Quote:
Originally Posted by amorak
If I were a CA, I wouldn't know where to begin... 
1) The purpose of the Capital Gains 50% inclusion rate is to encourage people to invest
2) No, there is not a double taxation on dividends - That's the purpose of the Dividend Tax Credit and the gross up. The result is that the total tax paid on that $1 of dividend, when you factor in the corp tax paid on the earnings and the personal tax = what you would have paid on normal personal income, give or take a bit.
There is no real double taxation in Capital gains and the whole purpose of the DTC is to eliminate or mitigate any double taxation. I am a proponent of Capital gains tax because of the 50% deduction (due to the inclusion rate) that we enjoy - But I'd love to see that rate drop! 25% inclusion =  .
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This.
The problem with Internet forums is sometimes incorrect information is presented as fact. While maybe a bit high, there is nothing wrong with taxing cap gains. I, too, would like to see it halved to 25%.
The dividend tax credit ensures there is no double taxation of Canadian dividends.
Good post. Right on the mark.