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@ZelenoJabko
4 ай бұрын
Canadians really are Cool, United, Creative, Kind, Stable. Now read the first letters.
@ropro9817
4 ай бұрын
In Canada, for how long do you have to live at a property for it to be considered your principal residence?
@Ronglar
4 ай бұрын
As a public CPA, our office was receiving calls all week long from clients asking about the new budget. This video was so well put together, we may start sharing it ourselves! Thanks for spreading hard info for a poorly-understood subject!
@paulkalupnieks
4 ай бұрын
The fact that the inclusion rate wasn't explained in any main stream news source I read on this, i think might have added to the confusion. I'm grateful for a proper, sane explanation of this.
@mat3714
4 ай бұрын
Channels and individuals not explaining correctly probably exploit specific angles for engagement purposes...or political goals.
@nlz1
4 ай бұрын
i wonder why media properties owned by investors living off capital rather than holding a job want to paint capital gains taxes as bad for the average non-millionaire 🤔
@Dgnmuse
4 ай бұрын
Cause they’re all owned by the right 😅
@uncomplicatedi
4 ай бұрын
@@nlz1I am also confused by this. Do you think they are only interested in their own selfish interests?
@samsonsoturian6013
4 ай бұрын
Idiot reporters aren't accountants.
@Kublai_the_dog
4 ай бұрын
I’ll tell my parents that according to Loonie doctor’s calculator, We can save $8 on the cabin tax if they die before the end of the financial year
@subspace666
4 ай бұрын
try not to tell them about m.a.i.d. :P
@foxxygearreviews7754
4 ай бұрын
I think they only have until June 25
@Direblade11
4 ай бұрын
Hilarious
@TooBadToBeAway1
2 ай бұрын
Kafkaesque. Glad someone still has a sense of humour.
@Cosmic_Hobo
4 ай бұрын
Proof that most finance influencers are idiots. They don't even know the difference between a tax rate and an inclusion rate 😂
@MillennialMoron
4 ай бұрын
Somehow I get the feeling that those influencers who don't know the difference might not be clearing 250k in taxable capital gains per year anyway 😉
@nathanlevesque7812
4 ай бұрын
@@MillennialMoron safe bet
@jamesbaxter222
4 ай бұрын
@@MillennialMoron Or they do know the difference, but they spread misinformation anyway in order to get outrage likes and follows.
@johanneskurz7122
4 ай бұрын
Which leads me to the question: why do you even have inclusion rates? Wouldn't it be easier to simply have a different tax rate?
@MatthewSmith-wv5fi
4 ай бұрын
That's utter nonsense. You didn't understand it.
@sheldrake1111
4 ай бұрын
Thank you for such a great explanation. I wish all medias and channels were as clear and detailed.
@JohnnyCoulthard
4 ай бұрын
So disappointed every time I have to explain the basics of our taxes here to people. The light bulbs I see come on after explaining tax brackets alone is blinding!
@Fenriren
4 ай бұрын
Unfortunately, clear and detailed news doesn't increase viewership. Sensationalism has killed journalism
@gc.96
4 ай бұрын
Most mainstream media have no incentive to be clear given the fact that they are owned by billionaires who have their own political agenda.
@davianoinglesias5030
4 ай бұрын
😅Being clear and detailed won't generate views, people want sensationalism and drama.
@maxweinbach3996
4 ай бұрын
Which media outlet was not clear on this?
@norbetjagamara5536
4 ай бұрын
This is just ridiculous. Now instead of paying the current 0% on my numerous capital losses, I'm going to have to pay double. Can't an honest small time investor catch a break?
@ThePlainBagel
4 ай бұрын
Thoughts and prayers 🙏
@braintrust12
4 ай бұрын
@@ThePlainBagel "thoughts and prayers." redditors: *absolutely devastated.*
@Danny-vd1nj
4 ай бұрын
That's not how it works...
@Direblade11
4 ай бұрын
@@Danny-vd1njNo no no, he IS paying double!
@yuordreams
4 ай бұрын
What's double zero? @@Danny-vd1nj
@christopherthompson9578
4 ай бұрын
Please keep doing what you're doing, your channel has been of great value to me, being a young professional in Canada who doesn't work in the financial sector but still wants a sane explaination to have a passing understanding of how these changes impact me. Much respect, thank you. - PS The Peak is the Canadian equivalent of morning brew and have also found that valuable.
@SinisterLynch
Ай бұрын
Brother move to the usa, marry a american woman you find in detriot or your closest us city and become a us citizen. I make 50% more in the usa as a 23 year old than i did as a canadian at the same job while gettibg taxed 40% less. Literally taking home 75k usd a year and in Canada id get like 40k usd after taxes. I wejt from paying 38% taxes and free healthcare to like 22% taxes and i get my full coverage health care for 36$ a week. So lol yeah free healthcare aint worth 2-3k a month lmao
@al-hakimbi-amrallah5404
4 ай бұрын
You truly are a breath of fresh air in the youtube landscape
@hollyhollems4234
4 ай бұрын
Thank you for offering a level-headed explanation of this! It's been all over the news but until this video I had no idea the actual situation.
@la.zanmal.
4 ай бұрын
Also worth considering: everyone knows this change is coming, so if you sell now to realize capital gains you'll be selling into a market that likely won't offer you the same price it would otherwise. Simple supply and demand.
@michelchamoun9967
4 ай бұрын
That applies to canadian assets. But if you have international stocks, they wont be affected by the canadian tax changes
@NLuck-eh5cd
4 ай бұрын
Somewhat cynically, I'm wondering if that was part of the plan of this tax change. If a bunch of investors decide to dump their stock of housing onto the market, that could push prices lower in the short term, just in time for the election. Still a good policy, and I don't think we should be giving capital gains a free pass, but the timing is a bit interesting.
@meneldal
4 ай бұрын
@@NLuck-eh5cd Bursting the housing bubble is long overdue.
@Zraknul
4 ай бұрын
@@NLuck-eh5cd I'm confused by your suspicion of timing. The change is approximately 16 months before an election needs to be called by. June 2024 vs October 2025.
@Xi-op7gg
4 ай бұрын
An additional thing to realize is that a couple of decades ago, Ontario doctors were not allowed to incorporate. That ability to incorporate was then offered to doctors so that in return, they would accept lower payments from OHIP. So in essence, the government said ok we will pay doctors less but they get to incorporate and save some money that way, but now we are taking that away. Doctors have no pension, sick leave, paid vacation…etc. It feels like a betrayal.
@jiecut
4 ай бұрын
The value of this tax deferral over 20 years is quite impressive. Doctors will continue saving in corporations after this change due to the power of tax deferral. Especially if they have a timeline over 8 years. Doctors can also lobby the Ontario government for more pay.
@Xi-op7gg
4 ай бұрын
Yes, I agree the tax doesn’t completely negate the advantages of incorporating, and doctors can still save and get some benefit from tax deferral and compounding. However, it still feels like a betrayal of the good faith of the original deal, like a bait and switch. Back in the day, doctors could have said no to the offer of the ability to incorporate, and just asked for higher fees up front. Also, the increased rate affects any capital gains you want to realize in the future. If a doctor has been compounding for 10-15 years, then this isn’t just more tax going forward, you are being retroactively taxed for the last 10-15 years of financial planning.
@jiecut
4 ай бұрын
@@Xi-op7gg They have a couple months to still take advantage of the old inclusion rate.
@Xi-op7gg
4 ай бұрын
True. However, realizing a huge amount of capital gains all at once has other tax implications. For example, that eats into the small business deduction limit. The more capital gains you realize, the less of your corporate income is taxed at the more favourable rate, so you lose out either way.
@RuffinItAB
4 ай бұрын
It's on capital gains over 250K a year... If you are cashing out over 250K a year just on capital gains I don't feel sorry for you having to pay an additional few thousand dollars in taxes.
@placeholderdoe
4 ай бұрын
Insert enraged political comment here!(I do not know what is going on I do not live in canada)
@monitoradiation
4 ай бұрын
Thank you for even knowing that we exist
@xxXXuser69420XXxx
4 ай бұрын
truly sad for canada and all my strawberry picking friends over there (not a joke)
@lilsabin
4 ай бұрын
@@xxXXuser69420XXxx How many Canadian earn (profit) $250,000 + per year ? looooooool
Any business person who thinks they can just move to another country and start a business there as easily as doing so in the country they are familiar with are dreaming. Different countries have so many differences that emigrants are unaware of and/or don’t fully understand you are increasing your real risks that can easily outweigh any imagined benefits of this one thing.
@sor3999
4 ай бұрын
The rich have an attitude of not giving an inch with regards to tax rates, so whether it's 0.0001% increase or 15%, they will cry the sky is falling, make threats and run hit pieces and propaganda so you might as well go for the hail Mary. If they wanted to set up business in another country they would've done it already if the market is lucrative. California minimum wage is like $18-$20, corporations love whining about minimum wage increases, and they still set up shop here anyway because it's too big a market to ignore.
@dpachecomartins
4 ай бұрын
Thank you A LOT for this video… no other place I saw this explanation and I did think it was 66% tax 🤦🏽♂️
@adam872
4 ай бұрын
It seems the Canadian CGT framework is very similar to ours in Australia and there are economists here agitating to make a similar change to the discount level. I can see how a small reporting error or piece of misinformation could lead people to believe the tax rate is going up dramatically. These explainer videos are important for that reason alone.
@danguee1
4 ай бұрын
This is staggering that there's so much confusion and misunderstanding about such a simple concept/change.
@theviceinvirtue
4 ай бұрын
This!!! This is what I've been saying since they released the budget. You are obviously way more eloquent in your explanation than I ever could be. So thank you for laying this down so plainly (lol). Too many click bait headlines about how everyone is rushing to sell off their assets, when we actually need more content like this.
@poxx3662
4 ай бұрын
This was a great video, as usual. I greatly appreciate you contextualizing the information (e.g. the productivity problem mentioned, graphs/tables of Canada's tax vs other countries) and giving a quick TLDR (seemingly quick enough for people already in the know to ignore and short enough to continue on with the topic you wanted to address) economic concepts like trusts. Thanks!
@frasersgrove4838
4 ай бұрын
Thank you TPB, great explanation on a complex issue...
@tbird81
4 ай бұрын
Pirate bay?
@snipesxiii9188
4 ай бұрын
@@tbird81 trailer park boys
@ShaneWenzel
3 ай бұрын
I am pleased to see that the Conservatives are opposed to the increase in the capital gains tax. People in Canada are fed up with the federal government's habit of increasing taxes and wasting money.
@EamonCoyle
4 ай бұрын
Happy 6th Birthday to you sir and a happy Friday to your family. Thank you for keeping it real and breaking down the bull for us mortals !!
@electrosyzygy
4 ай бұрын
Newly subbed and sharing. Thank you for being a voice of reason, saying things as they are and being apolitical--people lost their minds with this, the Libs communicated poorly, the media explained even less and certain opportunists had a field day.
@matthew8505
4 ай бұрын
14:30 that graph is super cool and concise. I appreciate that very clear explanation
@wouldntyouliketoknow9891
4 ай бұрын
I dont mind paying reasonable taxes, and capital gains is a good approach to taxation since its progressive resulting in the wealthier people paying a larger share. That said, I am greatly concerned by the governments just continuing to raise taxes and invent new taxes instead of moderating spending. You cant tax your way to prosperity.
@TheErvdoggie
4 ай бұрын
Richard, You're the best! Always enjoy your videos and learning soo much domestically as well as internationally on the many subjects you cover. Keep up the good work--love it! -Ervin
@akuji1993
4 ай бұрын
Really great explanation. This is going to be linked a lot from Twitter ^^
@jedro86
4 ай бұрын
Very informative. Thanks for trying to remain objective! Still feels primarily a tax on the rich, but I didn’t expect all the nuance.
@jasonandrews7355
4 ай бұрын
Man's spitting facts. Thank you for such a a concise explanation, that's very helpful. Although I have a lot of issues with my country, I can't say this is a big one for me. We have bigger fish to fry imo
@curtis1397
4 ай бұрын
Your gonna have a different opinion when all the wealth flees the country and you cant find work.
@freedomlife3623
4 ай бұрын
@@curtis1397didn’t see that happen between 50’s -70’s when the inclusion rate is even higher. Stop being so dramatic.
@curtis1397
4 ай бұрын
@@freedomlife3623 You mean when you could save for a down payment in 1 year and pay off a house in 10? Now it takes 10 years to save for a down payment and over 30 to pay it off. Your also talking about a pre-globalized economy, competition is now global. Businesses aren't just competing against joe blow down the street (who also had to pay that inclusion rate). They are competing against every single business in the world that is even remotely similar, many of which are in countries that are much cheaper to operate in. Use some critical thinking and stop eating the spoon fed lies by politicians. When someone challenges your ideas, ask why instead of slinging mud and calling people dramatic. You might learn something.
@hhiippiittyy
4 ай бұрын
@@freedomlife3623 Even if it does happen, the correlation could be insignificant. So many factors at play.
@nicholasdaily2589
4 ай бұрын
@@curtis1397you’re a small business owner that will barely be affected by this unless you make anywhere in the neibourbood of the numbers presented. It’s crazy to me how many wealthy or would be wealthy people are flowing into videos like this to dissuade people from accepting this change. This change is good, it was good when it was higher and is still good now. The rich have harvested the Canadian economic landscape for far, far too long.
@graham1034
4 ай бұрын
Great explanation! I've been seeing so much FUD on this lately and I'll be posting this video in response now. The change isn't nothing but it also is only a small impact on a small number of mostly wealthy people.
@brennanhamel94
4 ай бұрын
Thank you for unbiased and easy to understand explanation 👍🏻
@Caffeinegoesinface
4 ай бұрын
I have been sticking random comments trying to explain that is only a 16% increase on the inclusion. But i don't think i articulated it well. This video did a great job and will be my go to to send to people to help understand the change.
@justinwilcox6853
4 ай бұрын
Finance education is so important
@telotawa
4 ай бұрын
so what you're saying is, capital still gets taxed 33% lower than labor? ....yeah corporations are still given a better hand than the average worker here
@uberboiz
4 ай бұрын
way to miss a point....
@High1QWealth
4 ай бұрын
Should be like that! You take no risk as a worker without equity!
@stimepyc3523
4 ай бұрын
What wasn't said here, is that most of these people who would have to pay these taxes are already talking to tax experts, and accountants. If you think you're going to have more of a tax liability, absolutely talk to a professional to see how or if it will affect you at all. Chances are, You're fine but, always have a professional, verify your fears or lack thereof.
@Monir1993
4 ай бұрын
This prime minister is lazy and spineless. Collecting taxes in theory would be find if citizens got quality services in return. Instead, this wasteful prime minister has done nothing but incur fumble after fumble and make the lives of Canadians worse off. I'd also like to mention that I'm so tired of the lack of creativity of this government. All they know to do is: a) introduce taxes or b) introduce tax free schemes or bank account. So unimaginative and useless. We are at a point where people would much rather buy single family homes than invest into a business in this country, and the smooth brained government has done nothing to inspire meaningful change. Utterly useless and absolutely hopeless. What a waste of the past 9 years. ggs to the middle class in Canada.
@seattlegrrlie
4 ай бұрын
American here... while our system is different, it has similarities. What is the same is the complete lack of understanding for most people plus the media always reporting on it wrong. People freak out about capital gains taxes and last year my total gains taxes were about $250.
@carmp3fan
4 ай бұрын
Staying invested vs divesting before June 25th also assumes govt doesn’t change the tax code again during that 10 years. Does anybody actually believe that?
@alexander2000AD
4 ай бұрын
Another reasons Capital gains is a lower rate is due to inflation the real profit in capital gains is less than the nominal amount that is taxed. I believe in Australia they used to tax only the capital gains minus the inflation over the period of ownership. But this was simplified to a 50% discount, as in Canada, to be simpler. Australian Labor lost the 2019 election with part of their platform to decrease the discount to 1/3rd as Canada is introducing. I can see this change being fair when you have low inflation as we had from 1990 to 2020, but with the much higher inflation rate recently the 50% rate of discount is probably fairer.
@Ex_877
3 ай бұрын
*Laughs in 45% CGT on 100% of your gains in Australia*
@JunSian1001
4 ай бұрын
For every crave-out and loophole, there will be tax lawyers who help you to avoid the higher tax.
@geekinasuit8333
4 ай бұрын
It's not that simple. There's only so much that can be done, and going down various loopholes is never cost free, often times it can be counter-productive and may have risks that can go the wrong way. In addition, the legal fees cost money, which means there's less take home to re-invest.
@samsonsoturian6013
2 ай бұрын
Only so much they can do and it's only worth their fee if you owe a large amount
@Flincher14
4 ай бұрын
I'm embarrassed how small this change is and how dramatic of a controversy has been created out of an ant hill.
@RogerAckroid
4 ай бұрын
How are capital gains by companies treated in the US? Aren't they taxed at 100% of their value(instead of 2/3 now in Canada)?
@stevenglowacki8576
4 ай бұрын
There is no capital gains preferential rate for C-corporations in the US. The only "good" thing about capital gains for C-corporations is that they can offset capital losses, which are otherwise not deductible, unlike with individuals which are allowed $3,000 in capital losses per year with indefinite carryover, while C-corporations have only a 3 year carryback and 5 year carryforward available. There are vastly fewer directly taxed corporations per capita in the US than Canada though, as pass-through entities (some of which may be S-corporations which are technically corporations but aren't taxed directly like C-Corporations) are far more popular. It would be insanity in the US to suggest that a doctor run their business as a C-Corporation and accumulate money in the business in the way that is discussed here. Instead they will have an S-Corporation (or maybe a partnership) and the business's profit will flow through to their personal return, and they can freely add and remove capital from the business without tax consequence. Please also note there is a large difference between a "company" and a "corporation" when it comes to tax law. A "company" is a generic term that US tax law never uses, while "corporation" is a specific term that is used.
@RogerAckroid
4 ай бұрын
@@stevenglowacki8576 thank you. It was really instructive
@MakeThatChange
4 ай бұрын
Thank you for making this video. This is the most rational breakdown I've seen of the capital gains tax change and it's potential impact. 🚀
@samsonsoturian6013
4 ай бұрын
Self-employed guy here: There's a host of reasons to incorporate even if it's a sole proprietorship. My reason my employer forces us all to make companies so he can deny that we are employees, but the non-compete agreements we signed are completely unenforceable.
@corail53
4 ай бұрын
Sounds like the entertainment industry...
@jshowao
4 ай бұрын
Not uncommon for some businesses to do this, some even only employ workers outside the country so they can cut down on paperwork and taxes. It's a shady as hell practice.
@samsonsoturian6013
4 ай бұрын
@user-oj7uc8tw9r Not always. When outsourcing stuff online you're competing against people in third world countries with internet so often the best bang for the buck is someone who speaks English as a second language.
@jshowao
4 ай бұрын
@@samsonsoturian6013 Nearly all foreign countries have people who are trained to speak English as a second language and rather well in technical professions. It is not as competitive an edge as you think. The US is way behind in this regard.
@bf19881988
4 ай бұрын
I dont believe a sole prop is the same as incorporating
@heshanpalliyaguruge6333
4 ай бұрын
Just completed my tax course for my undergrad and love how you covered all the different tax impacts! Amazing content as always Mr. Richard
@ReiniBlue
4 ай бұрын
Hi dumb question - What's the point of having an inclusion rate? Why cant you tax 10% of 100% of gains versus 20% of 50% gains?
@ThePlainBagel
4 ай бұрын
The inclusion rate allows capital gains to be taxed more favourably than regular income without creating a separate set of tax rates. The government still wants to incentivize capital gains income since it promotes investing.
@ReiniBlue
4 ай бұрын
@@ThePlainBagelahhhhh that makes sense thanks a lot
@craiganderson5556
4 ай бұрын
It's good for poor people with a huge portfolio. Maybe also retirees.
@matthewdavis7319
4 ай бұрын
Informative and useful. Thank you for providing valuable input.
@mat3714
4 ай бұрын
Oh no !! X is mad about it, I'm sure it's all valid, balanced and not at all filled with conspiracy theories.
@7PropagandaPanda7
4 ай бұрын
you can just tell us directly you are poor
@mat3714
4 ай бұрын
@@7PropagandaPanda7 pretty sure that rich people don't make stupid reply like this
@Peter-q1p7t
4 ай бұрын
You can directly tell us you're a conservative @@7PropagandaPanda7
@erikzarts
4 ай бұрын
@@7PropagandaPanda7 Bot names aren't getting too creative these days.
@nicholasdaily2589
4 ай бұрын
It’s because wealthy people have done a very good job of trying to steer people to lean right, which hardcore favours the rich and corporate business. Elon himself probably absolutely hates this idea because it just means he pays more in taxes, which he should. (Not him specifically but people like him)
@beachboardfan9544
4 ай бұрын
This is irrelevant and very much just the gov's version of virtue signaling, as wealthy ppl are just going to skirt this tax increase with deductions and loop holes anyway.
@ddude27
4 ай бұрын
Great explanation. I already knew some of youtube videos made a big out of it were pushing out misinformation. I wish people would list the sources directly in their videos but a lot of them just bring up a draw pad and add theoretical numbers...
@jeremybrummel3254
4 ай бұрын
I hate the Classist idea that the wealthy should pay a higher tax percentage than everyone else, be it marginal tax system or outright wealth tax.
@mazimadu
4 ай бұрын
I also hate this idea, because of the prevailing idea that "Canada is a wealthy country". And considering how prices have increased, it means you HAVE TO BE WEALTHY jùst to live in this country
@Belgianperspective
4 ай бұрын
Sometimes… it is better to LEAVE Canada once one gets the passport to avoid high living costs and crappy services (healthcare among others) and high taxes. It is sometimes a good idea to use the passport and experiences (make sure it is not from those survival jobs they lure to many immigrants) and use that elsewhere… to me, 3 years after uniting here, I knew I wouldn’t retire here nor buy a house here (not worth it)!!!
@danwelterweight4137
4 ай бұрын
That is exactly what I am doing this summer.
@dmitripogosian5084
4 ай бұрын
So where do you suggest to go for an excellent health care ?
@Blinky888
4 ай бұрын
My guess is that anyone that could be affected by this significantly will probably be getting a big raise to pay for it.
@pinkturtle8375
4 ай бұрын
Was hoping you would make a video on this. Thanks for the clear explanation.
@jacoboblanco1555
4 ай бұрын
Basically if you see any outrage online, it’s probably misplaced and misinformed and you should ignore it.
@samsonsoturian6013
4 ай бұрын
If there's a meme about it, it's usually bullshit
@RyanPatrickOwens
4 ай бұрын
The real concern is deemed disposition at the death of the second spouse; I met recently with a registered nurse who was leveraged to the hilt with mortgages on rental properties. The new capital gains change will make it difficult for her to sell the properties off while still making a decent profit to fund her retirement; but it would be even worse if she were to leave the properties to her children. The difference thanks to the new inclusion rate is going to be almost a million dollars in liability. She is not one of Canada’s wealthiest people.
@jimjam6598
4 ай бұрын
My instant thought was that it'll disincentivise people from selling assets (most likely property), not increasing supply in the long term, and therefore driving up prices. People will just use assets as collateral for loans and they'll never be sold, whilst increasing in value.
@ziglaus
4 ай бұрын
Time to tax unrealised gains as well
@jimjam6598
4 ай бұрын
@@ziglausya then the market crashes
@tarfeef101
4 ай бұрын
@@jimjam6598it needs to, good (I say this as someone who will lose if that happens)
@grimaffiliations3671
4 ай бұрын
you address supply by building more
@meltedsnowman9637
4 ай бұрын
@@ziglaus Well that’s just a catastrophically bad idea. Much worse and much more damaging idea than these current tax changes.
@Grizabeebles
4 ай бұрын
I'm starting to think that having only one tax rate for personal income, corporate tax and capital gains would actually lead to lower net taxes for all categories. Even just the cost savings from not having to set up and maintain shell corporations and complex tax-avoidance structures would add up to something significant.
@dmitripogosian5084
4 ай бұрын
Taxes are way of the government to promote a particular type of behavior. Especially here in Canada, where federal government has practically no other instruments, since most of everyday internal life is provincial jurisdiction, variations in taxes just often for this purpose. Here it is all about real estate
@0xCAFEF00D
4 ай бұрын
10:20 Surely it's not that expensive to do this in Canada. A similar situation here in Sweden cost me an equivalent of 2700USD.
@barettmac
4 ай бұрын
We know how expensive it is, the Government of Canada is estimating that increasing the capital gains inclusion rate will bring in about 4 billion per year in new revenue, that's 4 billion per year not going back to shareholders of these corporations.
@freedomlife3623
4 ай бұрын
@@barettmacwell, someone have to pay for all those programs, why should capital gain being taxed much lower than regular income? We have a corporation, will be happy to contribute a bit more to build a better community.
@AntonPNym
4 ай бұрын
@@barettmac That said, after a good 30 years of near poverty I landed into some investment money (the old fashioned way, I inherited it) five years ago and was shocked to discover how easy it was to build capital one you had some to invest. It's been awfully close to a free ride for me, and I'm as sceptical of free rides as Adam Smith was; so I welcome the increase in inclusion rate if it's going towards fixing the market failure we're seeing in housing.
@danielquintieri
Ай бұрын
It was literally just a way to force people to selk and make their budget numbers look better with 0 regard for actual people
@cabbagedestroyer1693
4 ай бұрын
Imagine when you die, you pay tax. But if you leave any property behind for your family, you get taxed as well. Cant even escape tax in death.
@chillinchum
4 ай бұрын
Are you just learning this now?! That's something that really irks me about folms complaining online sometimes, they are complaining about something they learned for the first time that's been around for decades, or in some cases centuries, but treating it as though it's a new thing. I despise the concept of generational wealth, so I have little sympathy about estate tax. However, if it so bugs you, remember to go do something political about it. ...or do as a lot of other folks might say, leave. I can think of a few reasons why myself. But taxes aren't necessarily one of them. That said all the reasons I can come up with for leaving were all problems we've been dealing with for over 20 years. Recently heard someone say you can track the problems all the way back to Pierre Trudeau...and I'm going to guess it can be taken further.
@cabbagedestroyer1693
4 ай бұрын
@@chillinchum Centuries? Do you know how the tax system has changed over the past 50 years? It's a simple question. What percentage of the population had to pay death tax in the 1980s?
@anthonybousquet3590
4 ай бұрын
@@cabbagedestroyer1693 Yes, centuries. France has had inheritance taxes since the French Revolution and Britain since the middle of the 19th century. The concept of taxing inheritances isn’t exactly recent.
@cabbagedestroyer1693
4 ай бұрын
@anthonybousquet3590 That is extremely misleading. Yes there was a concept that only applied to 0.1% of the population. Inheritance tax in Europe applied to massive estate owners, and did not apply to the common people. Inheritance tax in the US didn't even exist until 1980s, in which only about 1% of the population was affected. In the British Empire, the succession duty act, again, only affected a small proportion of people and only taxed people between 1 to 10% as opposed to 30 to 50% that we have today. In another word, unless you don't think there's a difference between 1% of the population being taxed at a maximum 10% on Inheritance vs. 100% of the population being taxed at a minimum 30%, then I don't know what to tell you.
@joeisawesome540
4 ай бұрын
@@cabbagedestroyer1693 because back then you dirty peasents wouldn't have anything to pass it on... just like most people in Canada.. you don't have that much to pass on..
@metrotkdstudio
4 ай бұрын
Canada doesn't have a revenue (tax) issue, it has and has always had, a liberal government spending problem.
@justinodonohue8977
4 ай бұрын
Where do our taxes go? How much of a benefit do Canadians get for having such high tax rates? The Canadian health and education system have major problems. The military is underfunded. Where and how are these taxes used? What’s the taxation to benefit ratio?
@dani2cute4u
3 ай бұрын
This tax system only encourages mediocrity.
@snave4o4
4 ай бұрын
This is the first video on this issue that breaks it down in a clear and concise way
@SniperReady
4 ай бұрын
These tax schemes rarely affect anyone who ever comments on them. to be the sort of person withdrawing $250,000 in capital gains you would have to be like one of Canada’s 0.1% wealthiest. The change in taxes would be something like $20,000 on an annual income over $500,000 (with your personal income being $250,000 or more, and your capital gains being $250,000 or more). That would be about 4.5% of your income. And that’s assuming the tax applies to that $250,000, and not the amount after (I’m not clear what the case is.) At an average return of about 10%, you would need to be holding $2,500,000 or more in investments to see capital gains reach that level. This is such a negligible amount for people that wealthy, and all of you here are not that wealthy. Some of you may make several hundred thousand per year, and even you will not see any of this effect.
@questioner1596
4 ай бұрын
I think the biggest segment of "normal" people affected would be retirees selling their house or cottage when downsizing (assuming it's not the "principal"). Many $250,000 houses 15 years ago are now worth $1,000,000+.
@jimlamb7642
4 ай бұрын
Because governments never expand the pool of who it effects after they get a new tax law passed.
@curtis1397
4 ай бұрын
Bad take, im a middle class independent business owner and it affects me. I am no where near even the top 1% and will likely have atleast 250K gains next year. Either your under 30 or work at mcdonalds.
@SniperReady
4 ай бұрын
@@questioner1596 If they have over $250,000 in equity on a non-principal property, are we worried about how that extra 8% at most in taxes is going to affect them? This is the whole point. People who have incredible wealth can afford the extra tax. Did I complain about paying $60,000 in taxes after years of never making more than $25,000, because my income went drastically up? No, grow a pair and contribute to your community.
@SniperReady
4 ай бұрын
@@jimlamb7642 because wealthy people cannot possibly afford a small percentage extra in taxes.
@CNaldinho1
4 ай бұрын
I feel like not enough attention is being paid to the fact that this is a backdoor inheritance tax. With the exception of investment properties very few people have capital gains greater than $250,000 with the exception of at the time of death where all your assets will have been deemed to have been sold. This is not just for the wealthy as most Boomers including blue collar Boomers will end up triggering this extra tax. I suspect a large portion of the people paying this tax will be estates as any living person can just tax plan around it.
@cmdrfunk
4 ай бұрын
Essentially boomers get to have one nonstop party all the way to death and then when the newer generations finally get a break by inheriting what their boomer parents leave behind, the government just steals it instead.
@chrisarnold5561
4 ай бұрын
I'm also concerned about this, you are correct that it does not take much to earn $250k+ in capital gains upon death and I would like to see someone give their thoughts on how that will (or will not if I am missing something) affect the estate of the average Canadian
@AgaresOaks
4 ай бұрын
110% this. My parents are by no means rich but I had to double check the approximate value of their assets vs their market price. They're under, but by an amount that suggests we know a good number of people that probably are not.
@geekinasuit8333
4 ай бұрын
The inheritance tax is only one item to consider, there's also the little mentioned "alternative minimum tax" (AMT) that came into effect this year, it will negatively affect some retirees, and is a double taxation bite at the same time. The government is intentionally lying to Canadians when it says the cap gains tax increase targets only "wealthy people" - WTF is "wealthy" these days? $250K is not a lot of money any longer, neither is $1M when housing can easily exceed $1M in most cities across Canada. There are 3 forms of wealth to consider, one is your net worth, another is your recurring level of income, and the 3rd is the combination of your NW and level of income, ideally both are high, but many have only one or the other, not both. A doctor may have a high recurring income, but relative small NW, while a homeowner who bought a home in the 1990's may now have high NW locked into the home, but has a relative low recurring level of income. Both example are not really "wealthy", they are regular folks trying to get by in life, just like everyone else is. Most high NW individuals in Canada have most of their NW locked into a home, with relative low recurring income, none of them will feel as if they are wealthy. If your NW is locked in a home, then selling it will be required to re-invest into recurring sources of income for retirement (for example, to purchase stock that pays a dividend), the cap gains tax will take a bite out of the re-investment and will lower the recurring income over the rest of your life - and that hurts much more than the government is claiming. The $1M lifetime exemption increase comes with caveats, and the puny increase is a joke, $1M is not high enough any longer.
@Harby000
4 ай бұрын
There's still the primary residence exemption, so I can't think of a huge number of people that will have more than a $250k gain outside of that that aren't dealing with rental properties that remain unsold. Those rental properties if held as a business though would fall under the life time exclusions as well would they not? Anyway, I think the feds 0.13% is misleading, I think the "everyone is doomed" is way over the top.
@TooBadToBeAway1
2 ай бұрын
We not only have a productivity problem, but we also have steeply declining rates of investment. FT last month: Canada is the poster child of what not to do coming out of the pandemic. We have a 3% population increase and a 0.5% rate of growth. Obviously, we're in a recession and have been for several quarters. . Any capital gains increase is insane in this type of economy; you want to encourage investment, not discourage it. I feel sorry for young people, who seem to have no hope of owning a home, getting a good paying job that matches their qualifications, finding a doctor, etc. I think many of the best educated will vote with their feet to move south.
@FaustsKanaal
4 ай бұрын
The netherlands is proposing to tax unrealized capital gains. Its nuts.
@SchwarzeKatter
4 ай бұрын
They already do it in Germany. Unfortunately.
@kalibbailey6219
4 ай бұрын
I mean a tax on unrealized capital gains makes sense over a certain period of time. If you are up 100,000%+ as a VC investor that money stays untaxed even if it gives dividends. So if you put a million in apple the day the first Iphone dropped you have a billion dollars in untaxed gains indefinitely. The only taxes youd pay is on the 5.6 million you get annually in dividends.
@tommyle3243
4 ай бұрын
@@kalibbailey6219no it wouldn’t make sense because say you never sell. Essentially what you did was buy a business that payed you the dividend you deserve. It’s not different than paying for a brick house and its value goes up. That’s why there’s a distinction between realize and unrealized gains
@failedfishermanBC
4 ай бұрын
@@kalibbailey6219 So you only pay taxes on the money you receive. Makes sense to me. Taxing unrealized gains is insanity. The government doesn't need more of our money.
@tarfeef101
4 ай бұрын
It does make some sense. A popular way the wealthy avoid taxes is borrowing against assets with unrealized gains, allowing them to spend without having income
@forbiddenera
4 ай бұрын
Of course people see this and think its just 66% tax and those same people think it will affect them when it wont and blame Trudeau for raising their taxes 😂😂😂😂
@MasterMind468
4 ай бұрын
An average family can’t even buy a detached home anymore, yet the rich who have more than one home, or a huge investment account are outraged at this tax? @ThePlainBagel, can you comment on this psychology. I have saved up over 100k before age 30 and i have to live in appartments my whole life, and the wealthy with cottages are complaining?
@flakgun153
4 ай бұрын
My life sucks so people who have it better than me should also have their lives suck? This isn't going to make anything cheaper for you at all. Just going to make you feel better by sticking it to people you are jealous of
@MasterMind468
4 ай бұрын
@@flakgun153 nope, you just need to pay your fair share. Nice try
@flakgun153
4 ай бұрын
@MasterMind468 I'm not even Canadian. All I did was explain *your psycology*. And the idea of a fair share of people income to take away from them by force is complete bullshit anyway. Taxes should not be higher than 20% for *anyone* for any reason. That's an opinion. Just like any opinion on what a fair rate is.
@MasterMind468
4 ай бұрын
@@flakgun153 in canada, there is a housing crisis. The government needs revenue. Wages are low and the richest canadians are making large capital gains, and pay less tax on that than say, a nurse saving lives earning a salary. Nobody needs to generate infinite free money
@flakgun153
4 ай бұрын
@MasterMind468 Yes and do you think taxes magically make houses cheaper. If anything this makes it harder for the people who put down money to actually build new construction to justify doing do. And it's not about how much money people NEED. If you want a society that looks like that then go to North Korea. Our society works off of what people want and incentives to do. And the Canadian government would need far more money than it actually could ever get off of taxes to build significant amount of housing itself. And again. Am I wrong in the way I described your psycology? If you actually cared about resolving the housing crisis you would be focused on making it easier to build by any means necessary. Instead you're focused on punishing people who have more than you for the crime of having what you want. Realistically Even if Canada mobilized every single property developer and construction worker it would take decades to resolve. And that's absolutely not going to happen if you make the people who actually know how to navigate the insane amount of beaucracy it takes to build anything and encourage them to build in foreign countries instead.
@joshuacoll.6100
4 ай бұрын
Thank you so much for these videos bro. We really need your dry Canadian wit to cut through all the rhetoric, God bless.
@TheAnimalv12
4 ай бұрын
I guess I'll hold on to my bagel butts NFTs for awhile longer.
@EdwardMaxedon
4 ай бұрын
So let me get this straight. The 99% of Canadians who will likely never be effected by this increase on capital gains for the
@fei287
4 ай бұрын
Thank you Mr Bagel but I haven't paid taxes since 2008. I learned that if I report my income as $0, the government pays me instead.
@tysonkrehnke2835
4 ай бұрын
That's weird. For inheritance In the US there is a step up in basis. So when you get an rental property purchased at $100,000 and the FMV at date of death is $200,000, you now have $200,000 of basis to help reduce any future gains going forward. Pretty nice deal.
@saltyBANDIT
4 ай бұрын
Good idea honestly but without exception, for example, for clinic owners i fear this will hurt doctors who have incorporated to fix income from owned clinics and Canada isn’t in a place where the medical system can take any hits. With that said however, it’s at least a semi positive step in a decent direction.
@epictetus3406
4 ай бұрын
Step in the right direction? Making it less favorable to set up a business in canada while giving more money to the state to waste is a step in the right direction? When did so many people become communists? Is it the younger generations?
@ultimetacooler
4 ай бұрын
@@epictetus3406a lot of people on the internet never leave their house so they don’t understand how the world works
@robertomartinez8966
4 ай бұрын
So it's not that bad because it's not us who are going to pay it...right? 1. Well, let's see what will happen when Corporations move outside Canada to avoid this. 2. People usually believe that Corporations are BIG companies, but they don't realize that most of well paid professionals are incorporated so 100% of them will be affected, we're talking about Doctors, Pharmacists, Software Engineers, etc...but since we are not them, screw them for making more than us. 3. Finally, what's the point of taxing more at the end? Giving more money to people who have created the problems they now say they're going to solve? Conveniently one year before elections? I feel sad every time I watch us Canadians to root a demagogue Government with "good intentions", as if we hate ourselves and the system that has given us a privileged and wealthy standard of life and until we realize this we'll continue walking this slippery slope, whatever be at the end, we will have what we deserve.
@FaustsKanaal
4 ай бұрын
Taxation like this is why people set up Holdings in tax havens. Sounds like tax the rich, in effect its more like tax the self employed and small business owners. It may sound like someone who is a millionaire is wealthy, but if thats a paid off house and investment account, then thats their pension. On a million earning 5% you only get 50,000 a year before taxes. Thats not "taxing the rich". And furthermore, these taxes which raise dividend tax and so on, also affect salaried workers in that their pension funds also have to pay more taxes now. Meanwhile the actual rich who have in the hundreds of millions, they set up legal constructs avoiding any tax at all. And increasingly, as a small business owner, I feel like we are idiots for not doing the same.
@amando96
4 ай бұрын
No point in not doing it. These people hate you.
@ziglaus
4 ай бұрын
@@amando96the rich, you mean?
@ziglaus
4 ай бұрын
This is exactly the tool to close those loopholes though. We should support any law that makes tax evasion more difficult, as anyone who isn't paying their taxes is effectively stealing from you
@Hyperpandas
4 ай бұрын
Not sure I follow your argument here. If a small business owner has invested a million dollars and realizes a capital gain of 5% each year, then 1/3 of that gain is still tax free and the other 2/3 is subject to your normal corporate tax. The only change is to the inclusion rate, which was 1/2. Not sure that most small businesses even have capital gains unless or until they are sold or have to dispose of some property. In the case of the former, they still get preferential treatment than any salaried worker receives by accumulating wealth through their labor. Finally, I don't believe dividend rates are affected by this at all. So small business owners can still pay themselves a small salary and dividends each year, once again resulting in lower taxes than salaried workers with equivalent gross incomes.
@FaustsKanaal
4 ай бұрын
@@ziglaus None of this makes evasion more difficult. It just taxes the people who cant evade more.
@jeremynewell9903
4 ай бұрын
I work in construction and use a corporation for my small business. All told I'm still paying 38%
@rhythmandacoustics
4 ай бұрын
I am still too poor to be taxed at that rate.
@extremepsyche3135
4 ай бұрын
Tax for thee - not for me
@everydayfun9531
4 ай бұрын
Bruh I'm unemployed and broke.
@JoelHerzog
4 ай бұрын
Is there any legal reason that an elder person with a cottage couldn't sell their cottage to their children for something like $1 while they're still alive rather than leave it in the will? And then would the CRA only count the sale value, or would the still tax based on the appraised value?
@luislptigres
4 ай бұрын
Great way to disincentivize 250K capital gain.
@kevinbaldwin7805
2 ай бұрын
I will ask the important question. Why does the Canadian government need more money?
@rileynicholson2322
4 ай бұрын
From the political perspective, the important takeaway is that only the wealthiest people are likely to be directly effected. This isn't a tax on middle income earners because they limited capital gains and access to tax sheltered investments like principal residences, TFSAs, RRSPs, etc. Yes, as with all progressive taxes, there are some concerns about discouraging productivity or investment in high income earners, but that really becomes a matter of cost benefit analysis based on where revenues are being spent.
@BorealMushroomms
4 ай бұрын
Most doctors and dentists will be effected.
@bogeybichon7000
4 ай бұрын
ANYONE with a cottage, investment property, self-employed person with a holding company (NOT just doctors, dentists etc but also blue collar professions such as plumber, electricians etc), anyone who has an ownership interest in a Canadian controlled small business that is not publicly traded. It has been estimated that it could directly effect 20% of Canadians at some point in their life.
@BigRedNutcase911
4 ай бұрын
@@bogeybichon7000 What capital gains are those small businesses even earning though? As TPB mentioned, they already get tax benefits for selling the business so it's moot there. Plumbers, electricians, etc aren't exactly day trading with their business revenues, so what small businesses are affected?
@samsonsoturian6013
4 ай бұрын
From a macroeconomic perspective it doesn't matter where you siphon off money from the economy all that matters is how much you siphon. And it does get really technical as there's no one tax that truly "targets the rich" due to technicalities.
@schoeyy5468
4 ай бұрын
@@bogeybichon7000oh no, those people with investment properties that increased in value by 250k or more are going to be taxed a bit more!! How will they cope
@AmanSS890
3 ай бұрын
Canada keep taxing the doctors that are business owners, and the people that have grocery stores ? And the people that have e restaurants. And people that have a cottage. 🤦♀️. So know if I want to sell I will be taxed to death. No person in there every loving mind would want to do business in Canada . After this . Find someone were else to open a pharmacy, or doctor office , as an investor I can’t catch a break in Canada. This is way no doctors want to start a practice in Canada .
@Cpt-Maximuz
4 ай бұрын
As an American I find it funny seeing Canadians say they are going to leave after this change and I'm here like, where are you gonna go, the US? Here you get high taxes in mayor states, high real estate market, low paying jobs (for the most part) and no free health care.
@NeostormXLMAX
4 ай бұрын
Perhaps to singapore or malaysia just like nomad capitalist
@elnericoo
4 ай бұрын
I mean Texas doesn’t look too bad 🤔
@JollyOldCanuck
4 ай бұрын
@@elnericoo Texas and Florida have sky high property taxes in every city and county that's worth living in, it's how they make up for the lack of a state level income tax. Nevada is the only state that doesn't have a state level income tax and low property taxes thanks to gambling revenues from Vegas, but Nevada's a desert and Vegas is a dump outside the strip.
@Caffeinegoesinface
4 ай бұрын
Yup was thinking the same thing. Except the housing market point, have you seen the costs of housing in Canada? Look at Toronto and Vancouver.
@epictetus3406
4 ай бұрын
They don't go to California or the New York friend. And healthcare in canada is not free. There is a huge cost and massive administrative waste.
@jeremynewell9903
4 ай бұрын
Haha, I in Canada I pay a set rate on non-eligible dividends so the government makes me feel good. Then I pay a "gross-up" amount of 15% on top of that. Everything is a money-grab up here.
@jacobl2222
4 ай бұрын
Thanks for the clear analysis, and explaining the ACTUAL pros and cons. As usual, it seems the people out there whinging the hardest about this don't seem to understand how it actually works. Either that or they're intentionally distorting it to push an agenda.
@chihuadog
4 ай бұрын
You don’t know what you’re talking about. This is essentially a 33% increase in tax(67% inclusion divided by 50% inclusion). For a small business to realize 100k of gains they now have to pay an extra 10k in taxes. That’s huge.
@Oblech1
4 ай бұрын
@@chihuadogPlease learn mathematics
@jws20000
3 ай бұрын
Your discussion on low corporate tax rates only applies to active business income eligible for the SBD. Doctors would likely have investment income which would be taxed at a much higher rate.
@courier3567
4 ай бұрын
It's crazy we pay taxes on this in the first place. Money already taxed when it was earned and then the government wants a share of our investment also?
@axelnils
4 ай бұрын
What do you mean when it was earned? You are only paying taxes on gains, ie new profits.
@courier3567
4 ай бұрын
@@axelnils income tax
@arkaleon1551
4 ай бұрын
Don't say shit like that some people love being taxed 😅
@dmitripogosian5084
4 ай бұрын
@@courier3567only the principal have been taxed as income, here they tax additional money you gained from investment, not the original principal
@maxbork4087
3 ай бұрын
The capital gains tax is among the most economically damaging forms of taxation, precisely because it reduces the incentive to innovate and invest in Canada. Increasing the capital gains taxes from 50% to 67% will discourage investment in Canada. However to encourage investment in Canada, would Pierre Poilievre reduce this tax to 33% or even eliminate it?
@richarddaigle8777
4 ай бұрын
I do civil engeneering work on construction sites, i pay 54% tax. They even talk about it during the annual meetings with the union. I dont make 250k+ a year, i make around 110k. I dont get it.
@BrotherAlpha
4 ай бұрын
7:00.... MOST PEOPLE DON'T OWN A COTTAGE OR A CABIN! I know some non-rich people will have one, but it is just funny to hear someone talk about every day people with a cottage.
@Vnifit
2 ай бұрын
It's actually a lot more common than you'd think. My family bought a cottage out in Prince Edward County back in the 60's on a blank plot of land for around $8,000 and built a small cabin. That was done on my grandfathers single-income salary. My parents are both teachers so they aren't poor, but solidly middle class. If my father wanted to transfer the property to us one day (perhaps in 20 years) there is no way we could ever afford the capital gains on the place, it'd be astronomical. Prices have gone nuts and the quiet rural area we once were located in is now much busier, and the old cottages nearby have been buldozed for huge expensive places for the rich. Without an exemption for cottages (perhaps those over a certain age/been in the same family) it will only just transfer more real assets from the middle class to the upper classes. You are right that nowadays if you are purchasing a cottage you are probably in the upper class, because properties are insanely expensive anywhere and everywhere. But back in the day, this was not the case, and it was filled with middle class earners, just like all of our neighbours used to be. Now cottage country is becoming exclusively a rich persons playground.
@rightwingsafetysquad9872
4 ай бұрын
I feel really bad for all the people paying higher taxes on their vacation homes. I hope they have enough money left over to dry their tears.
@Bob_Lob_Law
4 ай бұрын
Or when you sell your buisness/startup, that you built from the ground up.
@nottoogoo
4 ай бұрын
So poor people that get a home given to them gets screwed
@kennordsfan1494
4 ай бұрын
Yep we did with my parent’s house. We sold it because nobody was willing to pay the taxes. On a 339,000 house we paid 51,000 and change to CRA! This is an inheritance tax plain and simple. The tax the rich lie is just that. Were do most of the taxation monies come from? The middle and lower class. Stop believing the liberals lies of helping Canadians. We have seen how they help themselves lol but screw us lol
@nonenone5387
4 ай бұрын
So basically its mostly a nothing burger but the fear that governments could start taxing people with money is the bigger issue.
@AA-il9pc
4 ай бұрын
“People with money”. You mean people with a below average retirement? Children inheriting a family home that has potentially been in the family for generations?
@geekinasuit8333
4 ай бұрын
Who has a home worth less than $250K? How many Canadian's, who earn an average wage, also now have a home that's become worth well over $1M? The governments' perception of "wealthy" is incredibly warped.
@jiecut
4 ай бұрын
@@AA-il9pc This has no impact on principal residences.
@AA-il9pc
4 ай бұрын
@@jiecut Not every family home is a principal residence
@dmitripogosian5084
4 ай бұрын
@@AA-il9pcthen it is not a "family home"
@dmitripogosian5084
4 ай бұрын
With corporations i suspect main target are individual people owning real estate through corporations. Very popular scheme to avoid/reduce taxes when selling reselling real estate
@wnose
4 ай бұрын
In 1980, the corporate tax rate was 36%. Today? 15%, one of the lowest in the OECD. Corporations only contribute 25% to overall taxes collected. Over the same period of time, the feds cut building in social housing, and reduced proportionate expenditure in defense and health. So here we are.
@samsonsoturian6013
4 ай бұрын
So what? Companies just pass those expenses onto their customers.
@Jacob_S13
4 ай бұрын
Why dont u pay your own health and housing expenses then 😅 Bums being bums
@df5826
4 ай бұрын
Investments aren't keeping up because wages haven't kept up for over 30 years. This affordability crisis was caused by wages not being kept up to cost of living for 30 years. We make penny compared to our parents but hey we'll be fine right? Why aren't we taking about this?
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