Quote:
Originally Posted by CanuckShooter
A tiny little change to the capital gains isn't what I'd call taxing the rich.
I always wondered why they don't tax capital gains at 100% the same as interest or wages. The claiming 50% of your gains for taxes is really a tax break for the rich isn't it? Same with the dividend tax credit, flow through shares etc etc etc.
Personally I don't think the rich need tax breaks, the working poor are the ones that could use tax relief.
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Capital gains were taxed a 50% for two reasons.
1. When you buy something which appreciates, a significant part of the appreciation typically comes as a result of inflation as result of bad government management.
2. The idea is to
encourage investment - that is to put up and risk your money with no certainly of any return or even a return of your investment so that companies can use that money to buy things like new equipment, to hire more people and in general to help to increase economic activity. This is vastly different than say going to work every day, putting your own labour but nothing else on the line and earning a wage for your services.
Increasing the capital gains tax is a disincentive to investment.
It is also a boot to the shorts of anyone who is self employed and has hoped to see their retirement funded by the sale of shares in the company that they have founded.
This would be folks who have busted their backsides for years for sometimes no pay at all and certainly no consideration of anything like overtime, paid corporate and personal income taxes, hired and paid people
like you and hoped to retire on the sale of the shares in the company that they founded and shepherded through the years.
Why would anybody bother
In the Jagmeet/Clown Prince world the correct answer is to get a safe government job, put in your time and retire with a fully indexed pension.
As for the dividend tax credit... Dividends are paid out of
tax paid income That is the corporation paying the dividends has already paid something to the tune of 30 to 40% on the income. The dividend tax credit adjusts the tax payable on dividends received so that the original income is not double taxed - for sake of argument, a company pays 40% on the original dollar earned. that leaves $.60 to pay a dividend. if that is then taxed at a further 40% that would leave $ .36 of the original dollar with the government having taken $.64. The dividend tax credit reduces the second layer of tax on the original dollar to a level that is closer to the maximum personal income tax rate.