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

[undercoverbrother]

Originally Posted by Shazam

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.

The pension is backwards.

I think you should get a "pension" from the state till you hit, say 30-35. Then you work and you work till you drop dead. No retirement.

Get to enjoy your pension when you are you and fun.

[troutman]

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.

It is sometimes hard for us to comprehend the difference in scale between million and billion and trillion.
A million seconds is 11 days, a billion seconds is 31 years and a trillion seconds is 31709 years.

[CliffFletcher]

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

We're already seeing a hardening class system develop in this country. Do we really want to wind up like the States, with their crime, distrust, failing institutions, and vicious political culture?

We're going to need to consider policies like inheritance taxes if we want to avoid that fate. If we want strong public education and public health care to endure in a country with an ageing population, the money has to come from somewhere. Maybe inheritance taxes are a fair trade-off if they mean the affluent don't need to live in gated communities, send their kids to private schools, and pay for private health care.

[Weitz]

Originally Posted by CliffFletcher

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

We're already seeing a hardening class system develop in this country. Do we really want to wind up like the States, with their crime, distrust, failing institutions, and vicious political culture?

We're going to need to consider policies like inheritance taxes if we want to avoid that fate. If we want strong public education and public health care to endure in a country with an ageing population, the money has to come from somewhere. Maybe inheritance taxes are a fair trade-off if they mean the affluent don't need to live in gated communities, send their kids to private schools, and pay for private health care.

Oh they certainly will have a good life.. But it might not be as good as someone down the street and that's what I believe causes a lot of problems.

[troutman]

It may be a fallacy to think the very wealthy are that way because they worked harder and smarter than everyone else. Maybe that is often the case, but it could happen too that they were lucky, unethical, criminal or sociopathic. Does that even matter?

Instead of an estate tax, how about a cap on how much can be transferred to family, and then let the testator decide where to gift the rest of the estate within accepted categories (rather than to the general revenues of the government)?

[PsYcNeT]

Originally Posted by CliffFletcher

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

We're already seeing a hardening class system develop in this country. Do we really want to wind up like the States, with their crime, distrust, failing institutions, and vicious political culture?

We're going to need to consider policies like inheritance taxes if we want to avoid that fate. If we want strong public education and public health care to endure in a country with an ageing population, the money has to come from somewhere. Maybe inheritance taxes are a fair trade-off if they mean the affluent don't need to live in gated communities, send their kids to private schools, and pay for private health care.

I guess I'm a broken clock today, because this post 100%.

[Ozy_Flame]

Originally Posted by troutman

It may be a fallacy to think the very wealthy are that way because they worked harder and smarter than everyone else. Maybe that is often the case, but it could happen too that they were lucky, unethical, criminal or sociopathic. Does that even matter?

I've never understood the narrow thought pattern of "rich = respect" mantra. There are a million ways to get rich in this world, and building a business from the ground up is just one of them - and that assumes it was done legally, ethically and a net positive to the community. Even then, wealthy people can be outright narcissistic, sociopathic jerks as much as they can be good, decent people. You see it all the time on social media, too. Posts and content that glorify wealthy people, why they're wealthy, and how you can be wealthy too. It's tragic.

Steve Jobs lamented his wealth before he passed away. "Non-stop pursuing of wealth will only turn a person into a twisted being, just like me. God gave us the senses to let us feel the love in everyone’s heart, not the illusions brought about by wealth."

Tangential conversation topic, I know, but recognizing what's important is critical to one's well-being, I think.

[Fire in the disco]

Originally Posted by troutman

It is sometimes hard for us to comprehend the difference in scale between million and billion and trillion.
A million seconds is 11 days, a billion seconds is 31 years and a trillion seconds is 31709 years.

I like to use this example to show why it’s ridiculous that anyone can hoard so much wealth that they have a Billion dollars (or billions)

Let’s say you made cash after tax every day for 100 years. During those 100 years you made 20,000 dollars a day 365 days a year.
20k x 365 days x 100 years = $730 million.

The point is even if you made that ridiculous sum after tax every single day for a hundred years, which we can probably all agree is more money than anyone person would ever need in their lifetime you still would not be a billionaire... maybe this should be in the random thought thread but trout your point made me want to bring it up.

[peter12]

Originally Posted by CliffFletcher

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

We're already seeing a hardening class system develop in this country. Do we really want to wind up like the States, with their crime, distrust, failing institutions, and vicious political culture?

We're going to need to consider policies like inheritance taxes if we want to avoid that fate. If we want strong public education and public health care to endure in a country with an ageing population, the money has to come from somewhere. Maybe inheritance taxes are a fair trade-off if they mean the affluent don't need to live in gated communities, send their kids to private schools, and pay for private health care.

Also build more houses/condos/townhomes. It is the largest asset of the upper-middle Boomer class, and its supply has been artificially constrained in order to drive up its price.

[TheIronMaiden]

Originally Posted by CliffFletcher

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

We're already seeing a hardening class system develop in this country. Do we really want to wind up like the States, with their crime, distrust, failing institutions, and vicious political culture?

We're going to need to consider policies like inheritance taxes if we want to avoid that fate. If we want strong public education and public health care to endure in a country with an ageing population, the money has to come from somewhere. Maybe inheritance taxes are a fair trade-off if they mean the affluent don't need to live in gated communities, send their kids to private schools, and pay for private health care.

I agree with this in principle but it would have to be done in a way that served the purpose it is intended to. Taxing farmers heavily because they will inherit land seems like a good way to erode family farms and replace them with corporate farms. Assets do not always equal wealth.

[flamesfever]

Originally Posted by CliffFletcher

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

We're already seeing a hardening class system develop in this country. Do we really want to wind up like the States, with their crime, distrust, failing institutions, and vicious political culture?

We're going to need to consider policies like inheritance taxes if we want to avoid that fate. If we want strong public education and public health care to endure in a country with an ageing population, the money has to come from somewhere. Maybe inheritance taxes are a fair trade-off if they mean the affluent don't need to live in gated communities, send their kids to private schools, and pay for private health care.

The present tax system already keeps most of us from passing on large sums of money.

I think it's essential we have the "haves" and the "have nots". With small business being the driving engine in Canada, and an incentive tax system for small business, we can hopefully keep our employment levels in the private sector healthy. I think an inheritance tax, coupled with our drift towards socialism, we will end up with only "have nots".

[Sliver]

Originally Posted by CliffFletcher

If we believe that adult children will need to inherit large sums from their parents in order to be financially secure, aren't we conceding that we no longer live a broadly prosperous meritocracy? That it's no longer the case that a child raised in an average household who works reasonably hard will have a good life?

Well, it's pretty naive to think we ever lived in a meritocracy. It's closer than feudal times, but being born on third base is a lot closer to home plate than the guy born on the bench.

I'm not even saying kids need an inheritance. I'm saying I want my kids to have an inheritance to insulate them from hardships. What better way to spend money earned than providing a financial leg up and a safety net for the people you love most? Why did I bother having roommates in my house for five years in my 20s, and taking on the risk and stress of operating a business, and shopping at consignment stores to buy used clothes, and buying used cars, and saving more than I spend if not to have more money as I age to do with as I please?

I do agree there is a point at which people are hoarding wealth and have too much, but punitive end-of-life taxes on a guy worth less than $10 million (example figure; open to debate on an actual number) is basically stealing from him. Dude has already paid $3 million in taxes to have that $10 million.

[flamesfever]

It depends on what the assets are that make up the $ 10 million. Estate taxes are already due on the capital gain on certain assets, e.g. company shares, family cottage etc.

[puckedoff]

I do think that income inequality needs to be addressed, but I worry about the fix being in the form of another tax, especially if just directed at general government revenue.

If the government is going to tax wealth, they'd better have a good use of the funds. For example I don't think it is constructive economically to take funds from business owners owners so that the government can purchase more SCUD* missiles.

I mean the US is running trillion dollar deficits, effectively financed by the Fed and spending huge amounts on spreading freedom. Do they really need more funds from their billionaires in order to do that? Is that productive use of capital? Not sure.

*(apologies to CaptainCrunch for not being up to date on modern weaponry)

[you&me]

Originally Posted by puckedoff

I do think that income inequality needs to be addressed, but I worry about the fix being in the form of another tax, especially if just directed at general government revenue.

If the government is going to tax wealth, they'd better have a good use of the funds. For example I don't think it is constructive economically to take funds from business owners owners so that the government can purchase more SCUD* missiles.

I mean the US is running trillion dollar deficits, effectively financed by the Fed and spending huge amounts on spreading freedom. Do they really need more funds from their billionaires in order to do that? Is that productive use of capital? Not sure.

*(apologies to CaptainCrunch for not being up to date on modern weaponry)

I had written a long post that I scrapped earlier that said something similar...

Essentially, there seems to be a misunderstanding of wealth and what wealthy people do with their money. It's not being "hoarded" in the sense of Scrooge McDuck and a swimming pool of gold... The wealth is "in" the economy, whether through investments, foundations, grants or other philanthropic activities. A very small percentage of high-level wealth is inactive or unused... I'm not sure handing any of it over to the government would achieve a higher and better use of the funds.

[flamesfever]

Originally Posted by puckedoff

I do think that income inequality needs to be addressed, but I worry about the fix being in the form of another tax, especially if just directed at general government revenue.

If the government is going to tax wealth, they'd better have a good use of the funds. For example I don't think it is constructive economically to take funds from business owners owners so that the government can purchase more SCUD* missiles.

I mean the US is running trillion dollar deficits, effectively financed by the Fed and spending huge amounts on spreading freedom. Do they really need more funds from their billionaires in order to do that? Is that productive use of capital? Not sure.

*(apologies to CaptainCrunch for not being up to date on modern weaponry)

That's the problem, they almost never do. They just end up reducing the incentive for our the private sector business, and make the majority of the population more and more dependent on the government for survival.

[TheIronMaiden]

Originally Posted by puckedoff

I do think that income inequality needs to be addressed, but I worry about the fix being in the form of another tax, especially if just directed at general government revenue.

If the government is going to tax wealth, they'd better have a good use of the funds. For example I don't think it is constructive economically to take funds from business owners owners so that the government can purchase more SCUD* missiles.

I mean the US is running trillion dollar deficits, effectively financed by the Fed and spending huge amounts on spreading freedom. Do they really need more funds from their billionaires in order to do that? Is that productive use of capital? Not sure.

*(apologies to CaptainCrunch for not being up to date on modern weaponry)

I agree. Taking from 'haves' is not necessarily a direct line to making opportunities for 'have nots'. Simply taking assets from the wealthy will not inherently create wealth for the poor. Structural changes need to occur. That is creating better access to housing, education and healthcare. By and large we have accomplished two of these things ( with some major exceptions). Making equitable housing opportunities is the challenge at hand. Truthfully I don't know how to accomplish this. I suppose that simply putting a cap on how much rent can be charged, or how much a property ( that is land within a city or town) is worth would probably #### up the market. That said, it would directly address the issue at hand rather then being punitive without nuance.

[topfiverecords]

Originally Posted by peter12

Also build more houses/condos/townhomes. It is the largest asset of the upper-middle Boomer class, and its supply has been artificially constrained in order to drive up its price.

Unfortunately that will never change in a capitalistic society. Just like hard drives, the space will be slow dripped to society to keep the cost per GB/SQ.FT high.

[GGG]

Originally Posted by you&me

I had written a long post that I scrapped earlier that said something similar...

Essentially, there seems to be a misunderstanding of wealth and what wealthy people do with their money. It's not being "hoarded" in the sense of Scrooge McDuck and a swimming pool of gold... The wealth is "in" the economy, whether through investments, foundations, grants or other philanthropic activities. A very small percentage of high-level wealth is inactive or unused... I'm not sure handing any of it over to the government would achieve a higher and better use of the funds.

Don’t lowand even negative bond yields suggest that there is too much money available in the market. That banks can borrow money at below the rate of inflation to me seems like there is too much money being invested and not enough money consuming. Or the level of consumption currently in the world (as insane as it is) isn’t enough to support the amount of capital available to the world.

So if all this wealth is just competing with itself for investments wouldn’t redistribution to the consumer side Allow it to be spent spurring more demand.

[blankall]

The issue I'm seeing is that no government wants to take the issue head on. Any action that would erode the wealth of babyboomers would be political suicide.

Successive governments have kicked the problem down the road. For example, interest rates are continually lowered and kept at all time lows, which massively inflates the housing market. The government eventually came around and started putting restrictions on foreign ownership, but these restrictions don't really have any teeth and occurred only after China had put their own restrictions in place.

Now we're just in a massive bind that there doesn't look an easy way out of. Inflation continues to grow, pushing capital out of reach, which is normally when you would raise interest rates. However, consumer confidence is also down, with a potential major recession constantly looming, which prevents the government from raising interest rates.