Quote:
Originally Posted by GGG
If you lowered it to no exemption you’d be raising taxes on all groups. Yes you’d be raising it on a small amount of income but you couldn’t say that the tax increase only affects .13% of earners. You’d also be taxing the elderly which is generally bad before an election.
In the P90 and below salary category the value is very minimal with only 2.4% of income being earned through capital gains. But if you parsed the numbers by age I would bet you’d find lots of elderly couples pulling 20% of their income out of gains on 40k per year each incomes.
Now is this good fiscal policy? Probably not as taxing all people with gains more probably makes a lot of sense especially old people with gains. But that’s not politicaly palatable.
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I agree with what you're saying. This is almost entirely a political move so that they can say very few people are affected. It's just really dumb to keep making tax policies based on political motivations. They've continued to do this (and Harper did too to a lesser degree) and it's going to continue to make taxes more complicated and budgets worse.
If they really wanted to make sure seniors or your average person weren't affect, the yearly exemption could be in the $20,000 to $50,000 range and it probably catches very few people.
I also think estates in the next few years could be caught by this, but otherwise they will adapt and people will trigger gains along the way to avoid big gains on death. The exception being people with more than one property who will absolutely be caught by this.