These videos talk about the American system, but the same kind of things happen in Canada too.
I would suggest in the future adding some more text or opinion rather than just posting videos. I only watched the first one but found it to be pretty lopsided.
Do we have an issue and in Canada and the US with capital gains tax - personally I don't believe so. The intent of the reduced rate was and continues to be to promote investment in revenue generating businesses that help the economy. Similar to Canada's small business exemptions, the Income Tax Act was designed to promote the growth of business in Canada which benefits the lives of everyone.
Now, are we seeing issues with people taking advantage of principal resident exemptions? Yes, the CRA should be monitoring and auditing this heavily.
Should we increase the rate from 50% to 75% on some capital gains? You could certainly make the argument. However, bifurcating capital gains based on passive investments and active investments is a challenge even for the professionals.
Another issue I have with the first video - step up basis on tax. The video has completely ignored that upon step-up the US see's a 40% tax on estate based on the stepped up basis. This was designed to simplify the process (it is hard to get tax basis for investments decades and daces old) and was put in place to mitigate double taxation (ie. taxed on death and then taxed on disposition of the beneficiary using the old basis).
Canada does not have an estate tax. Which I believe it should and would help curb the disparity between the ultra rich. I believe the US has a $10 or $11 million exemption and anything extra is taxed at that 40% rate. Canada could have something similar in place rather than our stupid probate rules which vary greatly province by province.
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The rich are always going to get away with avoiding taxes and I don't think there's any way around that. I don't know why people lose sleep over this wealth disparity thing that's been going on since the beginning of man as we have no control over this as the politicians that claim they will combat tax evasion are also playing the game themselves. People need to focus on how you can maximize your earning potential and worry less about what the rich are getting away with.
… People need to focus on how you can maximize your earning potential and worry less about what the rich are getting away with.
Shame on you! That’s not our marxist-leninist way, comrade.
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Pretty simple to avoid taxes. Set up a personal corporation. You pay 11-13% tax on the money you keep in the corporation. This rate is lowered with write offs. You can also invest this money into passive investments while in corporate solution, and the profits from these investments are also sheltered.
Structure your finances in a way that any money you take out is minimal, and use write offs for things like home officers, employment use vehicles, business dinners, etc... To keep that tax minimal.
The more you make, the higher proportion of money that stays in corporate solution, and the lower the effective tax rate.
Things like capital gains exemptions, a lack of inheritance tax, trusts, etc. ensure the rich stay rich.
The only real thing the government has done to impede this is getting rid of income splitting.
Edit: disclaimer... Do not do this before talking to a tax lawyer or accountant.
I do too pay taxes. Far too much.
Key is not illegal tax avoidance but rather legal tax reduction.
Moreso it’s about really honestly truthfully making lots of smart small repeatable expenditure choices, and putting those savings away. Like many bankers say, those who don’t make a lot have a far better idea where their money goes than most of the middle class and richer who tend to spray it everywhere.
What this means is consider the following:
- minimize credit and late fees, or any fees.
- unless necessary don’t buy until you have cash
- really really differentiate between needs and wants
- stop or minimize wastage
- don’t always buy new, or the best
- don’t make dumb financial commitments
- don’t have kids, marry wealthy, find a sugar mama. ����
Pretty simple to avoid taxes. Set up a personal corporation. You pay 11-13% tax on the money you keep in the corporation. This rate is lowered with write offs. You can also invest this money into passive investments while in corporate solution, and the profits from these investments are also sheltered.
Narrator: "and that was the day that blankall first learned the term 'personal services business'."
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Narrator: "and that was the day that blankall first learned the term 'personal services business'."
Lol.
As a lawyer I get a pass on that one. Yes, the incorporation plan only applies to certain professions and business relationships, but most of those are people who are already earning lots.
How the Rich Avoid Paying Taxes
