The bubble finally deflating. not bursting.............

[I_H8_Crawford]

Originally Posted by puckedoff

I get why we need CPP, but I wish I could opt out. I am fully capable of saving/investing that money on my own, and when my love of cheeseburgers inevitably clogs my arteries that money should go to my spouse and kids. To me it seems like it is a tax on sensible people and a boon for the irresponsible.

Heh, why do you think Trudeau and Liberals got elected?

Same thing - people who live paycheck to paycheck see the "1%ers" who have a nice nest-egg, etc and don't like it.

Why do you think one of the Libs platforms was to scale back the TFSA? I mean, who can afford $10K/year in contributions to it? Obviously only those who make $500K+/year

I had a lot of friends say that it was impossible for them to save $10K/year to place into TFSAs, and they say that inside their $700K homes with leased BMW and Audi in the driveway....

[jammies]

Originally Posted by Enoch Root

Your final comment is amusing, considering the fact that you have made no useful arguments one way or the other, you have simply attacked my post from an angle of semantics.

No, the usefulness of my argument was to prevent more people from jumping on the "gov't stealing MY money!" and "Free Man on the Land!" emotional thrust of your original post. This is the paragraph I had issue with:

Originally Posted by Enoch Root

And with respect to drawing a line somewhere, where do you draw it? What is the number that says 'you have more than enough, so we are going to double tax you'? (hint: the personal answer to that, for almost everyone, is anything more than I have).

That, especially the bolded, is an emotional appeal based on an inaccurate characterization of the situation. Just like "random tax grab", a phrase which I note you didn't address as being not merely an exaggeration but a falsehood.

If you don't want to talk semantics, then don't buttress your arguments with outrageously slanted rhetoric.

[Locke]

Actually....thats a brilliant idea jammies!

'Random Tax Grab.'

We should just do that!

Kind of a like a Lottery but in reverse. Have a normal tax system and then one day year the Government can just take all of your stuff for a random sampling of people.

"Oh, your family has been building this over the past century? This must suck for you!!"

Random Tax Grab.

[Slava]

Originally Posted by GGG

The question of whether CPP is a good deal should be what is the equivalent cost of a lifetime gurenteed defined benefit plan cost on the private market. Are there any similar products out there right now and if so what do they cost?

I do think one issue with the CPP now though is that the liabilities from underfunding for years are being born by the CPP and rather than by the government. So one portion of the CPP is an investment the other portion is tax recovery. If you got rid of the tax recovery portion you could make a much better assessment on the value the CPP brings and be much more transparent on the boomer tax.

The individual these days can invest in products that are fully guaranteed and provide lifetime income. There are a few options and obviously the fully guaranteed option is the GIC, but rates are pretty brutal at this stage. Other guaranteed products through insurers exist, but the fees are definitely higher than what you're seeing from the CPP, and it's not close. for these products you're basically nearing 3% a year for charges if not above that in some cases. You might wonder to yourself, "why would anyone pay that?!" and you're partly right. But the other side of the coin is that longevity risk is a legitimate issue for people to consider.

I have basically avoided this discussion here because it's not new. People think they can invest on their own and outperform CPP. As per my comments above, the truth is that people retiring are very concerned about outliving their money. CPP takes away the risk of that taking place. The system isn't perfect and the major concern people have is the issue of the survivors benefit being a mere $2500. I definitely agree with that criticism.

One factor is that people need to recognize that your RRSP won't last you forever. Frankly as you age, the minimum you MUST take increases. So as you age the minimum withdrawal increases to levels that aren't sustainable; your RRSP will run out of money and while that doesn't mean that you can't save that money elsewhere when you take it out, it does pose a concern for the retiree to consider.

[Locke]

Originally Posted by Slava

The individual these days can invest in products that are fully guaranteed and provide lifetime income. There are a few options and obviously the fully guaranteed option is the GIC, but rates are pretty brutal at this stage. Other guaranteed products through insurers exist, but the fees are definitely higher than what you're seeing from the CPP, and it's not close. for these products you're basically nearing 3% a year for charges if not above that in some cases. You might wonder to yourself, "why would anyone pay that?!" and you're partly right. But the other side of the coin is that longevity risk is a legitimate issue for people to consider.

I have basically avoided this discussion here because it's not new. People think they can invest on their own and outperform CPP. As per my comments above, the truth is that people retiring are very concerned about outliving their money. CPP takes away the risk of that taking place. The system isn't perfect and the major concern people have is the issue of the survivors benefit being a mere $2500. I definitely agree with that criticism.

One factor is that people need to recognize that your RRSP won't last you forever. Frankly as you age, the minimum you MUST take increases. So as you age the minimum withdrawal increases to levels that aren't sustainable; your RRSP will run out of money and while that doesn't mean that you can't save that money elsewhere when you take it out, it does pose a concern for the retiree to consider.

Thats just the Death Benefit. When you die the Government sends your Executor (the one taking care of your Estate presumably not the one that 'took care' of you) a cheque for $2500. Which is (stupidly) taxable.

But you are still entitled, within certain restrictions, to the 'Survivor Benefit' of a deceased spouse.

[Slava]

Originally Posted by Locke

Thats just the Death Benefit. When you die the Government sends your Executor (the one taking care of your Estate presumably not the one that 'took care' of you) a cheque for $2500. Which is (stupidly) taxable.

But you are still entitled, within certain restrictions, to the 'Survivor Benefit' of a deceased spouse.

Right, sorry I typed that our in between "real" work. (also taxable!)

[Locke]

Originally Posted by Slava

Right, sorry I typed that our in between "real" work. (also taxable!)

Haha! Now Jammies really has me thinking.

I think thats what our tax system is lacking, a sense of anarchy.

We should live in a state of perpetual fear, all income should be earned 'tax free' until at some random time the lottery balls come up and you have to pay an arbitrary sum with no method of appeal.

The only morality in a cruel world is chance! Unbiased. Unprejudiced. Fair.

[Slava]

Originally Posted by Locke

Haha! Now Jammies really has me thinking.

I think thats what our tax system is lacking, a sense of anarchy.

We should live in a state of perpetual fear, all income should be earned 'tax free' until at some random time the lottery balls come up and you have to pay an arbitrary sum with no method of appeal.

The only morality in a cruel world is chance! Unbiased. Unprejudiced. Fair.

"We know you were expecting to be paid this week, but you were randomly selected to pay 100% this month. Before you complain think of the benefits you get through healthcare, education, roads and other important services. Your country thanks you for your valuable contribution and we trust that you'll see the benefit of this enlightened policy."

[stampsx2]

Originally Posted by Locke

Haha! Now Jammies really has me thinking.

I think thats what our tax system is lacking, a sense of anarchy.

We should live in a state of perpetual fear, all income should be earned 'tax free' until at some random time the lottery balls come up and you have to pay an arbitrary sum with no method of appeal.

The only morality in a cruel world is chance! Unbiased. Unprejudiced. Fair.

Don't they already have this in China. Isn't that why people from china invest in Canadian real estate (mostly vancouver), because it's more secure and their property won't get randomly seized.

[Enoch Root]

Originally Posted by jammies

No, the usefulness of my argument was to prevent more people from jumping on the "gov't stealing MY money!" and "Free Man on the Land!" emotional thrust of your original post. This is the paragraph I had issue with:

If anyone is guilty of emotional thrusts here, it is you.

My post wasn't an emotional thrust, it was a reply to another poster (Edslunch?) who made the comment that at some dollar level, there should be a tax. It was his comment that was an emotional appeal ("I think people with more money than me should be taxed"), and I was merely replying by mirroring the built-in emotional appeal of it. The fact that you misread that is on you.

Simply drawing a line in the sand and saying "people with this much money should pay another tax", is not much of an argument, and I was simply illustrating that fact by applying his emotional slant on it.

That, especially the bolded, is an emotional appeal based on an inaccurate characterization of the situation. Just like "random tax grab", a phrase which I note you didn't address as being not merely an exaggeration but a falsehood.

If you don't want to talk semantics, then don't buttress your arguments with outrageously slanted rhetoric.

'Random tax grab' is a legitimate complaint to the suggested process, once you understand what is being proposed.

Again, a person's estate is already taxed on their death. Do you understand this part?

I'll say it again. A person dies. (Excluding a spousal rollover) their estate pays all tax liabilities in full.

THEN, the remainder - net of the tax bill - is transferred to their heirs.

Suggesting that this should now be a taxable event - for no valid reason, since the estate has JUST paid all of it's tax liabilities - is nothing more than a random tax grab. It is essentially identical to the silly illustrations that Locke and Slava were just throwing around.

"Sure, I know you don't owe any tax, but we're going to tax you anyway, because hey! this is a new way to tax you" is essentially the argument those in favour of an estate tax have so far proposed.

All taxes owing on the wealth accumulated by the now-deceased have been paid.

Slapping another tax on the transfer to the heirs is double taxation and is effectively similar to any other random tax grab directed at those that don't otherwise owe any legitimate or current taxes.

Feel free to disagree but the emotional appeal here is being created by the 'tax the rich' argument. No legitimate reasoning has been proposed.

As to the bold, you claim I have made an "inaccurate characterization of the situation". Please, enlighten as to where I have been inaccurate. I have explained how the process works. Show me my inaccuracies.

[CliffFletcher]

Originally Posted by I_H8_Crawford

Same thing - people who live paycheck to paycheck see the "1%ers" who have a nice nest-egg, etc and don't like it.

Is it really envious random citizens who called for ramping up CPP? I thought it was government bureaucrats who were alarmed at how little Canadians are saving, and aware that impoverished seniors are going to cost the government even more through welfare, health care, etc. Because that's the thing - in a civilized country you can't just shrug and say people who didn't save enough can eat cat food and live in basements. Because the costs of their poverty (even if it is through poor planning) will come back on the public coffer one way or another. So better to force them to save.

[Locke]

Originally Posted by Enoch Root

If anyone is guilty of emotional thrusts here, it is you.

My post wasn't an emotional thrust, it was a reply to another poster (Edslunch?) who made the comment that at some dollar level, there should be a tax. It was his comment that was an emotional appeal ("I think people with more money than me should be taxed"), and I was merely replying by mirroring the built-in emotional appeal of it. The fact that you misread that is on you.

Simply drawing a line in the sand and saying "people with this much money should pay another tax", is not much of an argument, and I was simply illustrating that fact by applying his emotional slant on it.


'Random tax grab' is a legitimate complaint to the suggested process, once you understand what is being proposed.

Again, a person's estate is already taxed on their death. Do you understand this part?

I'll say it again. A person dies. (Excluding a spousal rollover) their estate pays all tax liabilities in full.

THEN, the remainder - net of the tax bill - is transferred to their heirs.

Suggesting that this should now be a taxable event - for no valid reason, since the estate has JUST paid all of it's tax liabilities - is nothing more than a random tax grab. It is essentially identical to the silly illustrations that Locke and Slava were just throwing around.

"Sure, I know you don't owe any tax, but we're going to tax you anyway, because hey! this is a new way to tax you" is essentially the argument those in favour of an estate tax have so far proposed.

All taxes owing on the wealth accumulated by the now-deceased have been paid.

Slapping another tax on the transfer to the heirs is double taxation and is effectively similar to any other random tax grab directed at those that don't otherwise owe any legitimate or current taxes.

Feel free to disagree but the emotional appeal here is being created by the 'tax the rich' argument. No legitimate reasoning has been proposed.

As to the bold, you claim I have made an "inaccurate characterization of the situation". Please, enlighten as to where I have been inaccurate. I have explained how the process works. Show me my inaccuracies.

- Raising Property taxes
- Raising Personal Taxes
- Raising Corporate Taxes
- Thinking about a Sales Tax

What do you think those are?

But yeah, you're right, inventing a new tax is totally ridiculous. Madness even.

Whoops! Missed one!

- Inventing the Carbon Tax

They almost got away with that one!

[Enoch Root]

Originally Posted by Locke

- Raising Property taxes
- Raising Personal Taxes
- Raising Corporate Taxes
- Thinking about a Sales Tax

What do you think those are?

But yeah, you're right, inventing a new tax is totally ridiculous. Madness even.

Whoops! Missed one!

- Inventing the Carbon Tax

They almost got away with that one!

One might even call them random tax grabs.

I have absolutely no idea what you are trying to argue in this thread.

First, all your examples, except the carbon tax, are simply increases to current taxes.

Second, when did I say that anything was madness? I said it was double taxation, and it is a bad idea because it disincentivizes savings. And what we need to do is encourage savings.

Third, how does anything you're saying here actually support the tax? Is your argument that governments like to raise taxes and create new taxes, so have at 'er with this one too?

Because if that is the argument - and I haven't seen any other arguments in its favour yet - then I would say yes, that is pretty much the definition of a random tax grab.

[Locke]

Originally Posted by Enoch Root

One might even call them random tax grabs.

I have absolutely no idea what you are trying to argue in this thread.

First, all your examples, except the carbon tax, are simply increases to current taxes.

Second, when did I say that anything was madness? I said it was double taxation, and it is a bad idea because it disincentivizes savings. And what we need to do is encourage savings.

Third, how does anything you're saying here actually support the tax? Is your argument that governments like to raise taxes and create new taxes, so have at 'er with this one too?

Because if that is the argument - and I haven't seen any other arguments in its favour yet - then I would say yes, that is pretty much the definition of a random tax grab.

No. They cant. Because they arent. They are well established and scheduled Tax Grabs.

Nobody has argued that it isnt double taxation. It is. I've even said so myself. I've even argued that its unjust and unfair. But it taxes Capital rather than Earnings and as such puts dollars back into the general pool.

It disincentivizes savings. You keep saying that. I dont think that term means what you think it means. And by that I mean I know that term doesnt mean what you think it means.

Yeah, sure, people are just going to stop saving for their retirement because 'screw the Government! They're going to take care of me when I retire!!' Sure. Yeah. They wont bother adapting to changing circumstances. Just...to hell with it! Saving is for chumps and the weak! Just like breakfast and Labour Day!

I dont personally support the tax at all. But its a tax of Capital rather than Income and its a tax on the wealthy. Hey man, wheres my Political Capital and Social License? Do I get a 'Get Out of Jail Free' card too? Hand 'em over. This is what people want, as evidenced by the Governments they've elected.

Again. I dont think that term means what you think it means. And again, I really mean that I know that term doesnt mean what you think it means.

It isnt random if you know its coming.

a haphazard course
at random
: without definite aim, direction, rule, or method subjects chosen at random

https://www.merriam-webster.com/dictionary/random

If its a Tax. In the Tax Act. Its not sneaking up on anyone. Ergo it is in no way 'random.'

Is it fair? Oh hell no. But the fact of the matter remains that ugly decisions are looming.

I personally believe that an Estate tax is a terrible idea. Its got lots of negatives and drawbacks, but, while wealth is continuing to be accumulated among a small group and Government spending isnt stopped, curtailed or even prevented from its current predicament of skyrocketing, then the cash to keep the lights on, the doors open and the wheels turning has to come from somewhere and as I've indicated before the Government cant just keep robbing people on the street.

[Enoch Root]

umm, random can also mean randomly designed (as opposed to part of an ongoing plan or strategy) - but thanks for the rant

didn't say anything about sneaking up on anyone

[Locke]

Originally Posted by Enoch Root

umm, random can also mean randomly designed (as opposed to part of an ongoing plan or strategy) - but thanks for the rant

You're welcome.

[troutman]

Originally Posted by Enoch Root

Again, a person's estate is already taxed on their death. Do you understand this part?

I'll say it again. A person dies. (Excluding a spousal rollover) their estate pays all tax liabilities in full.

In Alberta?

Principal residence is not taxed. There is no inheritance tax in Alberta (maximum probate fee is $500). RRSPs are taxed unless rolled over to a spouse (tax was deferred). There could be capital gains on a vacation or rental property. Unpaid income tax etc must be paid by the estate.

[jammies]

Originally Posted by Enoch Root

umm, random can also mean randomly designed (as opposed to part of an ongoing plan or strategy) - but thanks for the rant

"Randomly designed". Classic.

[Locke]

Originally Posted by jammies

"Randomly designed". Classic.

All Tax Law comes out of a Yahtzee Cup.

The more you know.

[Enoch Root]

As for disincentivizing, yes it does mean what I think it means, and yes, this type of tax would do that.

We need more savings. We need more people to save.

Increasing the taxes on savings reduces their value. As consumers, we have choices, and changing the tax profile of something changes its value. Reducing its value can result in people making other choices.

That is disincentivizing.

And again, we are talking about those at the margin here, who need to save more. The ultra-wealthy can avoid the tax anyway. This disincentivizes the marginal saver.

And no, I am not saying that means that people won't save. I am saying if you reduce the value of it, people will save less than they would have.

If you want to discuss this, do so without the misguided condescension please.