How do you prevent the eventual concentration of all capital in the hands of very few people if you are unwilling to tax Capital after it’s been acquired?
I agree with you at the 99% population level that there isn’t a need to tax estates or Capital after it’s been acquired but there needs to be a redistribution method for the outliers.
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I'm always curious - genuinely - how Conservatives would address wealth inequality. By every measure it has increased massively in the past forty years, and continues to get worse. Historically, this inequality has unerringly led to instability and worse.
The reason the gap grows is compound interest on investments - and taxing more doesn't solve the problem - The gap just grows slower - But with compound interest it still ends up at the same spot and same 'problem.'
Maybe businesses over a certain size should be required to put a % (larger % - I will admit I am not sure how deductions work) in the CPP or a similar program - Where employers are then forced to pay for employees savings. (Leaving aside the CPP and the way it is run and distributed by the government....)
It is easy to accumulate wealth slowly if you have even a small amount of disposable income - $250 a month for 45 years (20-65 years old) means you end with a million $$ (inflation ignored)
As long as anyone is able to earn investment interest/income at a higher rate then inflation they will see the gap grow over those who cant. And it grows exponentially because of compound interest. The wealth gap can not be controlled with taxing, just slowed.
And its really all irrelevant with the amount of $$ banks/countries are printing. While 10 million sounds big, the reality is the tax the rich vs the budget makes zero difference. The government just prints more money that the 'rich' are already funding in the future with their taxes as they pay the majority of taxes which pay for the interest on the debt!
The rich/asset owners are secretly praying for universal income. The money all ends up back with them through buying of good/services/assets and its the non asset owning middle class who again would suffer.
The problem is math and compounding numbers. You mathematically can not close the wealth gap - you can just slow the rate it grows
I would guess that most of the off-the-books economic activity in Canada is in the trades. I know a couple commercial painters in their 40s who have never paid income taxes. Ever.
These guys aren’t funnelling money into foreign assets. They’re the sorts of people who would at least be putting something into the public coffers with increased consumption taxes.
These are the types of guys CRA was looking into blitzing a few years ago. That was the issue with the CRA demanding the commercial customer list from Home Depot. Anyone who was buying a crap ton of stuff from there at major discount but somehow not really paying taxes are likely going to get blitzed hard if they can't prove what they used the materials for.
The underground economy is estimated to be worth around $50 billion a year in Canada. Even conservatively at 10% on average (ie: You can't get them all), that's 5 billion in uncollected taxes per year.
I do not believe that we have an overwhelming about of taxes lost per year like the USA. Panama papers wise, lots of posters are just talking out of their ass in terms of what they thing is being dodged.
CRA has recovered around 21 million via 35 of 200 cases.
Of the stashed money, 540 of the 900 cases identified filed appropriate taxes and didn't warrant an audit or around 60%. It's not every single individual that was identified was hiding income. That leaves around 360 cases where CRA needed to take an extra look. 21 million divided by 35 cases x 360 = around $200 million. That's quite a bit of dodged taxes, sure, but that's a one time thing via multiple years worth of dodging. The underground economy in Canada is arguably worth at least 5x that amount PER YEAR ($5 Billion / $200 million).
Extra taxes on the ultra rich rather than targeting the underground economy in Canada is like cutting down your orchard for a tiny bit of extra lumber income and screwing yourself over long term because the orchard business is basically done. No fruits, no labour, no transportation, no fruit side business etc. That's what some others are saying in terms of the ultra rich (the majority who are seemingly paying their taxes) being squeezed to the point they just take their assets and go elsewhere.
Also, keep in mind that in a few cases, the CRA does indeed know of certain targets who are seemingly not paying their fair share. They have knowledge something is going on, but they don't have the evidence necessary for a slam dunk win (and the ultra rich are obviously not going down without a fight).
You also have to consider that CRA audit is also technically a business. If it's going to cost them $1,000 of time and effort to open up a case and collect $300 of extra taxes and interest and penalties, they lose money. Time and effort is finite, so it's better to spend $1,000 on trying to chase a $10,000 case. The margins are better. Spending $10 million for maybe a chance at $13 million in a few years is dumb from a business standpoint when CRA has so many opportunities to easily spend $10 million and get around that each year for a few years (ie: project industries).
That being said, the vast majority of morons who think they're basically small fries and think the CRA wouldn't waste the man power on them... are basically morons. The CRA doesn't need to waste human labour to flag individuals. This is automatically done via technology. Yes, the CRA is a bit of a dinosaur that still uses facsimile in the 2020s onwards, but they have computers. Those reviews and requests for information that most people easily send the necessary info to satisfy the request? Most likely nearly 100% pure automation.
Lastly, if someone is going to point at some of the ultra rich in Canada and think that everything they have is tax evaded, you're hilariously misinformed. Someone like Edwards who is resident of UK for tax purposes, still pays taxes in Canada due to the Canada UK treaty. The vast majority of his wealth is in a Canadian company, paying Canadian taxes. CNRL for instance is a publicly traded company. That's right out in the open and obviously taxed. If someone like Edwards is dodging certain Canadian taxes, the CRA hops right over to CNRL and says they have to withhold taxes before transferring funds out of Canada. It's not rocket science to enforce. Pattersons, Thomsons and Weston families? Again, right out in the open. The most that maybe they dodge is maybe some additional income/appreciation on acquisitions/sales of assets acquired using post tax income.
That's what things like the withholding tax, FAPI rules and FAD rules address. Don't know what those are? Sit down and just accept that Canada has rules to chase down foreign income to ensure taxation. Plus there's rules to ensure taxes are withheld before sending cash overseas (and how do they bypass through our oligopoly of Banks?). I mean maybe there's bitcoin, but again CRA will know how to track that soon and the amount they're trying to save is often a pittance vs the headaches that would arise from being caught. It's basically not worth it for them. I know many people have no confidence in humanity, but it isn't always as bad as they make it out to be.
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The savings that I (or anyone) has built up is my private property and if I want to give it to my children the government should have no right to take a piece.
It is just my personal opinion.
I guess therein lies the argument for people who are for an estate tax. It's your private property until you die. Afterwards, your children still get a portion of it, just not 100% of it. It is a way to re-distribute wealth, and I can get the argument behind it.
I think there is a really interesting discussion to be had on how do people vote.
- Do you vote in direct self interest? Vote for more taxation and services if you pay below median. Vote for daycare because you have kids, vote for low taxes because you have money?
Or
- Do you vote for a set of outcomes that you believe will be best for the country / Province / city
And if you vote based on the first do you believe it facilities the second and if you vote for the second are you actually still voting in self interest because creating the best country will create opportunity for you and a better place to live which is ultimately self serving.
Always self interest. I always assumed everyone else did too.
I'm always curious - genuinely - how Conservatives would address wealth inequality. By every measure it has increased massively in the past forty years, and continues to get worse. Historically, this inequality has unerringly led to instability and worse.
What should we do, if not redistribute? Nothing?
Yeah.
The government should have a well funded and robust health care and education system.
They should fund infrastructure and the military.
Essential services like EI, CPP, etc. are fundamental and should stay.
The government does a lot already but it can't be all things to all people.
I guess my question for progressives is where do you draw the line?
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Quote:
Originally Posted by the_only_turek_fan
Yeah.
The government should have a well funded and robust health care and education system.
They should fund infrastructure and the military.
Essential services like EI, CPP, etc. are fundamental and should stay.
The government does a lot already but it can't be all things to all people.
I guess my question for progressives is where do you draw the line?
So if inequality is becoming more of a problem, should we increase funding to schools, health care, etc? If you think that will address the growing gap, how should we pay for that?
As for the line - I think it might be a good idea to return to tax rates more similar to those in the seventies as a start.
So if inequality is becoming more of a problem, should we increase funding to schools, health care, etc? If you think that will address the growing gap, how should we pay for that?
As for the line - I think it might be a good idea to return to tax rates more similar to those in the seventies as a start.
I don't think inequality is as big a problem in Canada as it is in the United States.
These are the types of guys CRA was looking into blitzing a few years ago. That was the issue with the CRA demanding the commercial customer list from Home Depot. Anyone who was buying a crap ton of stuff from there at major discount but somehow not really paying taxes are likely going to get blitzed hard if they can't prove what they used the materials for.
The underground economy is estimated to be worth around $50 billion a year in Canada. Even conservatively at 10% on average (ie: You can't get them all), that's 5 billion in uncollected taxes per year.
I do not believe that we have an overwhelming about of taxes lost per year like the USA. Panama papers wise, lots of posters are just talking out of their ass in terms of what they thing is being dodged.
CRA has recovered around 21 million via 35 of 200 cases.
Of the stashed money, 540 of the 900 cases identified filed appropriate taxes and didn't warrant an audit or around 60%. It's not every single individual that was identified was hiding income. That leaves around 360 cases where CRA needed to take an extra look. 21 million divided by 35 cases x 360 = around $200 million. That's quite a bit of dodged taxes, sure, but that's a one time thing via multiple years worth of dodging. The underground economy in Canada is arguably worth at least 5x that amount PER YEAR ($5 Billion / $200 million).
Extra taxes on the ultra rich rather than targeting the underground economy in Canada is like cutting down your orchard for a tiny bit of extra lumber income and screwing yourself over long term because the orchard business is basically done. No fruits, no labour, no transportation, no fruit side business etc. That's what some others are saying in terms of the ultra rich (the majority who are seemingly paying their taxes) being squeezed to the point they just take their assets and go elsewhere.
Also, keep in mind that in a few cases, the CRA does indeed know of certain targets who are seemingly not paying their fair share. They have knowledge something is going on, but they don't have the evidence necessary for a slam dunk win (and the ultra rich are obviously not going down without a fight).
You also have to consider that CRA audit is also technically a business. If it's going to cost them $1,000 of time and effort to open up a case and collect $300 of extra taxes and interest and penalties, they lose money. Time and effort is finite, so it's better to spend $1,000 on trying to chase a $10,000 case. The margins are better. Spending $10 million for maybe a chance at $13 million in a few years is dumb from a business standpoint when CRA has so many opportunities to easily spend $10 million and get around that each year for a few years (ie: project industries).
That being said, the vast majority of morons who think they're basically small fries and think the CRA wouldn't waste the man power on them... are basically morons. The CRA doesn't need to waste human labour to flag individuals. This is automatically done via technology. Yes, the CRA is a bit of a dinosaur that still uses facsimile in the 2020s onwards, but they have computers. Those reviews and requests for information that most people easily send the necessary info to satisfy the request? Most likely nearly 100% pure automation.
Lastly, if someone is going to point at some of the ultra rich in Canada and think that everything they have is tax evaded, you're hilariously misinformed. Someone like Edwards who is resident of UK for tax purposes, still pays taxes in Canada due to the Canada UK treaty. The vast majority of his wealth is in a Canadian company, paying Canadian taxes. CNRL for instance is a publicly traded company. That's right out in the open and obviously taxed. If someone like Edwards is dodging certain Canadian taxes, the CRA hops right over to CNRL and says they have to withhold taxes before transferring funds out of Canada. It's not rocket science to enforce. Pattersons, Thomsons and Weston families? Again, right out in the open. The most that maybe they dodge is maybe some additional income/appreciation on acquisitions/sales of assets acquired using post tax income.
That's what things like the withholding tax, FAPI rules and FAD rules address. Don't know what those are? Sit down and just accept that Canada has rules to chase down foreign income to ensure taxation. Plus there's rules to ensure taxes are withheld before sending cash overseas (and how do they bypass through our oligopoly of Banks?). I mean maybe there's bitcoin, but again CRA will know how to track that soon and the amount they're trying to save is often a pittance vs the headaches that would arise from being caught. It's basically not worth it for them. I know many people have no confidence in humanity, but it isn't always as bad as they make it out to be.
Thanks - well written, glad someone understands the ITA
There is not as much circumvention of taxes as the media makes it out to be. The rich are an easy target but the ITA is actually very well designed to contemplate tax avoidance. And when it doesn't it usually gets covered off by our friend the General Anti Avoidance Rule.
As for the underground economy, another one I heard the CRA is really pushing to look at is service related tips. The amount of stories I have heard from servers and bartenders clearing $50K in tips plus per year untaxed is insane. Multiply that by how many people work in the industry and that is a far larger number in missed taxes than the rich we are talking about...
I think there is a really interesting discussion to be had on how do people vote.
- Do you vote in direct self interest? Vote for more taxation and services if you pay below median. Vote for daycare because you have kids, vote for low taxes because you have money?
Or
- Do you vote for a set of outcomes that you believe will be best for the country / Province / city
And if you vote based on the first do you believe it facilities the second and if you vote for the second are you actually still voting in self interest because creating the best country will create opportunity for you and a better place to live which is ultimately self serving.
Start the topic so I can argue with Enoch that lefties aren't all poor folk looking for handouts
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These are the types of guys CRA was looking into blitzing a few years ago. That was the issue with the CRA demanding the commercial customer list from Home Depot. Anyone who was buying a crap ton of stuff from there at major discount but somehow not really paying taxes are likely going to get blitzed hard if they can't prove what they used the materials for.
The underground economy is estimated to be worth around $50 billion a year in Canada. Even conservatively at 10% on average (ie: You can't get them all), that's 5 billion in uncollected taxes per year.
I do not believe that we have an overwhelming about of taxes lost per year like the USA. Panama papers wise, lots of posters are just talking out of their ass in terms of what they thing is being dodged.
CRA has recovered around 21 million via 35 of 200 cases.
Of the stashed money, 540 of the 900 cases identified filed appropriate taxes and didn't warrant an audit or around 60%. It's not every single individual that was identified was hiding income. That leaves around 360 cases where CRA needed to take an extra look. 21 million divided by 35 cases x 360 = around $200 million. That's quite a bit of dodged taxes, sure, but that's a one time thing via multiple years worth of dodging. The underground economy in Canada is arguably worth at least 5x that amount PER YEAR ($5 Billion / $200 million).
Extra taxes on the ultra rich rather than targeting the underground economy in Canada is like cutting down your orchard for a tiny bit of extra lumber income and screwing yourself over long term because the orchard business is basically done. No fruits, no labour, no transportation, no fruit side business etc. That's what some others are saying in terms of the ultra rich (the majority who are seemingly paying their taxes) being squeezed to the point they just take their assets and go elsewhere.
Also, keep in mind that in a few cases, the CRA does indeed know of certain targets who are seemingly not paying their fair share. They have knowledge something is going on, but they don't have the evidence necessary for a slam dunk win (and the ultra rich are obviously not going down without a fight).
You also have to consider that CRA audit is also technically a business. If it's going to cost them $1,000 of time and effort to open up a case and collect $300 of extra taxes and interest and penalties, they lose money. Time and effort is finite, so it's better to spend $1,000 on trying to chase a $10,000 case. The margins are better. Spending $10 million for maybe a chance at $13 million in a few years is dumb from a business standpoint when CRA has so many opportunities to easily spend $10 million and get around that each year for a few years (ie: project industries).
That being said, the vast majority of morons who think they're basically small fries and think the CRA wouldn't waste the man power on them... are basically morons. The CRA doesn't need to waste human labour to flag individuals. This is automatically done via technology. Yes, the CRA is a bit of a dinosaur that still uses facsimile in the 2020s onwards, but they have computers. Those reviews and requests for information that most people easily send the necessary info to satisfy the request? Most likely nearly 100% pure automation.
Lastly, if someone is going to point at some of the ultra rich in Canada and think that everything they have is tax evaded, you're hilariously misinformed. Someone like Edwards who is resident of UK for tax purposes, still pays taxes in Canada due to the Canada UK treaty. The vast majority of his wealth is in a Canadian company, paying Canadian taxes. CNRL for instance is a publicly traded company. That's right out in the open and obviously taxed. If someone like Edwards is dodging certain Canadian taxes, the CRA hops right over to CNRL and says they have to withhold taxes before transferring funds out of Canada. It's not rocket science to enforce. Pattersons, Thomsons and Weston families? Again, right out in the open. The most that maybe they dodge is maybe some additional income/appreciation on acquisitions/sales of assets acquired using post tax income.
That's what things like the withholding tax, FAPI rules and FAD rules address. Don't know what those are? Sit down and just accept that Canada has rules to chase down foreign income to ensure taxation. Plus there's rules to ensure taxes are withheld before sending cash overseas (and how do they bypass through our oligopoly of Banks?). I mean maybe there's bitcoin, but again CRA will know how to track that soon and the amount they're trying to save is often a pittance vs the headaches that would arise from being caught. It's basically not worth it for them. I know many people have no confidence in humanity, but it isn't always as bad as they make it out to be.
Thank you for the reasonable rebuttal. Cheers!
Putting more time, resources, & effort into going after the underground economy is a great idea. 100% agree there.
I also sincerely believe that the wealthy are given too much leeway in terms of appeals, negotiating power, etc. When it comes to taxes on offshore money, it should be that the CRA determines how much you pay, and you pay it end of story. No beating around the bush with appeal processes that take years and make it not worth it for the CRA to keep pursuing many of these cases. While due process is an important thing, and our intuitions tell us that everyone should be guaranteed it, we have to call a spade a spade here and realize that the wealthy tend to abuse these processes and end up paying less than they ultimately should, because they make it too expensive & cumbersome for the CRA to pursue their cases.
The other issue is tax avoidance techniques, which are technically legal but allow a person to bring down their effective tax rate. These techniques are related to already accumulated wealth, not income, and as such are overwhelmingly used by multimillionaires & billionaires, not everyday people. The videos in the OP talk about those.
Canada does not have an estate tax, and IMO badly needs one. And in case anyone's wondering, I personally stand to lose if such a tax is implemented. That's right, I'm advocating for a policy that will have a negative impact on me personally if implemented. GASP! How can such a thing be possible??? The answer is I happen to give a damn about others, that's how.
Some point out that when a person dies, the person's assets are considered sold at that point, and 50% of the capital gains on the asset are considered income for that tax year. Some would argue that this amounts to an estate tax. I disagree. Capital gains tax and estate tax are two different things. An estate tax looks specifically at the value of the assets being inherited, where CGT looks at the amount of appreciation in the value of the asset over time.
People bring up the issue of double taxation. I'd argue it's not an issue at all. Whether you're taxed x amount twice, or 2x amount once, the end result is the same amount of tax paid. It's the same thing. A government should put in any tax system that it needs to in order to raise the revenue it needs to provide services, programs, infrastructure, etc. Any combination of taxation policies is justified, as long as the overall system is feasible and doesn't place an unreasonable burden on anyone.
So yes, time for an estate tax. For all the talk coming from conservatives about bootstraps/hard work/self determination, it does come across as ironic when they want to carve out a nice neat little exemption to those principles for those who happen to have won the birth lottery and lucked their way into being born into a family that has significant wealth.
Raising the GST to curb consumption is probably a good idea too.
it should be that the CRA determines how much you pay, and you pay it end of story. No beating around the bush with appeal processes that take years and make it not worth it for the CRA to keep pursuing many of these cases. While due process is an important thing, ...
a too.
I could be mis-reading this but are you arguing against due process? Would it be better if the CRA had ultimate power to seize assets with no recourse, I do not think so, that is third-world dictator-esque.
Quote:
Originally Posted by Mathgod
The answer is I happen to give a damn about others, that's how..
How is it that the funds to help others has to come from the rich, or other individuals? Is it more productive to fund government programs by taking money out of the economy, earning 5% than by the government raising funds at 1.5% with debt offerings?
The Government isn't really capital constricted, and I don't think they could necessarily solve the complex problems of helping everybody even if they had free reign to impose judgements on the risk and force liquidation of otherwise productive assets.
Canada does not have an estate tax, and IMO badly needs one. And in case anyone's wondering, I personally stand to lose if such a tax is implemented. That's right, I'm advocating for a policy that will have a negative impact on me personally if implemented. GASP! How can such a thing be possible??? The answer is I happen to give a damn about others, that's how.
Some point out that when a person dies, the person's assets are considered sold at that point, and 50% of the capital gains on the asset are considered income for that tax year. Some would argue that this amounts to an estate tax. I disagree. Capital gains tax and estate tax are two different things. An estate tax looks specifically at the value of the assets being inherited, where CGT looks at the amount of appreciation in the value of the asset over time.
People bring up the issue of double taxation. I'd argue it's not an issue at all. Whether you're taxed x amount twice, or 2x amount once, the end result is the same amount of tax paid. It's the same thing. A government should put in any tax system that it needs to in order to raise the revenue it needs to provide services, programs, infrastructure, etc. Any combination of taxation policies is justified, as long as the overall system is feasible and doesn't place an unreasonable burden on anyone.
So yes, time for an estate tax. For all the talk coming from conservatives about bootstraps/hard work/self determination, it does come across as ironic when they want to carve out a nice neat little exemption to those principles for those who happen to have won the birth lottery and lucked their way into being born into a family that has significant wealth.
Raising the GST to curb consumption is probably a good idea too.
Yes, you've said that you support an estate tax, but you've still given none of us a reason why we should. "Canada does not have an estate tax, and IMO badly needs one" -- why? I don't really care that you stand to lose and don't care, I do as do many of us, and thus I do care. You've explained that taxation happens for various transactions -- great, there are also plenty of instances where an exception exists. You've not explained why this particular exception should not be, only that you believe it so. I remain unconvinced.
As a left-leaning progressive who wasn't born into a family with significant wealth, an estate tax would impact what little I might get from my parents one day. The same argument against a flat income tax (10% of $50,000 is more impactful to that person than 10% of $5,000,000) could also apply to an estate tax. I do well for myself and my family, but someone who is less fortunate getting whatever their parents have left might be able to help themselves out quite a bit in this world, but somehow you think it's justified to impose upon them a tax that would disproportionately affect them versus someone who is getting a ton more.
Raising GST also impacts lower income people disproportionately. Nice.
I certainly 'give a damn' about others, but I think you're going about accomplishing your goals entirely the wrong way.
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How can such a thing be possible??? The answer is I happen to give a damn about others, that's how.
