is because your gains are 250k$ and you still haven’t reached the new limit.
If on the other hand you were even luckier and somehow managed to get 30% extra (!!!). You’re only going to pay the increased rate on 50k$ that’s above the 250k$ you made.
Now if you’re starting out with 10M$ and get the same kind of return that new tax is going to bite.
Ask yourself though, who is playing with that kind of money. It’s not the vast majority of “people who invest”. It’s going to be the extra rich.
Don’t forget you only get taxed extra if you realize all those earnings in the same year. So not only do you need to make more than 250k you also need to have a reason to take it out all at once rather than a little bit each year as you typically would if it were retirement income or something along those lines.
We can already see the opposition’s false equivalence rhetoric take hold. Here’s the difference:
Say you had 1M$ a couple years ago to invest (lucky you, was it a gift from your parents?). Say you didn’t do much research and invested in a stock that was pretty low at the time and you sell after the new tax at which point you see a return of an extra 25% (you were pretty lucky to beat the market with little effort). This means you get back 1.25M$ before taxes. The extra amount of money you have to pay with this new tax is exactly 0$ more than before! This is because your gains are 250k$ and you still haven’t reached the new limit.
If on the other hand you were even luckier and somehow managed to get 30% extra (!!!). You’re only going to pay the increased rate on 50k$ that’s above the 250k$ you made.
Now if you’re starting out with 10M$ and get the same kind of return that new tax is going to bite.
Ask yourself though, who is playing with that kind of money. It’s not the vast majority of “people who invest”. It’s going to be the extra rich.
Don’t forget you only get taxed extra if you realize all those earnings in the same year. So not only do you need to make more than 250k you also need to have a reason to take it out all at once rather than a little bit each year as you typically would if it were retirement income or something along those lines.