本文发表在 rolia.net 枫下论坛Tory capital-gains reform: not a capital idea
By ANDREW J. MURPHY
While I may be a chartered accountant who thinks and speaks in numbers, let me try to explain how Canadians may soon experience the biggest tax windfall in our country’s history — courtesy of the Conservative party’s proposed capital gains cut.
Right now, Canada has a 50 per cent capital gains tax. This means on a capital gain of, say, $100,000, you and I would pay $25,000 in tax. The Tory platform is offering Canadians the opportunity to avoid paying any capital gains tax simply by reinvesting the money — in property, for example.
Wow! What a glorious opportunity for you and my clients. A chance to keep all the capital gains built up in investment portfolios and business properties — and to treat ourselves to the retirement villa or lakeside cottage of our dreams. Sweet.
In fairness to all political parties involved, the Conservatives’ proposed tax cut has come under scrutiny, as recently as Jan. 17 in the business section of The Globe and Mail. The Conservatives say their new rule would cost the government $750 million in lost taxes over five years. The Liberals countered with an estimate of $8.5 billion.
Unfortunately, both estimates stand to be wildly off the mark. The reason is simple. The parties based their estimates on capital gains collected in the previous fiscal year — when Canadians were taxed!
The Conservatives’ proposed tax change is unprecedented in the fiscal history of our country. We are on the cusp of letting millions of Canadians avoid paying tax on capital gains simply by reinvesting the money. All the more reason to fully analyse the potential effect of the proposed cut. A good place to start is by looking at the untaxed gains sitting on the net-worth statements of Canadians.
According to a report by the Vanier Institute for the Family, there are 10 million households in Canada with an average net worth of $330,000. If just 25 per cent of this $3.3 trillion in wealth has never been taxed through realization of capital gains, the Conservative tax cut would easily be $120 billion.
That’s a staggering amount of money, which vital government programs like education and health care will surely miss.
According to the Conservative platform, all future capital gains will not be taxed, if reinvested, stopping many more billions from entering the public purse.
The Vanier report has another important insight to share: The top 10 per cent of Canadians hold 45 per cent of the wealth in Canada. Thus, one million families with an average net worth in excess of $1.5 million just got promised a tax break of around $100,000 each.
As an accountant, I know what to advise my clients: SELL the investment portfolio and buy the condo or cottage.
But as a private citizen, I’m scratching my head and wondering how could the respected economist (Paul Darby) who endorsed the Conservative platform have missed all these billions? And how does he figure we’ll be able to maintain vital public service like health care without this money?
The Conservative promise may spell financial manna for a select few Canadians — and financial suicide for the public treasury.更多精彩文章及讨论，请光临枫下论坛 rolia.net
By ANDREW J. MURPHY
While I may be a chartered accountant who thinks and speaks in numbers, let me try to explain how Canadians may soon experience the biggest tax windfall in our country’s history — courtesy of the Conservative party’s proposed capital gains cut.
Right now, Canada has a 50 per cent capital gains tax. This means on a capital gain of, say, $100,000, you and I would pay $25,000 in tax. The Tory platform is offering Canadians the opportunity to avoid paying any capital gains tax simply by reinvesting the money — in property, for example.
Wow! What a glorious opportunity for you and my clients. A chance to keep all the capital gains built up in investment portfolios and business properties — and to treat ourselves to the retirement villa or lakeside cottage of our dreams. Sweet.
In fairness to all political parties involved, the Conservatives’ proposed tax cut has come under scrutiny, as recently as Jan. 17 in the business section of The Globe and Mail. The Conservatives say their new rule would cost the government $750 million in lost taxes over five years. The Liberals countered with an estimate of $8.5 billion.
Unfortunately, both estimates stand to be wildly off the mark. The reason is simple. The parties based their estimates on capital gains collected in the previous fiscal year — when Canadians were taxed!
The Conservatives’ proposed tax change is unprecedented in the fiscal history of our country. We are on the cusp of letting millions of Canadians avoid paying tax on capital gains simply by reinvesting the money. All the more reason to fully analyse the potential effect of the proposed cut. A good place to start is by looking at the untaxed gains sitting on the net-worth statements of Canadians.
According to a report by the Vanier Institute for the Family, there are 10 million households in Canada with an average net worth of $330,000. If just 25 per cent of this $3.3 trillion in wealth has never been taxed through realization of capital gains, the Conservative tax cut would easily be $120 billion.
That’s a staggering amount of money, which vital government programs like education and health care will surely miss.
According to the Conservative platform, all future capital gains will not be taxed, if reinvested, stopping many more billions from entering the public purse.
The Vanier report has another important insight to share: The top 10 per cent of Canadians hold 45 per cent of the wealth in Canada. Thus, one million families with an average net worth in excess of $1.5 million just got promised a tax break of around $100,000 each.
As an accountant, I know what to advise my clients: SELL the investment portfolio and buy the condo or cottage.
But as a private citizen, I’m scratching my head and wondering how could the respected economist (Paul Darby) who endorsed the Conservative platform have missed all these billions? And how does he figure we’ll be able to maintain vital public service like health care without this money?
The Conservative promise may spell financial manna for a select few Canadians — and financial suicide for the public treasury.更多精彩文章及讨论，请光临枫下论坛 rolia.net