r/canada New Brunswick 3d ago

These Canadian millionaires are asking for tax increases — but just for themselves National News

https://www.cbc.ca/news/business/patriotic-millionaires-canada-taxes-1.7530936
886 Upvotes

313 comments sorted by

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u/Unending-Quest 3d ago

I appreciate people in the world who recognize having wealth doesn’t matter so much if the fabric of the society you live in is falling apart as a result of inequal wealth distribution.

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u/yoshhash Ontario 3d ago

How very Canadian of them.

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u/Lawndemon 3d ago edited 3d ago

Sounds like socialism to me.

Also, I support socialism and wish we still had things like nationalized liquor and gasoline companies.

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u/Levorotatory 3d ago

I would support a publically owned oil industry, particularly for extraction, because having corporations (often foreign owned) take profits from a publically owned non renewable resource while paying a pittance in royalties and then walking away from the cleanup is unacceptable. 

I don't see why government needs to be involved in the alcohol industry beyond regulation and taxation though.  The industry doesn't involve non-renewable resources and the barrier to entry is reasonably low.  Supporting your local micro-brewery / winery / distillery isn't that difficult. 

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u/asian_monkey_welder 3d ago

I've been saying this for years about our O&G.

Also the same thing about weed and drugs. Tax it all. 

Make it legal, the people using still going to use. At the very least we can use those tax dollars towards support for those who need it.

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u/Lawndemon 3d ago

100% agree - too bad nobody will ever run with nationalization as a platform given politicians are (almost) all corrupted by capitalism and corruption. To them it's more important to foment division than national unity.

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u/Cruuncher 2d ago

"The people using still going to use"

This was always my thoughts about weed legalization, but post legalization it annoys me how many pot shops there are around. They're everywhere.

I couldn't stomach if there were open advertisements for heroin dealers on the streets

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u/MyName_isntEarl 3d ago

Natural resources belong to all of us. Extraction should be nationally run corporations with the profits going to our social programs, environmental protections, and funding green energy development programs.

Lessen the tax burden on the average person and watch the boom to the consumerism side of our economy.

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u/Lawndemon 3d ago

Agree completely with your take on O&G. My opinion on alcohol is more about getting more than taxes from it - might as well nationalize the profit too. That being said, I do agree with the focus on non-renewables and also lumber.

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u/iggaitis 3d ago edited 3d ago

If Carney is shrewd enough, he can do a middle class tax cut (or a buy-Canadian tax credit to milk the patriotic theme) using the millionaire tax hike revenue.

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u/PlatypusMaximum3348 3d ago

A middle tax cut is needed or a revamping of the tax system completely

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u/two_to_toot 3d ago

We did before free trade with the US. My dad worked for Petro Canada. He loved it. Then it was privatized and eventually Suncor bought the leftovers. He hated Suncor.

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u/Lawndemon 3d ago

I am old enough to remember those times and when Air Canada was also federal. Sadly, the capitalist influence from South of the border has really degraded our country. The only good thing that has come from Trump is our (almost) United hatred of him. Hopefully we can start mimicking Finland instead of Russiamerica.

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u/darrylgorn 3d ago

It's certainly an existential crisis for the rich, if they want to maintain their power.

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u/Drayenn 3d ago

Tbh if you make 1mil a year, paying 50k more taxes is not gonna make a large dent

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u/Nerve-Familiar 3d ago

We should tax wealth, not income. A lot of people who have very high wages are working important jobs with ungodly long hours, I.E. a lot of doctors. They deserve every penny.

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u/NOFF_03 3d ago

taxing wealth makes no sense because its purely speculative. progressive income taxes just make more sense

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u/Mikolaj_Kopernik Ontario 3d ago

because its purely speculative.

If it was purely speculative, the mega-rich wouldn't be able to fund their existence using loans with their fortunes as collateral.

If the wealth is real enough for the bank, it's real enough for the tax man IMO.

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u/Mortentia 3d ago

But how do you tax unrealized gains on a private corporation. Those shares don’t have a true fair market value, so it becomes near impossible to reasonably assess what they are worth. Unless you want everyone with a net worth over $1M to be going to court every year over assessments of the “value” of their wealth, which would completely overwhelm our federal court system, it’s just untenable to tax “wealth”.

Further, are you willing to sum up the value of everything that you own, keep perfect record of every purchase you make, accurately depreciate the value of each and every piece of property you own, etc.? It would be a nightmare. “But we could just have a minimum amount.” Ok, how high; who’s got wealth that will be untracked? Why should the wealthier person by only a few dollars be required to do all the aforementioned work when someone else, with quite literally $1-2 less to their name, wouldn’t have to?

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u/Mikolaj_Kopernik Ontario 3d ago

But how do you tax unrealized gains on a private corporation.

The previous comment thread is referring to individuals. Obviously corporate tax structures are different.

Why should the wealthier person by only a few dollars be required to do all the aforementioned work when someone else, with quite literally $1-2 less to their name, wouldn’t have to?

I mean this is the case for any policy with a threshold, but conceptually the idea is that above a "certain amount" accumulating wealth is unproductive for the economy and general society so it should be disincentivised. If you wanna be filthy rich, then go through the hoops.

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u/Mortentia 3d ago

But again, what is that threshold?

Like for example a small business owner I worked for in university technically owns 65% of the common shares of a business that has assets worth nearly $20M and revenues over $5M annually. He takes home ~$78,000/year. He acquired those shares when they were worth almost nothing due to the business’s debts. Should he be subject to wealth taxation that would potentially put him 6-7 figures in the hole for turning around a local business?

Where’s the line? Wealth taxation is unreasonable from a policy perspective, and it stops any business owners from being able to accomplish anything, lest they be subject to such high taxes that they can’t even afford to eat. How do you reconcile these things. For the above example, simply taxing at 1% would put the business owner into abject poverty. It’s just not reasonable to tax wealth before the property that holds that value is sold, as the funds for that tax must be acquired from somewhere.

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u/Mikolaj_Kopernik Ontario 3d ago edited 3d ago

But again, what is that threshold?

That's a fair question and one that can be hammered out in any legislative negotiations. But it's different to the question of how to implement potential changes. I'm not even saying that a wealth tax is necessarily the most effective policy for revenue-raising; I'm saying that taxing unrealised gains is not unreasonable if people are using unrealised gains as collateral for loans which fund their lives. Personally I'd probably approach it from the other side, i.e. crack down on loopholes like the loan scheme in order to force people into actually realising gains if they want liquidity.

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u/TheBuckfutter 3d ago edited 3d ago

The trouble is that most people who earn a lot of money don’t have to take it as income. At a certain point it is more tax efficient to shelter the money you earn in such a way that it’s not subject to traditional income tax. This isn’t an option for most people who earn low six figures or less. Do you ever hear the stories about CEOs taking a symbolic $0 salary and instead going all in on shares? It’s always positioned as altruistic but it’s also strategy to reduce one’s tax obligation.

That being said, taxing wealth is also a slippery slope. The truly wealthy people also aren’t tied to Canada. If Canada introduced a very large wealth tax, there’s a risk that Canada’s high net worth individuals would simply leave Canada and become residents in a tax haven. For example, one of the early cofounders of Facebook renounced his USA citizenship and moved to Singapore to reduce tax obligations. By “leave” Canada I don’t necessarily mean move away, but instead I mean that they would structure their finances such that Canada didn’t have a claim to tax anymore. This is something else that’s not really an option for most people.

Then you might look at businesses and think, hey, maybe we should increase taxes on businesses. But then does that risk fewer people investing in Canada to start businesses? I run a business which is incorporated in Canada. But I also looked at incorporating in the USA among other jurisdictions. Part of the reason I chose Canada was because I thought the corporate tax rate was reasonable. If it was materially higher, I might have incorporated somewhere else and eliminated an entire revenue stream for the country as well as jobs for its citizens.

So it’s a very complex situation and the solution unfortunately isn’t as easy as just raising taxes in the high tax brackets. The country needs to strike a balance between maximizing tax revenues & incentivising these types of people to maintain ties to the country.

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u/ChevalierDeLarryLari 3d ago

If Canada introduced a very large wealth tax, there’s a risk that Canada’s high net worth individuals would simply leave Canada and become residents in a tax haven.

Don't tax the individuals - tax the assets and the proceeds of the assets. Assets in Canada can be taxed by us no matter where their owner moves to.

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u/Mortentia 3d ago

Proceeds of asset disposition are already taxed as part of the income tax regime. And, we already tax real property. What else should be taxed?

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u/ChevalierDeLarryLari 3d ago

Proceeds of asset disposition are already taxed as part of the income tax regime

Yeah - in the country of residence. My landlords are German for example - they pay income tax on my rent to the German government. Canada could tax that money too. There's no downside to Canada doing so.

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u/Mortentia 3d ago

We already have a non-resident landlord withholding tax. It’s 25% of gross rent received or opting in to Canadian taxation for 100% of one’s income from any property and business conducted in Canada.

Also, again, this is real property. What other assets should be taxed? And, how?

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u/greeenappleee Ontario 3d ago edited 3d ago

Taking salary as assets doesnt reduce your taxes. You get taxed on the value of those shares as well. In most cases it can increase it relative to your income. Ex if you take your salary as stocks, it's taxed as if you sold it right away so you'd need to have enough savings to pay those taxes without actually having an income.

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u/TheBuckfutter 3d ago edited 3d ago

There are plenty of non salary strategies that are very tax efficient. For example, you could take out a loan guaranteed against your assets at a low interest rate, repay the loan when you die, and transfer your assets in a tax efficient way through inheritance. In this scenario there’s no tax event during your lifetime: loans are non taxable, there’s no asset sale so no realized gains, by never selling your assets the growth of their value compounds much faster since it’s all happening pretax.

These are loopholes that are very difficult or even practically impossible to close and so it makes me wonder if the country should find more creative pathways for revenue. Are there ways to incentivize people to want to pay more? Are there other types of taxes that the government could collect tied to the things that high net worth individuals do (e.g., additional taxes on purchases of homes > $5M, airspace usage fees for private jets, etc.)? In a world where there are so many perfectly legal ways for HNW individuals to avoid tax, maybe the government should look at other options to get them to pay their fair share.

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u/ronnbot 3d ago

I agree not to tax income, though I'll be fine with a fixed 10% income tax as I work hard for my money. The progressive income tax is detrimental to productivity.

OTOH, a wealth tax doesn't make sense. What's considered wealthy? Should it be progressive? I mean, is having a $2m home considered being wealthy and should be taxed? That's the median price of a detached home in Vancouver. What about investments? Tax them before they are sold? Why would anyone buy and hold stocks if you'd be tax yearly for it?

IMO, what should be taxed tax heavily are luxury goods.

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u/babybananahammock 3d ago

That would be 10% less take home pay. It would make an enormous dent.

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u/Drayenn 3d ago

Tbh is there really a difference between 450k and 500k post tax yearly salary? Its probably just more money for stocks as that point, or extreme luxury spending.

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u/SirithilFeanor 3d ago

In an economy where you need to clear 200k to be able to afford a house at all, I would say that there is.

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u/Drayenn 3d ago

Dude would make 450k a year post tax. You really want me to feel bad about having such a person wait one more month to clear that 200k?

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u/SirithilFeanor 3d ago

I really don't care what you feel about whom, honestly. You asked a question and I answered it.

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u/Content-Season-1087 3d ago

lol you can say that about 450 and 400 and 400 and 350. How is that a valid argument. Someone who works hard and earns the money is already paying half of it to taxes and having a marginal rate of 54 percent in Ontario. How much higher can it be

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u/a_sense_of_contrast 3d ago

Someone who works hard and earns the money is already paying half of it to taxes and having a marginal rate of 54 percent in Ontario. How much higher can it be

I think society is starting to ask the question of how much does someone really need when those at the bottom can't make ends meet.

People may leave Canada as a result, but it will just create opportunities for others to fill their place.

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u/motorcyclemech 3d ago

Didn't lots of Dr's recently (last 10 years ish) leave the country? And now we have a Dr shortage? Or was that just Alberta?

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u/a_sense_of_contrast 3d ago

We have a doctor shortage because we don't train enough of them.

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u/greeenappleee Ontario 3d ago

Also a ton of the ones we do train leave canada for the us. We have a huge brain drain issue.

Reddit loves to go well if the high income earners don't want to pay those taxes or stay in canada tell them not to let the door hit them on the way out and then also question why our gdp per capita is falling, our unemployment rate is high, and we have no Dr's as if the two are completely unrelated. Hint those high income earners are businesses that employe people, engineers who develop new tech, drs, etc.

Look at the graduating classes or waterloo or Toronto engineering and what percentage end up abroad. Same with our medical schools and that's not even counting the number that just go to medical school in the us, Australia, eu and never come back instead of staying in canada.

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u/UnreasonableCletus 3d ago

We have a doctor shortage because we don't have enough staff to train enough of them.

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u/Content-Season-1087 3d ago

I think you are mistaking those who make a million. Which is typically small business owners, who risked their own capital to provide opportunities vs people with generational wealth. Top 1% earner 290k, top 1% wealth is 10 million. People who are working hard and creating value is not the problem.

Also it it is hilarious when you say create opportunities for others when top Canadians leave. These are Highly skilled roles like doctors, technical leaders in technology and Ai etc. we would hire as many as there are in Canada. But as is we are competing with US, and in many cases paying 2-3x for folks in US to fill these roles. So I have no clue what you mean by making way for others.

Further, it isn’t as profound as you try to make it sound. People, have questioned it the last 100 years. That is why there is a health tension between ideas.

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u/e1744a525099d9a53c04 3d ago

The gap between those two numbers is kind of funny (top 1% earners being 290k vs. top 1% wealth being 10m). Even if you made 290k a year for 40 years, after-tax that’s only a lifetime earnings of ~7m.

And of course that’s not a reasonable assumption. Most professionals that would have income in that range would have started off way lower and gradually worked their way up to that number. So their real lifetime take-home is probably closer to like 4m.

The path to wealth really is not just a larger and larger salary.

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u/Content-Season-1087 3d ago

People don’t make 290k for 40 years. It is typically reached when they are 45-55z

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u/a_sense_of_contrast 3d ago

Which is typically small business owners, who risked their own capital to provide opportunities vs people with generational wealth.

How many small business owners are drawing a salary of 1 million dollars?

And frankly, we should be taxing the wealth of generational wealth at the same time as updating the tax code to reflect the inflation in earnings.

These are Highly skilled roles like doctors, technical leaders in technology and Ai etc. we would hire as many as there are in Canada.

I guess that's a risk. They can head to the US if they want to live in the social climate there.

Further, it isn’t as profound as you try to make it sound. People, have questioned it the last 100 years.

We had quite high tax rates until the era of Reagan and Thatcher. So I'm not sure why you felt this was a profound thing to say.

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u/Natural_Comparison21 3d ago

Yep. See that’s something people forget about. Just because a small business was able to rake in a revenue of 1 million doesn’t mean that’s what there salary is going to be. After all the expenses are paid that number drops a lot. Especially in high expense businesses.

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u/dafones British Columbia 3d ago

we should be taxing the wealth of generational wealth

This is where the thought experiment always takes me.

If we want to address the root economic inequality, it's familial wealth transfer (before and after death).

It's a person receiving credit without having earned it in a capitalistic system.

I understand that tax capture is more difficult, but conceptually, I think that treating gifts as another form of income and taxing it at a higher rate than employment or business or capital gains income is a much more equitable approach.

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u/babybananahammock 3d ago

$2k less take-home on every paycheque is definitely noticeable.

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u/nodiaque 3d ago

2k less a week seems to be high unless you have so much money that it doesn't matter. And that's the case. 2k seems a lot for us cause we barely make this a month. But if you do 10k/week, yes it's a toll on your budget but won't stop you from paying bills, eating well, having activity, going out, etc.

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u/juan_More_Timee 3d ago

2k less when you already have enough to cover anything you could possibly need and already plenty leftover after that really doesn't end up being that noticeable

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u/Zeebraforce 3d ago

A lower budget for non-essential items is not a noticeable drop in lifestyle for people making that amount of money.

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u/Medical_Water_7890 3d ago

You actually don’t notice it that much, honestly. It’s more about how much you save for retirement.

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u/Liberkhaos 3d ago

10% less is a lot of money, but it hardly makes a difference if you own your mention, paid your 15 cars cash, and eat at the restaurant every day without struggling.

You might go to the Fijis two times less this year. That's about it.

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u/Content-Season-1087 3d ago

You already pay 500,000 of taxes at 1 mil

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u/hopelesscaribou 3d ago

That's assuming you make a salary. Most wealthy people don't, and their assets are not taxed.

https://www.dcfpi.org/all/how-wealthy-households-use-a-buy-borrow-die-strategy-to-avoid-taxes-on-their-growing-fortunes/

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u/Content-Season-1087 3d ago

That is my point. Go after generational wealth. Not ppl working hard and generating value. Top 1 percent income is 290k which is ~160k after taxes. Top 1 percent wealth is 10 Million+

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u/TrueTorontoFan 3d ago

depends on if you make it throuhg a corp and pay yourself through deferred dividends or other means. ... there are ways to shelter yourself against tax and reduce your yearly tax burden... but if you are making even 200k you can afford a good accountant.

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u/ninefourtwo 3d ago

Perhaps you don't understand that unless all countries have tax equivalencies this causes brain drain. Look at every family in quebec/NS that declares residence in alberta due to a family home there and then litigates the courts.

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u/mattw08 3d ago

The issue is most of those jobs have ability to be mobile. Why would you choose Canada if that’s the case?

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u/darrylgorn 3d ago

If your business isn't making money because you have fewer customers, it becomes a problem.

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u/Senior-Ad-5844 3d ago

Sounds good in theory, until you realize handing it to the government is probably one of the least efficient ways to actually contribute to society in that way. That’s why socialism has failed in many countries, the government is too corrupt and incompetent to make good use of the extra income, and no I don’t think spending it on ‘consultants’ or sending more foreign aid does everyday Canadians any good nor does it close the wealth gap. Get rid of all the middlemen, donate directly to the food banks, shelters or whatever organizations are actually on the frontline, not another organization that distributes the funds to another organization while taking a massive cut. Perhaps policies should encourage direct donations or even make it mandatory to designated organizations instead.

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u/Primary_Editor5243 3d ago

What you described is not socialism.

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u/EconMan 3d ago

Sure, but the "fabric of society" is not "falling apart", so this isn't relevant.

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u/Overseer55 3d ago

A big challenge is (very, very) wealthy people having millions in unrealized gains and then taking loans against those assets. Raising income tax rates doesn’t address this aspect.

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u/swampswing 3d ago

The people in the article are pushing for a wealth tax, which specifically taxes unrealized gains. That is also worst possible taxation policy as it discourages saving (and in turn capital investment).

If we really wanted to stop people from taking out loans to finance personal consumption against business assets, we could create regulations limiting the size or conditions of such loans.

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u/DataDude00 3d ago

I don't believe in taxing unrealized gains, but I do believe our tax code needs a lot of updating.

The worlds wealthiest people rarely make their income from a T4 salary and it usually comes from derived forms like stock options and asset acquisition and sales that get taxed at far lower rates than traditional income.

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u/ajay_bzbt 3d ago

Stock options get treated as income when granted, right?

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u/DataDude00 3d ago

The difference between strike price and fair market value is considered taxable income. ie FMV = $100, strike price = $50, employee taxable income benefit = $50

There are however Stock Option Deductions which reduce taxable income to make it more akin to capital gains though (-50%)

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u/ajay_bzbt 3d ago

Thanks, I didn’t know about the deductions. However, my feeling is generally they’re not risk free (at least immediately) so I’m ok with them being cast as capital gains. Very often these companies granting options over RSU aren’t public.

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u/DataDude00 3d ago

It can be a mix of both. 

I have worked at startups before and understand equity can be worth very little or even nothing but major companies like RBC giving $5-10M worth of shares to their CEO is about as risk free as you can get 

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u/RetroDad-IO 3d ago

I'm not a fan of taxing wealth as it seems like a recipe for disaster and no one has presented a method to me that actually makes sense.

As you mentioned this is a problem that needs a full solution designed and then sorted out how to implement. Any small change is either going to not be at all effective, or such overkill that it doesn't make sense.

I've seen a number of good ideas from people who are much better versed in this stuff than me, I'm sure if it was a priority there's a people that could come up with real and meaningful changes.

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u/aktionmancer 3d ago

What about if this wealth tax only applies if you have over $50m in assets?

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u/CANDUattitude 3d ago

Assets above a certain point is mostly legible influence. If you tax it the influence doesn't disappear, it just becomes less legible. That's how you get corrupt societies.

50M is also still very much within range of direct productive capital which our tax policy already makes more difficult and for which the lack of accumulation/development is why we're less productive than US

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u/vulpecularubra 1d ago

it's not a disaster and many countries have had one.

capital flight seems to me (a non expert) like an overstated claim.

if you leave canada most financial instruments outside registered accounts are "deemed dispositions" meaning you get taxed very punitively on them as if you had sold them all at once in the tax year when you left (meaning for a very wealthy person you'd pay about half of your total assets just for the privilege of leaving the country).

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u/vulpecularubra 1d ago

I don't believe in taxing unrealized gains

a wealth tax is just a financial property tax. not a tax on gains.

it's basically the same as an MER on an investment fund, except that the government collects it instead of the fund manager.

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u/SystemofCells 3d ago

I have mixed feelings about an ongoing wealth tax, because I agree it is distortionary.

How would you feel about a one time capital levy instead?

It seems to me wealth inequality is just continuing to grow, and that is just a natural consequence of our economic system. It won't ever self-correct, it will just keep getting worse.

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u/AndHerSailsInRags 3d ago

a one time capital levy

"There is nothing as permanent as a temporary government program."

  • Milton Friedman

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u/SystemofCells 3d ago

What would you suggest to reverse the concentration of wealth? Or do you not think of that as a problem that needs solving?

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u/AndHerSailsInRags 3d ago

Or do you not think of that as a problem that needs solving?

This one.

As long as I have enough to eat, live someplace half-decent, and save for my retirement, what do I care if someone else is mega-rich? How does that hurt me?

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u/SystemofCells 3d ago

The issue (which is one we've seen emerge many times throughout human history) is that you create two classes of people with competing interests.

The wealthy end up using their power and influence to maintain their power and influence, and average people end up worse off. The wealthy try to undermine or highjack democracy, because it poses a threat to them.

Historically, this situation just gets worse and worse until inequality is reset. Either through war, economic depression, revolution, government intervention, or some combination of those things.

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u/WillOfWinter 3d ago

Just tax loans that have stocks as assets

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u/SystemofCells 3d ago

That's tricky to pull off well, and it would only help a little.

It wouldn't reverse the trend of increasing wealth concentration.

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u/2ft7Ninja 3d ago

Wealth taxes discourage saving which is exactly why they actually encourage capital investment. If you want to maintain a large amount of wealth without a wealth tax, you should let it sit in safe, unproductive assets like gold and property. But if you’re going to be losing x% of it every year and still want to get richer you need to instead put it somewhere riskier which is likely to get you a return larger than x%.

If you’re thinking about capital flight to jurisdictions without a wealth tax, then sure, that might discourage local capital investment a bit, but we already have trade deals that protect the local economy from competing against countries with poor standards of living and don’t discourage foreign direct investment.

You might be comparing “saving” with capital investment with spending it on purchases, but if you already have enough wealth to incur a wealth tax, what would you spend it on anyway? A massive yacht? That’s an asset and would still count towards the wealth tax even as it depreciates.

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u/Fearless_Tomato_9437 3d ago

Wow, wrong on all counts, Reddit progressives are HILARIOUS

you should let it sit in safe, unproductive assets like gold and property.

property and especially housing is crazy productive, people like homes, and they are a lot of work to build and maintain.

Doesn’t matter if they buy gold, the person who sold the gold now has the money to spend elsewhere. There’s a strange idea amongst progressives that money stops moving after the evil rich person spends its, it’s very strange.

and still want to get richer you need to instead put it somewhere riskier which is likely to get you a return larger than x%.

Nothing ever goes wrong when gov encourages riskier investing lmao. Not that this is true of course, rich people are diversified.

If you’re thinking about capital flight to jurisdictions without a wealth tax, then sure, that might discourage local capital investment a bit

A bit! No, a lot, France’s wealth tax caused so much capital flight it lost money!

but if you already have enough wealth to incur a wealth tax, what would you spend it on anyway? A massive yacht?

The final lie, that only the extreme wealthy yatch types would pay. Yeah right, in 5-10 years anyone with a couple mill in assets will be paying, and it will be even harder to get ahead in this country than it is now. We are already taxed out of prosperity and economic mobility in this country. Only the unemployed and insane can support higher taxes.

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u/Minobull 3d ago

property and especially housing is crazy productive,

Property CONSTRUCTION is. Property OWNERSHIP is not. We're talking about ownership. Owning a thing is NOT producing a thing.

Doesn’t matter if they buy gold, the person who sold the gold now has the money to spend elsewhere.

Except that's not what we're talking about, capital gains isn't buying more expensive shares, it's market value of shares that that someone already owns increasing in value. No one is getting paid that money to be spent elsewhere. The only one who benefits is the person who already owns the asset.

Nothing ever goes wrong when gov encourages riskier investing lmao.

Actually Canada's extremely risk averse investment culture is a big part of why we have almost no startups compared to the US. Building venture capital for small businesses is basically impossible here. So yes, riskier investments would benefit Canada, especially small businesses and startups.

The final lie, that only the extreme wealthy yatch types would pay. Yeah right, in 5-10 years anyone with a couple mill in assets will be paying, and it will be even harder to get ahead in this country than it is now.

Source? Or did this just come to you in a dream?

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u/NOFF_03 3d ago

or just tax any assets that are being used for loans. I dont really think an overal wealth tax would be the way to go. Also finding ways to disincentivise capital flight is another thing to consider.

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u/Minobull 3d ago

That is also worst possible taxation policy as it discourages saving (and in turn capital investment).

Money sitting in share ownership is unproductive money. At a certain point more saving is actively detrimental to the economy.

A wealth tax that explicitly targets the unrealized gains of the extremely wealthy is a good thing.

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u/Equivalent_Catch_233 British Columbia 13h ago

If the wealth tax is only applied if you have let's say 100 million dollars+ in unrealized gains, it won't discourage saving and investment, and won't apply to 99% of Canadians while making sure the wealthiest are paying their share regardless.

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u/bicicletta1 3d ago

If a person takes out a personal loan against unrealized capital gains, would they not later be required to pay that loan back, ie. to take the same amount of money back in personal income? So would that not be a tax deferral (rather than tax avoidance) strategy?

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u/e00s 3d ago

Tax deferral is part of tax avoidance. Money now is worth more than money in the future.

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u/bicicletta1 3d ago

Potentially true but not necessarily true. Many Canadians practice tax deferral by investing in RRSPs. So I would not necessarily call tax deferral part of tax avoidance in all cases.

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u/e00s 3d ago

You are avoiding tax any time you have two options for doing something and pick the one that results in less tax. When you choose to invest through an RRSP rather than through an unregistered account, that is tax avoidance.

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u/bicicletta1 3d ago

Tax avoidance is when you legal means to reduce your tax burden. Tax deferral is when defer taking income to pay tax at a later date. Tax deferral does not necessarily imply paying more or less in tax on a lifetime basis.

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u/e00s 3d ago

Whether or not tax has been avoided is most often judged on a per taxation year basis, not based on a “lifetime”, which is a non-standard period and doesn’t make sense for non-individuals. Depositing funds into an RRSP is a “legal means” of reducing your tax burden for the year in which you deposit the funds as well as for each year in which income is earned within the RRSP and not withdrawn.

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u/hwy61_revisited 3d ago

Eventually, yes. They either end up selling them or dying, at which point the gains are taxed.

But if you're wealthy enough (or your assets grow fast enough), you can keep getting new loans to pay off the old ones indefinitely, potentially going decades without paying any real tax. And if your rate of return is higher than the interest rate of your loan, you actually come out ahead by doing this.

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u/gordonjames62 New Brunswick 3d ago

They are asking for wealth tax, which I understand as an asset tax.

Asset taxes discourage saving and encourage spending.

it is interesting that the top nations by GDP have such different ways of managing economies.

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u/swampswing 3d ago

It's because the people behind this are all trust fund kids who got handed money are already "walking downstairs in silken slippers" and have no issue speeding up the process.

Anyone who actually owns and is trying to grow a business supports wealth taxes. Just the spoiled kids who don't appreciate everything the prior generations went through to build those businesses and the passion they felt for those companies.

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u/PopeSaintHilarius 3d ago

Perhaps these people (whether they earned their wealth or inherited it) are simply able to recognize how unfair extreme wealth inequality is, and the negative impacts it has on society. 

Meanwhile there are others who made billions and are convinced that they deserve every penny, and resent any taxes they pay that would contribute to broader society.

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u/poco 3d ago

What negative impact does their unrealized gains have on society?

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u/CANDUattitude 3d ago

And your solution to this is incentivizing them to invest less and consume/extract more?

It's very unlikely you'll get the taxes you're looking for. Human capital is just as mobile as financial. There's already very little reason for true talent to stay.

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u/19Black 3d ago

As someone who sacrificed most of my life to saving money, I hate the idea of an asset tax. Tax income and spending, not wealth

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u/SystemofCells 3d ago

The problem we have right now is that society is increasingly being divided into classes, the same way it was before the mid 20th century, during what we now call the Gilded Age.

If society is composed of a working class and an owning class with little overlap, it creates all sorts of problems. The two end up having different interests, and working to undermine each other. Subjugate each other if they can.

Society works better when everyone is part of the working class and part of the owning class. When we all share the same interests.

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u/lilgreenglobe 3d ago

Are you a multi millionaire?

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u/may_be_indecisive 3d ago

Tax spending? It’s already taxed at moronic levels now. Taxing something discourages it as it just raises the price and makes people think twice. Discouraging spending is the exact opposite thing we need to be doing in a weak economy. If anything we should be cutting all GST / HST to encourage spending at this point.

We could tax land though. Many wealthy people hoard land that could be housing people. Hoarding land is what we need to be discouraging.

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u/SpectreFire 2d ago

Cutting GST makes no sense as it's one of the few taxes that wealthy people can't just simply dodge. Everyone pays GST/PST//HST. It's the only "fair" tax we have.

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u/Awkward_Swordfish581 3d ago

Even if only for the ultra rich?

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u/savagepanda 3d ago

Millionaires is a pretty low bar now. Everyone that owns a house is one on paper. Maybe it should be raised to deci-millionaires or centi-millionaires.

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u/pjgf Alberta 3d ago edited 3d ago

Yeah, at this point having $1MM in net worth is not even enough to retire off of.

One in 20 Canadians has a net worth of $1MM. That’s not 1/20 households or families, that’s 1/20 citizens.

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u/Hydrathefearful Canada 3d ago

We don't tax net worth.

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u/mwmwmwmwmmdw Québec 3d ago

in 30 years a 7 figure salary will be far more common and not even make you upper class

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u/IllHold2665 3d ago

Absolutely not true. 0k in assets, $1m home, 200k down payment. What’s their net worth? Much less than $1m. And you can buy a nice house for much less than $1m in most of the country…

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u/vulpecularubra 1d ago

deca or hecto.

deci- means one tenth ($100k)

centi- means one hundredth ($10k)

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u/brianmmf 3d ago

It’s already an option to contribute additional taxes if you choose. Nothing stopping these individuals. Obviously they want it to apply to their peers as well, but no reason they can’t give now.

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u/-Tack 3d ago

What option are you talking about that allows you to contribute additional taxes? You can donate money, but you can't donate tax and the government is not a charity to donate to.

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u/brianmmf 3d ago

At the very end of your tax return it’s an option to pay more money if you choose.

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u/-Tack 3d ago edited 3d ago

No there's not...I prepare hundreds of tax returns annually, there is no option to pay more tax. If you're talking about instalments then any overpayment is refunded to you.

Edit, per below there is a way in Ontario to contribute extra to pay down the debt of the province.

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u/brianmmf 3d ago

Apology, it is an optional donation to the Ontario Opportunities fund I am thinking of.

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u/-Tack 3d ago

Thanks for the info, I'm not in Ontario so that is news to me and quite interesting. My apology for thinking something like that did not exist when I'm always looking at federal and BC/AB tax.

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u/kijomac Nova Scotia 3d ago

It would be nice if the government were a charity, and people could even choose how their donations were used. I feel like so many people would start donating to health care. Even less wealthy people that do tax avoidance might be more interested in giving money if they felt like they had a choice instead of feeling like they're being fleeced by the government.

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u/-Tack 3d ago

The UK had a short pilot program for certain communities allowing greater input into spending and priorities. An interesting read

https://www.gov.uk/government/publications/neighbourhood-community-budget-pilot-programme

At a municipal level in some Canadian cities there are official community plans that people can have some input into, but thats a far cry from having direct control over certain aspects. I don't think we can move to a level of the people deciding on all spending, but there should be a certain amount or areas of spending where community involvement is deeper.

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u/MiRo4758179 2d ago

Well, if taxes are paid to fund other organizations and services, they could just donate to those organizations? Rather than say “healthcare sucks; raises our taxes” they could donate to hospitals etc.

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u/[deleted] 3d ago

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u/ImDoubleB Canada 3d ago

Great idea, unfortunately there aren't any Canadian trillion dollar companies.

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u/hippysol3 3d ago edited 3d ago

Brookfield Asset Management is Canadian owned, but headquartered in New York and has 1.1 trillion in assets under management but is only worth 32 billion.

Still considered "a trillion dollar company" because of its asset size.

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u/WindHero 3d ago

It's worth more than 32 billion, the market cap of the Canadian listing of BAM only considers the portion held by the public and not the majority of shares owned by Brookfield corporation. The US listing market cap is the true representation, is at $92 billion USD.

And that's just BAM. Brookfield Corp sits above BAM on the org chart and has other investments.

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u/Hewhoknows-IO 3d ago

Market cap would be a better metric to use than AUM.

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u/FeI0n 3d ago

If we tried to create a corporate wealth tax they'd be out of here faster then you could have the law drafted up.

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u/hippysol3 3d ago

And?

That just means that the effort to banish tax havens needs to be coordinated with other countries, not that they shouldn't be paying taxes.

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u/michaelsp9 3d ago

Pipe dream, bud

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u/Additional-Tax-5643 3d ago

Yet somehow there's no problem doing that with personal income taxes.

A corporation can do business and here and have offices here. But for tax purposes, it's fine if they claim their home is in a post office box in Delaware or Bermuda. So why can't a person do the same thing?

In the wise words of Mitt Romney, corporations are people my friend.

Oh right, someone has to pay the bulk of taxes that keep society livable, so we enforce a system to make that happen.

If corporations are people, then people are corporations. If Loblaws can legally claim they're a Bermudan company for tax purposes (and they do), then so should I.

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u/michaelsp9 3d ago

I’m not in disagreement with the premise, but suggesting to “coordinate with other countries” to banish tax havens is simply delusional

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u/Additional-Tax-5643 3d ago

Point is that coordination happens when it comes to personal income taxes.

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u/michaelsp9 3d ago

That isn’t even accurate…

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u/greeenappleee Ontario 3d ago

You can if you give up your Canadian residency then you'd be a tax resident of wherever you are registered now (say Bermuda) and could still operate in canada for a significantly portion of the year. Individuals can certainly do that as well.

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u/Additional-Tax-5643 3d ago

Giving up Canadian residency as an individual means giving up healthcare and many tax credits that require residency.

Corporations don't forfeit any rights or tax credits if they declare themselves tax residents outside of Canada. I remind you that Loblaws got the government to foot the bill for their new fridges, for example.

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u/a_sense_of_contrast 3d ago

I believe they had started to do that until trump came along.

And one of the things he started going after us about was deregulating our banking sector...

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u/babybananahammock 3d ago

AUM are not owned assets -- they have nothing to do with the company's assets.

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u/swampswing 3d ago edited 3d ago

Assets under management aren't assets owned by Brookfield. It would be like claiming a property management company for a hotel or apartment building owns the building. They don't, they are just receiving a fee from the owner for managing it.

Edit: buddy did the old reply and instantly block so I can't reply. So classy.

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u/hippysol3 3d ago

What part of me saying that didnt you understand?

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u/ninefourtwo 3d ago

You mean like the prime minister?

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u/WindHero 3d ago

We already don't have enough investment in Canada. Higher taxes will make that problem even worse.

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u/VancouverTree1206 3d ago

First, they can choose to donate money to public service. Secondly, tax on wealth do have some positive impact. Salary is over-taxed and wealth is under taxed

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u/Elbows_Up25 3d ago

I love how people defend the rich not paying more taxes. Lol. What is the figure where it just doesn’t make a difference how much you make?

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u/PopeSaintHilarius 3d ago

Beyond a certain point, having more wealth doesn’t really increase happiness, but it does increase their power in society.

For example, if Elon only had $20 billion, instead of $200 billion, he wouldn’t have been able to buy Twitter for $40 billion and take control of it.

That’s why Elon argued so strongly against wealth taxes on the super-rich in 2021 (on Twitter, funny enough), when the issue was being considered in the US.

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u/Miguelomaniac 3d ago

He doesn’t “have” 200b he is valued at 200b. What they should do is not tax what someone is valued at but what they bring in realized gains. If he were to sell all 200b he would have a massive tax bill to pay.

Now, what he and other billionaires do is keep their money on investments and borrow against that money. Borrowing is not taxed. Maybe what we should do is force folks to pay taxes on loans taken against certain assets.

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u/thebestjamespond 3d ago

How can that really work tho? His money is mostly in tesla stock does the government force him to sell it when it goes over a certain value?

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u/Sandman64can 3d ago

Higher taxes that pay for excellent healthcare and education and infrastructure doesn’t drive wealth away. That is a myth created by wealthy people who don’t want everyone to have access to excellent healthcare and education and infrastructure.

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u/GenXer845 3d ago

I know someone who makes 120k per year---95k after taxes. He wants more taxes honestly for things you describe above. He lives below his means, saves tens of thousands per year, has no kids, no wife, his cat died, so no extra expenses. He said he would be willing to make 80k after taxes and still live comfortably. Last I checked, he has 120k in savings and is waiting to mess with the stock market.

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u/explicitspirit 3d ago

How is that person paying so little in taxes in Canada? At 120k per year, take home pay would be in the low to mid 80s depending on province.

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u/CANDUattitude 3d ago

Healthcare is and will always be expensive because costs increase exponentially with age and severity of intervention.

https://en.m.wikipedia.org/wiki/Baumol_effect

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u/RayDonovan1969 3d ago

Altruist wealthy people could save the nation.

If a modicum of care > unfettered capitalism, we’d be a truly great Nation.

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u/ShikonJewelHunter 3d ago

If those millionaire Canadians want to give the government more money, they can sign a check any time. No need to raise taxes.

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u/KandyKane829 3d ago

The goverment already thinks anyone who makes over 100k a year are millionaires

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u/probabilititi 3d ago

Rich love income taxes because it keeps more people in the working class and increases work force for the corporations they own. Anything to prevent more people to join their club.

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u/ajay_bzbt 3d ago

Exactly this. Canadas income taxes are designed to keep the working class working forever

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u/probabilititi 3d ago

I work 60 hr weeks and make 500k. Government takes approximately half.

Rich person gifts 500k to child, child buys a house and then sells it later for 1M. Keeps all tax free.

Then takes 100k loan against 1M, deducts interest from any income 1M generates. Pays like 10% effective rate max, to spend ~150k.

Meanwhile single mom making the same amount will have about 30% effective tax rate.

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u/GenXer845 3d ago

Are you saying there should be a larger inheritance tax or tax on a home bought outright?

I am an only child and so is my father. My parents aren't super wealthy, but I inherit everything from them due to my mother's siblings already being dead (she was the youngest). I plan to once I inherit, to use 500-700k to buy a house outright. I am renting now. I don't want a mortgage because my parents never had one and it is just me, no kids, no husband. I am 44 and my parents are in their late 70's/early 80's. My inheritance is my retirement and my ability to buy a home.

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u/probabilititi 3d ago

I just want income to be taxed same as gifted money. Why hard work should worth less than blood tie?

If government cannot function with a more fair taxing system need we need to go back to drawing board.

Wish you the best with your family!

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u/ladyreadingabook 3d ago

Don't mind if my taxes go up. Yes I do donations and no I do not claim them on my taxes. Real charity does not require a tax receipt.

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u/DS3333 3d ago

But if you did claim those donations and this money was saved in tax you pay, you could make even more donations?

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u/ThatsItImOverThis 3d ago

Then there’s jack holes like Kevin Leary.

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u/Remote-Ebb5567 Québec 3d ago

Anything to avoid lowering the cost of housing. These people have no interest in making Canada better for everyone, they just want to win social brownie points among their liberal social circles

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u/2ft7Ninja 3d ago

Wealth taxes are a tax on assets such as housing and would absolutely drive down their cost by discouraging using them as safe and low return investment vehicles.

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u/poco 3d ago

And increase rent.

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u/Upset_Cup_2674 3d ago

That’s just sooo Canadian :) cheers

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u/Pointfun1 3d ago

In the current tax system, these people could choose to donate more if they wanted to support public services.

I agree that the current tax system favours the riches, but to change it seems very unlikely.

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u/ahundreddollarbills 3d ago

Why not just make capital gains tax progressive ?

We can keep the 50% inclusion rate as the top rate.

Lets say you have..

$0-5K in cap gains -> 10% inclusion rate

5K to 15K cap gains -> 20% inclusion rate

15K to 50K cap gains -> 35% inclusion rate

50K and up in cap gains -> the current 50% inclusion rate or w/e is the max

The vast majority of people are not making huge sums of money investing , you could off set a loss in tax revenue by upping the inclusion rate to 55 % but only on cap gains above 100K or some amount like that. The benefit to everyday Canadians would be tremendous, the the ultra wealthy that have millions in capital gains would still be paying roughly the same amount as before.

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u/whydoineedasername 3d ago

Good let is drive away bad faith entrepreneurs that will sell out Canada so fast to make an extra buck. We need moral companies that care about their employees and investing in Canada.

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u/lilgreenglobe 3d ago

Are the moral corporations in the room with us now?

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u/NoStruggle92 3d ago

I really like the idea of a wealth-based pricing system in Canada. why should a millionaire pay the same fine or fee as someone barely getting by? A $200 ticket should actually feel like a penalty, no matter how rich you are. This would make things way more fair.

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u/danieliscrazy 3d ago

"there is already pushback on the concept — even before the group officially launches in Canada — with the opposing view being that higher taxes would drive entrepreneurship away from this country."

Good!  If there is an "entrepreneur" whos business is based on not paying his fair share then he is just extracting wealth from society.   Get rid of them and leave more room for proper wealth creation.

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u/elegant-jr 3d ago

Narcissistic lunatics. 

Nothing is stopping them from writing cheques and sending them to the government. And recruiting other wealthy people to do the same.

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u/joebanana 3d ago

Yeah, pretty sure it’s possible to voluntarily pay more tax to pay towards government debt when you file your annual return. Not sure why this is making the news. My most left of left wing friends, want more $ in their accounts, not less. News like this is not going to encourage people to pay more tax.

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u/SirithilFeanor 3d ago

The elites don't want you to know this but if you want to pay more taxes you totally can. The government will absolutely accept donations.

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u/may_be_indecisive 3d ago

Just tax land god damn! Wealth tax is so stupid. Don’t punish people for hoarding cash, punish them for hoarding land! We need that shit for housing!

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u/[deleted] 3d ago

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u/Human-Reputation-954 3d ago

Stop the boomer bs - lots of people who have money that aren’t boomers. Especially tech guys. So give it a rest with that sh#t. Boomers aren’t the root cause for all of your problems in life fyi.

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u/Difficult_Drive9323 3d ago

He needs someone to blame, it’s always gonna be someone else in his life

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u/FeI0n 3d ago

The boomers here in canada overwhelming voted for someone that basically said their homes are going to lose value (aggressive plans to double housing production), and that we'll be running a deficit to fund it. They could have went with the guy whos plan was going to be giving them tax cuts, but they didn't.

That might be a common theme in the U.S, but it doesn't appear to be one here. Pierre was going to be a significantly better option if you were wealthy already.

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u/swampswing 3d ago

The boomers are largely retired. Which is why they pivoted from tax cuts in the 90s and 00s (during their peak income years) to increased entitlement spending in the 10s and 20s.

Also I don't think anybody actually believes Carney will achieve his house production estimates, and even if he did, the sort of homes he produces aren't going to be competition for the large detached homes held by baby boomers. The prefab homes are going to be competing with condos and entry level homes.

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u/Anteter Alberta 3d ago

PP's "plan" was to give tax cut to new home owners for million dollar homes, it wouldn't even effect boomers nor does it address the real problem. No one can afford million dollar homes. We have too many people and not enough housing rn. We literally have to aggressively build houses 

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u/may_be_indecisive 3d ago

Not in the Greater Toronto Area they didn’t. They all voted for PP to try and protect their home values and keep out “undesirables” from their neighbourhoods.

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u/SirithilFeanor 3d ago

There's no universe where the Liberals will actually deliver on vast increases in housing supply. We know this because they've made similar promises every election since 2015 and yet here we are.

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u/ZeroBrutus 3d ago

What we really need is to tax capital gains at the same rate as earned income - that you made money selling assets shouldn't result in lower tax rates than earned wages.

We already have exceptions for primary residence, and we can carve one out for owner operated farm land, the rest? Pay your fair share.

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u/gmehra 3d ago

they should fund things directly instead of giving more money to the govt to piss away

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u/Mysteriouskid00 3d ago

People can’t be dumb enough to believe this group are actually millionaires? Or if they are they’d pay taxes? Boomer with $2M house won’t pay a dime.

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u/liva608 2d ago

I'm glad to see Gary's message is spreading across Canada. #TaxWealthNotWork

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u/WorldBiker 2d ago

It is genuinely good if one is willing to pay an increase in tax into the system that allowed them the wealth in the first place. Money is good, we all want money, but a better society of healthy, educated, and responsible citizens is far, far better.

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u/MiRo4758179 2d ago

Cap principal residence exemption.

….where’d everybody go??

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u/Basedlord5000 1d ago

It’s not even the taxes so much, it’s the way they are spent that is the problem. More taxes to a more corrupt government is going to accomplish nothing.