Originally Posted by
Cash Money Hoes
Elevated Capital gains on investment returns within businesses is a horrible idea.
What seems to be missed by many T4 earners is that by applying elevated to taxes on capital gains returned through investment and risk taking, risk taking and investment is disincentivized. So we're in effect disincentivizing the people who are most capable and have the means to make investments in worthwhile capital projects, from making investments in the Canadian economy. We're losing ground to every developed and developing nation around he world, which means the standard of living the vast majority of T4 earners is not improving and slipping for some.
The hard truth is regular individuals trading time for money are not the creators of this or other developed countries, they are the beneficiaries. It is a small percentage of the population, entrepreneurs and innovators who have taken risk to innovate and build who have created this great country, now in decline. This progress and improving infrastructure is what has created a need for regular people to trade their time for money. If you disincentive this small percentage of the population from doing what they do best, they will move on there will be fewer left to provide jobs for Canadians. We should celebrate and support those that are effective capital allocators at every level of business, big or small.
Unfortunately the current capital gains regime does not delineate between a Doctor, lawyer or real estate agent who has a professional corporation as a tax deference strategy and uses retained earnings to buy SPY, from a business owner who is using retained earnings to acquire another business or invest and in other private businesses etc. I think if you incentivized the latter your supporting those most capable of improving productivity in Canada. While those who fall into the former category, should pay an elevated tax rate on capital gains generated through their stock portfolio or other institutional investment returns, as they are simply working the system to avoid paying taxes on what should really be personally recognized investment income. But the reality is this is impossible to effectively sort.
It's deflating to see ideology guide government decisions which ultimately are making Canada unattractive to those who we would actually want to come here to contribute and benefit.