Canadians 'drowning in debt': 47% will borrow to cover costs, survey says

[Jason14h]

Originally Posted by Shazam

Punitive estate taxes sound good, but there'd be so much avoidance I'm not sure they'd help.

Yup only works if everyone country does it . It just encourages wealth leaving your country to countries without estate taxes

[Bend it like Bourgeois]

Originally Posted by Slava

Talk to some people who have saved and built those assets through a lifetime. They don't want it going to government!

I know I don't want mine going to the government when I get there.

Daring to contradict Lenin and Trostsky? You use to be a progressive, man. You’ve changed.

[DoubleF]

My understanding of why there's no estate tax in Canada is because we have higher marginal tax rates when someone is alive and deemed disposition at the time of death.

Originally Posted by Jason14h

Yup only works if everyone country does it . It just encourages wealth leaving your country to countries without estate taxes

Ceasing to be a Canadian resident for tax purposes triggers a deemed disposition. But yeah, it's true that wealth is still leaving, but it's not like it's not taxed on the way out.

[Shazam]

Originally Posted by DownInFlames

The current U.S. estate tax has an exemption of $11.4 million. I think most people could live out their golden years on that.

Pish posh, that barely pays for an entourage.

[Harry Lime]

Originally Posted by DownInFlames

The current U.S. estate tax has an exemption of $11.4 million. I think most people could live out their golden years on that.

I was just about to jump in and post this. I have no pity for someone who can't make ends meet on a 11.4M + the after tax amount.

Nothing wrong with an estate tax. The Americans calling it a "death tax" were just playing word games to convince people to come out against the tax, when it would never apply to them in a million years.

[I-Hate-Hulse]

Originally Posted by peter12

The "butts need to be in seats" mentality is probably one of the most pervasively conservative business mentalities still around. Absolutely blows my mind that professional workers whose output is by definition creative are required to be around for 5 days and 40 hours a week.

You might be fine a upstanding member of the workforce who wouldn't abuse that, but there's always a few.... My wife's employer allows for "work from home" policies that have progressively been abused into basically, a free day off where productive output is zero.

The lowest common denominator in society ruins it for everybody.

[flamesfever]

I think the laws of nature dictate that the wealth will always be concentrated in a few people at the top. It has been postulated that if you removed the wealth from everyone and started over, the same people would eventually end up back on top.

I agree a reasonable estate tax may be justified on the most wealthy. However, once it's in place, I see it shifting with time to lower and lower levels of wealth. I think the danger of this applies especially to governments who run up debt irresponsibly, and become more and more socialistic with time.

[blankall]

Instead of an estate tax the government could just fix the tax system so that rich people actually pay taxes. It's ridiculously easy to stash away profit earning investments into corporations, trusts, etc...

That and make property affordable again so entrepreneurs can set up businesses.

The current combination of barriers to entry and ever increasing capital values is very destructive to the fabric of our society.

[Wormius]

Originally Posted by White Out 403

No seriously, we're talking about after you're dead. The fact that you're hung up on how your money will be spent after you are dead is actually kind of off-putting

Technically, yeah. But say your spouse dies, do you think the money should be taxed again before going to you? Some of it is probably yours already and has been taxed and put into an account. I mean with joint bank accounts everything is a jumble of mine and theirs and then it goes into our separate TFSAs and RRSPs.

[Wormius]

I think though you should be given the option of spending the amount on either something stupid within a short time frame, or be taxed a somewhat lesser amount. That way it would encourage some discretionary spending and help small businesses.

[Jason14h]

Originally Posted by Wormius

I think though you should be given the option of spending the amount on either something stupid within a short time frame, or be taxed a somewhat lesser amount. That way it would encourage some discretionary spending and help small businesses.

A lot of wealth is held in assets or companies though. What about land for farmers ? What about a company ? Should it be sold to pay estate taxes ? Destroy a company employing people ?

Once you start putting exemptions people will just put their money there .

[Torture]

Originally Posted by I-Hate-Hulse

You might be fine a upstanding member of the workforce who wouldn't abuse that, but there's always a few.... My wife's employer allows for "work from home" policies that have progressively been abused into basically, a free day off where productive output is zero.

The lowest common denominator in society ruins it for everybody.

Somebody is abusing working from home policies? To me that sounds like a management problem.

[redforever]

Originally Posted by Jason14h

A lot of wealth is held in assets or companies though. What about land for farmers ? What about a company ? Should it be sold to pay estate taxes ? Destroy a company employing people ?

Once you start putting exemptions people will just put their money there .

That actually happened to a company my husband worked for at one time, Kissinger Petroleum, still active in the States, no longer active in Canada.

A tragic accident during a family vacation in the Baja killed the father (President of the company) and his son. They had to sell the Canadian portion of Kissinger Petroleum to pay for estate taxes in the States.

[Locke]

Originally Posted by jayswin

Wealth redistribution will likely be forced onto every western nation in the future. We can do it less painfully in the near future or really painfully later.

I've been saying the same thing about Pension Reform but nobody wants to hear it.

Its not a problem until its a calamity.

Originally Posted by DownInFlames

I'm fine with someone being rewarded for their hard work. I can even accept their children getting to reap some of those rewards. But the ultra-rich often leave enough money for generation after generation to live in luxury.

I'm not sure letting the government take a chunk of it is the best option. I'd prefer to give incentives towards donating to good causes as Bill Gates has. Fund health and education initiatives the prevent disease and poverty to level the playing field. If people insist on being greedy then you can lay an estate tax on them.

Sounds like a certain guy who just got re-elected so I'm pretty sure we wont have to worry about it. He's especially invested in making sure that doesnt happen.

[opendoor]

Originally Posted by DoubleF

My understanding of why there's no estate tax in Canada is because we have higher marginal tax rates when someone is alive and deemed disposition at the time of death.

Yeah, countries tend to either have estate taxes or deemed disposition (and the capital gains taxes that come along with that) at death like Canada does. I think the current system is better than a US style estate tax, as it doesn't incentivize hoarding wealth as much as the US step-up basis does.

[opendoor]

Originally Posted by Jason14h

A lot of wealth is held in assets or companies though. What about land for farmers ? What about a company ? Should it be sold to pay estate taxes ? Destroy a company employing people ?

Once you start putting exemptions people will just put their money there .

That already happens with deemed disposition at death. If someone starts a company and has an unrealized capital gain of millions of dollars, their estate has to pay tax on that when they die (unless it gets transferred to a spouse, then the tax bill is delayed until the death of the spouse).


Or if someone buys a vacation property for $50K and it's worth $500K when they die, that's $225K in income that gets put onto their final tax return due to the capital gains. So unless the heirs want to cough up the ~$100K for the tax bill, then the property likely has to be sold.

[tvp2003]

I like how the "drowning in debt" thread has become the "dead multi-millionaire problems" thread.

[PsYcNeT]

Originally Posted by tvp2003

I like how the "drowning in debt" thread has become the "dead multi-millionaire problems" thread.

When you're clinging to that tiny chance that some day, you too could have 11 million dollars in assets to leave to your family, it becomes a "dead everyone problems" thread.

[Slava]

Originally Posted by opendoor

Yeah, countries tend to either have estate taxes or deemed disposition (and the capital gains taxes that come along with that) at death like Canada does. I think the current system is better than a US style estate tax, as it doesn't incentivize hoarding wealth as much as the US step-up basis does.

Right, these assets are already taxed at death. Not to mention, most of these are taxed throughout a person's life as it is. Adding another tax "just because" is ludicrous.

[Shazam]

Originally Posted by Locke

I've been saying the same thing about Pension Reform but nobody wants to hear it.

You get a pension until 67 and then they kill you. You can live longer if you agree to a deathmatch against a millennial. If the millennial wins he takes your pension.