Quote:
Originally Posted by flamesfever
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It depends on what that $10 million represents. If the person is in an employment situation, he has probably paid $10 million in taxes to end up with it. If it's in a company, the inheritance tax will be on 50% of the deemed sale value at death. And hopefully the company can survive for the benefit of the shareholders and employees.
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Hopefully the company can survive after an inheritance tax is applied?
At least the hesitation in your comment implies you have an idea the comment is ridiculous and needs significant revision before being having a chance at being considered seriously. How on earth is the concept of the government taxing companies to the point of bankruptcy a positive thing for the Canadian economy?
I mean, I seriously don't get where some of these comments are coming from unless I literally apply the logic that certain posters have severe misunderstandings on how the Canadian tax system works.
When you die, your assets are taxed via deemed disposition of your entire estate (conceptually, you buy back your own assets at FMV and pay the taxes owing on the gains). There's a deferral for transfers to a spouse, but ultimately, that estate will be taxed.
What some posters are literally suggesting is a serious punitive aspect into the tax system that incurs a significant amount of double and even triple taxation equivalents to high net worth individuals. Out of whatever concept, some of you want to extra two pounds of flesh rather than the fair one pound of flesh. Idiotic concepts like these are the perfect way to watch even more Canadian talent leave the country (which is already happening). If you go beyond that to disallow Canadian talent to leave, then you're not even going to get to the point of developing to bringing talent to Canada.
People hoarding wealth in Canada is awesome and should be encouraged due to trickle down effects. IMO, the issue is not wealth in Canada, but the ability of someone to take wealth out of Canada. If we want to go the punitive route, then put a penalties of high net worth asset transfers/deemed dispositions out of Canada (ie: Over 10MM) and/or significant idle assets in Canada and not on estates full of assets that will remain in Canada. We want to have powerful Canadian entities that can compete worldwide in different markets and bring money from other markets back to Canadian soil. We do not want to implement rules that creates a ton of small fries that would get bowled over by other countries on a consistent basis.
But this tax the rich concept is so beyond the initial topic it's not even funny. High net worth individuals in Canada are not causing others in Canada to get to dangerous levels of debt. Even if you knock these rich Canadians down a peg, the average citizen will look beyond our borders for things to splurge on and will continue that trend of consumption. I think I've long heard others offer sentiments where income tax should be significantly scaled back and tax on consumptive goods other than basic necessities should be increased dramatically. This would be a good idea, but this doesn't solve the debt issue. People who are bad with money and debt loads will continue this trend even if you change other rules. There has to be another way to properly tackle the subject.
Shouldn't we get back on topic about debt loads and tolerances rather than go down the rabbit hole in creating more problems with attempts that wouldn't even remotely close come to helping to solve the issue of Canadians incurring debt to cover costs?