— Feature, Musings —04.21.2024 09:01 AM
— Feature, Musings —04.21.2024 09:01 AM
Warren,
CNN came around today to my view on Netanyahu and his desire for a multi-faceted war to keep him in office for as long as possible. He eagerly wants to take on Iran in hopes of turning around public opinion, or at least enough of it to assure his government a continuing coalition majority in the Knesset.
Warren,
CPC going to cut taxes? I hope so, but it’s best to leave the juicy details for the campaign. I favour personal tax cuts, but only targeted business tax cuts for those companies that create jobs. NOT at-large business tax cuts.
How does a tax cut help those who earn so little that they really dont pay much in taxes???
49th year of doing tax work and actually I am often shocked at what someone who makes, say, 50k a year pays.
Mike,
I would extend the Guaranteed Income Supplement (GIS) to people younger than 65 years old.
And take it and OAS away from people who earn money through entities they control. There should be a look through and if there ever is a wealth tax, that is the FIRST thing they should tax.
Warren,
If Iran strikes back, which they likely will, then Netanyahu goes for the various nuclear facilities, and then it’s a de jure Middle East war.
Ronald,
Agreed: Iran will definitely strike back.
My fear: co-ordinated strikes at Israel, originating from Iran, Syria and possibly Lebanon, all at once.
Iran’s most recent launches were softball lobs.
Heck, Iran even gave everyone the head’s up that the missiles and drones were coming.
This gave Iran a sense of how Israel’s defence shield responds when fully engaged.
Now, the Iranians know.
Douglas,
Agreed. However, Iran has a huge Achilles Heel: its seemingly total lack of defensive systems such as Arrow 2 & 3, David’s Sling, Iron Dome, Patriot, NASAMS and other batteries. No wonder, Bibi is still smiling.
Warren,
The pro-Hamas crowd and the inevitable road to perdition. The other Palestinians need to wake up.
Warren,
One was called a (rented) camp (Dad’s side) and the other was simply known as Beaumont (Mom’s side).
Warren,
LeBlanc will never win against Poilièvre. Just the repeated patronage thing will make Just Visiting look like a minor strategic concept.
The first ad pans in on a homeless mother desperately trying to take care of her children in their car. Then the focus veers onto the continuous stream of Liberal patronage, cronyism, cultism and patronage made to relatives by either the outgoing leader or members of the cabinet. Will work like a charm for the CPC.
And critically important, the voiceover only begins after the long and dramatic visuals of the Mom and her children in the car. Pictures as Kinsella would say.
Warren,
Remember that the carbon tax does not raise gas prices in Quebec or BC because of cap and trade.
Wrong Ronald. No Cap and Trade in BC. Carbon tax in BC goes directly to general revenue now.
Paige,
Thank you.
Warren,
Carbon tax is bullshit. Yup, the Liberals will axe it under a new leader. Guaranteed.
Warren,
We aren’t stupid, but will we be strategically short-sighted? That remains to be seen.
Great tunes as usual.
It’s a cottage not a cabin or camp.
To me, LeBlanc comes across as a greasy mafioso consigliere. The fact he had to clean up Justin’s messes is a bug not a feature.
The housing promise was ridiculous. They should have built 98 just during your podcast.
Justin did have two competent females MPs he could have passed the baton to but he kicked them both out.
Long rant since this is literally in my wheelhouse. The budget-taxes go up and taxes go down but this was a piece of work. When they said it only impacted .13%, I knew it was a lie right away just based on the clients impacted in our office. And there is so much idiotic uninformed nonsense about it on X.
The biggest problem is the lack of a break on the inclusion rate on the first 250,000 within a corporation when it is provided to individuals. The ironic thing, of course, is if you have appreciated assets you have built up outside of a corporation, RRSP or TFSA, you need the break LESS then the people who don’t. The issue is that this was the deal they made with the docs to keep their fees down. We will provide you with tax breaks but keep your fees down. But they keep bringing in changes to reduce the benefits. This is such a terrible idiotic unfair idea, I remain convinced they KNOW THAT and will reverse course so they can say they are “listening to Canadians”. The problem is that it is a trap for the Tories but the medical lobby is powerful enough that they can lobby on their own. I suspect it has already started. Lots of the medical types supported Justin at the ballot box and financially in 2015. They are likely some of the people giving Liberal MPs a piece of their mind in the swing ridings:
https://www.thestar.com/politics/liberal-mps-fear-justin-trudeaus-budget-is-a-gift-to-pierre-poilievre-and-that-the/article_a586502e-fe93-11ee-a228-43af78cbb1ff.html?utm_medium=social&utm_source=twitter&utm_campaign=user-share
I have a good friend I used to train with. He would have considered the NDP far right at one time. We had a lot of interesting conversations on the trails. He makes well under 100k a year. He scrimped and saved and did without a lot of things and has managed to build up a bunch of equity in two rental properties. He has now discovered, to his shock, that he isconsidered “rich” and will be impacted by this. He is not even going to pass go. Straight from the NDP to the Tories.
The 250k issue is unfair in the same way the fact that TOSI was applied to individuals over 65 when the rules were first announced in 2017. It was rightly pointed out to the bureaucrats who drafted the legislation(who clearly lacked any self-awareness) that had gold plated pensions were allowed to split said gold plated pension with their spouses when they retired but they were not letting self employed people do it. They rightly backed off on that.
As you know, I despise this govt and can’t wait until it is voted out.
But shifting the tax burden ever so slightly away from wage-earners and towards asset-holders is a rare win for the Liberals and probably a sign of a secular shift in tax policy regardless of who is in government over the next decade. Poilievre is highly unlikely to reverse this. His focus will be on lowering taxes for productive workers, not idle real estate investors.
Telling young middle-class renters who pay 30-50% tax on their hard-earned labour income that they should weep for very wealthy, mostly older, real estate investors required to pay slightly higher taxes on their RE bubble windfall is a political non-starter. The inclusion rate on ALL capital gains was 75% in the 1990s and the world didn’t end.
I would generally agree with you except continually clawing back tax dollars from the doctors(and not from regular folks on the first 250k) when it was LITERALLY the deal that was made with them to keep fees down is exactly the same as clawing back the gold plated pensions of the civil service(which I would have no problem with). That was the main focus of my rant. And the fact that the .13% was a lie. And I agree that Pierre will not reverse this and many of the other things the Liberals have brought in. I literally have the receipts because I have seen governments come and go in the last 49 years I have been in the tax business and very rarely are MATERIAL things reversed no matter who is in power. But try telling a Tru-anon that.
I favour lower taxes on everyone who actually works, at all income levels, rather than those who sit on assets. Doctors who endured 8 years of expensive education and 2-4 years of gruelling residency should not then be milked by the govt to pay for programs that mostly go to non-workers / non-taxpayers. I’m not an expert on asset purchases within corporations. If I’m not mistaken, doctors who incorporate to avoid a 53% marginal tax rate on their labour income (say $500K a year) tend to simply pay themselves a portion (say $100K) and then divvy out the rest of the earnings to immediate family members who then pay a lower tax rate. This advantage is untouched by the new inclusion rate on capital gains, is it not?
“I’m not an expert on asset purchases within corporations.”
That’s clear. Let’s hope you aren’t advising anyone at least when it comes to tax policy. When it comes to that field a little bit of knowledge is actually dangerous. Folks have to know what they don’t know. Literally Justin’s problem.
Let’s start with the fact the the TOSI rule changes in 2017 took away the ability to sprinkle income to family members as you describe. So that premise is wrong. I actually agreed with that change. It was basically abuse. BUT AS I INDICATED ELSEWHERE, THEY APPLIED THAT CHANGE TO FOLKS OVER 65 WHEN THE LAURENTIAN ELITES WHO WROTE THE LEGISLATION WERE ABLE TO SPLIT THEIR PENSIONS WITH THEIR SPOUSES. They backed off on that because they had to.
With me so far?
The reason they did that is because THAT WAS BASICALLY THE DOCTORS’ RRSPS WHICH WOULD BE JUST LIKE THE GOLD PLATED PENSIONS OF THE LAURENTIAN ELITES
Hopefully you are still following.
Now, what they have done is let those rich greedy real estate investors get a break on the first 250k in capital gains and they didn’t give it to the docs(when we are in the middle of a health care crisis) which means their pensions just took a hit. I think civil service pensions are too high. What if the governing party agreed and decided to retroactively reduce them. How do you think that would go. I’ll wait.
Now do you get it? Hope that helps.
And just for the record, THEY DO NOT AVOID THE 53.53% because of a concept called integration which both parties with very smart finance ministers have tried to maintain since tax reform in 1971. The mileage with this one clearly varies. The corporate structure DELAYS the tax-one doesn’t AVOID it as you put it. Just like the gold plated pensions the Laurentian Elites have. In other words a dollar ends up the same in your pocket whether earned through a corporation or personally. That is why we have concepts like eligible and non eligible dividends(topic for another class). Not providing the 250k break to corporations that docs own fucks up that integration concept. There are smart people at finance that know this(at least there better be) but the politicos likely said, let’s leave it in so we can give it back. About on brand.
And just for the record, speaking of real estate, think they should go further and change some of the PRE ru]es. I literally brought it up during the Harper years. They were not put into place to make downtown Toronto, Vancouver and Montreal Liberal baby boomers rich with their multi million dollar homes and Muskoka, Banff and Laurentian cottages that increased in value massively thanks to Justin’s policies. All the while hiring people like me to preserve their OAS and even GIS with trusts, estates and corporations. Think about that for a minute. GIS. That is an easy fix. Just have a look through. I know things. And to reprint some of the ridiculous Tru-anons with the Katie Telford drafted messages all over X, all those folks should say the same thing about the PRE:
I am a physician(some of the Tru-Anons say professor) and I am married to a physician. We will never have to worry about paying off our mortgage, making car payments or affording food. If the changes in capital gains means we pay more tax so that social programs are more economically viable, we’re OK with that.
What say you Pedant?
Martin,
Bravo!
You are a physician *and*, apparently, a financial advisor?
In any case I agree that the PRE is grossly unfair to renters especially given that the housing market is propped up by the govt and the tax-free status is unlimited. If a lifetime PR exemption of, say, $500K per person were implemented with the amount above taxed at the regular capital gains rate it would be more reasonable. But I’m realistic on the chance of that ever occurring (little to none). One thing Poilievre might do is provide more TFSA room for renters so they have an opportunity to shelter some investment gains just as homeowners. Sabrina Maddeaux, former National Post columnist who is now running for the CPC and all but certain to win her 905 seat, raised this issue directly with Poilievre a year ago.
Where did I say I was a physician Pedant? I am an accountant that is just finishing up my 49th tax season and have attended the CICA In-Depth tax course. Senior partner at a reasonably large CPA firm(top 20 in the country when they used to track that sort of thing) that spends about half my time in tax. Again, please slow down when you are reading. The quote below is what the kiddies in the short pants fed to their supporters on X:
“And to reprint some of the ridiculous Tru-anons with the Katie Telford drafted messages all over X, all those folks should say the same thing about the PRE:
I am a physician(some of the Tru-Anons say professor) and I am married to a physician. We will never have to worry about paying off our mortgage, making car payments or affording food. If the changes in capital gains means we pay more tax so that social programs are more economically viable, we’re OK with that.”
The key punctuation mark up there would be the “:”.
Note the social media nonsense:
https://twitter.com/NyaPfanner/status/1782376934262833449/photo/1
And here are two from a former MP and doc and a “professor” who you would think would know better than to plagiarize and maybe come up with something original:
https://x.com/DougEyolfson/status/1781746840003596365
I can’t reproduce the one from the “professor” because she blocked me. Sho Jacobs and here is what she said:
“I am a professor and I am married to a professor. We will never have to worry about paying off our mortgage, making car payments or affording food.
If the changes in capital gains means we pay more tax so that social programs are more economically viable, we’re OK with that”
You have YET to respond to my main point about how this budget directly impacts the docs. In no world where we have a health care crisis is that right. That isn’t even a tax policy debate. I actually don’t give that much of a shit about the rest of the stuff. Been here done that, have the t-shirt, will do very well tax planning for folks and no one is going anywhere or changing anything. Although it is difficult to take the tax the wealthy seriously when they won’t go after the PRE. Laurentian Elites got to Laurentian Elite I guess. On that both parties seem to agree.
One more rant. Continually taking away certain benefits from the docs is EXACTLY the same as legislating a reduction to the gold plated pensions and/or salaries of federal civil servants. None, zero, nada. There is LITERALLY no difference. Both bad but no different. We can only hope that is going to be Pierre’s secret agenda.
They are going to change it. Unless they are REALLY REALLY stupid. So call it 50/50. Maybe better odds than Warren’s prediction about Justin leaving.
https://globalnews.ca/news/10435179/captial-gains-budget-2024-family-doctors/
Go after the docs while we have a shortage? FAFO.
If the Liberals want to drive their support among under-40 voters down to 10%, backtracking on a minimal increase in the tax rate on capital gains on asset sales would be a good way to do it. And as I mentioned in my comment above, I don’t think Poilievre will reverse it either. He certainly understands that the secular trend away from taxing income towards taxing wealth transcends political parties. Some real estate speculators might actually have to get a job, oh well.
Pedant, you are not following the bouncing ball. I realize I have typed out more than 2 or 3 paragraphs up there. There is a lot of that going on around social media. Folks talking past each other. ALL I AM TALKING ABOUT IS THE FACT THAT INCORPORATED DOCTORS ARE NOT GETTING THE 250K BREAK ON THE FIRST 250K THAT EVERYONE ELSE GETS.
Got it now?
And, of course Pierre needs to stay away from that(LIKE I SAID). But the docs are a pretty powerful lobby. We’ll see how it goes.
There’s certainly opportunity for the new inclusion rate to be tweaked to minimize the impacts on incorporated physicians that you describe. Doctors are obviously a more sympathetic and worthy group than real estate speculators. Your buddy who purchased rental properties when they cost one-tenth of their currently worth and who’s now whining about the new rules, however, can go pound sand. You mentioned he was previously NDP which surely means he enthusiastically supported unsustainably high net inward migration and laughed all the way to the bank as young Canadians were forced into a state of perpetual shelter insecurity.
Nice try Pendant, again, please follow the bouncing ball. Where did I say he was whining. He was just kind of surprised he is now considered rich. There were only supposed to be .13%-remember that lie? We both think it was kind of funny and will have a lot of laughs about it but at least he has finally come around as you seem to have with the incorporated physicians. So it looks like out of the two choices I outline below, you were just ignorant about the impact to physicians but admitting that sort of thing is the first step in healing!
And as far as tweaking it(all I am asking for if you were paying attention), that is a hard no so far from our dear leader. But now that you have seen the light, maybe you can add your voice to the folks asking for the tweak!
A guy who purchased two rental properties, and I presume a third property as his PR, in Canada long ago and held them during one of the biggest housing bubbles in the history of any Western country may not necessarily be rich (depends where those rentals are located) but he’s probably not far off. One can quibble about Freeland’s 0.13% claim, but anyone claiming net investment gains of over $250K in a single calendar year is a tiny elite subset of the population.
I find it amusing when people who purchased property for a can of soup 40 years ago, sat back and let successive governments and central bankers inflate its value 1000% in 4 decades and now sitting on millions, claim they aren’t wealthy.
Bet your NDP friend thought 30-year old STEM workers putting in 80-hour weeks for $120K taxed at 40% marginal rate were rich.
Wow-you have so many things wrong about this guy in his early fifties who scrimped and saved(what you refer to as “sitting” back) and made a lot of smart decisions while making 60k a year(half of that STEM worker who could have made the same decisions but I digress) that it is hilarious but looks like it is on brand based on a lot of the other uniformed nonsense you are spouting off about the LITERAL point I was making you have acknowledged you were wrong on. You sound bitter and jealous? So easy to say idiotic things behind a handle. And, guess what, my friend will be fine because he has a really good accountant, who, well, understands this stuff. And just for the record, my suggested fix is to TAKE AWAY the 250k from all of those rich real estate investors to maintain some integrity in the taxation system. And to claw back some of those gold plated pensions so we are all contributing. Oh and adjust the ridiculous PRE rules.
And Pedant defending Freeland! Didn’t see that on my bingo card this morning. She should have embraced her Liberalism and told the truth as to how many folks would be impacted. Will Justin be defended next? Maybe folks are right when they say that the parties are really indistinguishable.
And what was the average price to income ratio when your friend started speculating in RE? I suppose young Canadians should be derided for not building a time machine and warping space-time to shift their birth year back 20 or 30 years. Let’s tax their work even more for that failure.
I’m very interested to know who this NDPer thinks is rich if not those claiming $250K gain in a single year on an investment windfall.
That’s great you want the PRE scrapped. I’m on board. I doubt your friend is, though.
Again Pedant, you need to follow the bouncing ball and READ what I said rather than send ridiculous salvos across the bow that make little to no sense. He was surprised he was considered rich(and let me slow this down for you) AS DEFINED BY YOUR BUDDY FREELAND WHO SAID IT WOULD ONLY IMPACT .13 PER CENT OF THE POPULATION.
Got it now?
And just for the record, this situation was far from what you call “speculating” but I am sure you are not interested in those details. The actual fact of the matter was that there were specific personal reasons he actually got put in this position so spare me the characterization that he is some rich greedy landowner with his foot on the necks of the poor tenants like you describe that made twice the money he did but aren’t quite as smart with their money.
This is all a side issue anyway. Glad you are on board with MY MAIN POINT which was to convince you that, yes, physicians were hurt by this. All the rest is just conversation.
Oh, and again, you’re dead wrong on his position on the PRE because he indeed does still have a few leftie bones in his body. He will likely be all in favour of it. Since he is nowhere “rich” as you describe him, they will never change the rules so the exemption will go low enough to pick someone like him up. Never. I am talking about the truly rich-those Laurentian Elite type folks with the multi million dollar Rosedale homes and Muskoka cottages, many of whom are collecting OAS.
Was thinking about the view that LeBlanc is a HOAG. Maybe he is in private but(to me) he comes across as a smug, arrogant, know it all Liberal that talks down to the little people. I have been watching his performance in QP and that is definitively my take. He is no Chretien, Ford or Klein. Smug arrogance was/is just not part of their repertoire.
Oh…one more thing, there will be a lot of pre 25/6 selling done which will bring a lot of revenue in to the government but I am sure they will identify all of that as one time gains when they report on the deficit…said no one ever.
And that is a trap because of the minimum tax changes(one that I am sure was intentionally set). Folks need to get advice before they take any drastic steps.
One last rant. When one can’t even get a reasonably smart conservative on board with the fact that there are sometimes unintended consequences with budgets that should be fixed, how can someone ever convince a Tru-anon? Folks that don’t think doctors are hurt by this either are ignorant about the impact or are ok with the fact that we are clawing back some retirement savings from hard-working docs. Neither is flattering but there you go. Which are you Pedant?
A post by Warren made me think of this. Not sure if mentioned elsewhere but the fed thinks it is being “reasonable” by providing folks until 25/6 to make some very important financial decisions about their entire estate, bacially. But they really aren’t. The problem is that self-employed tax returns are due 15/6 and December corporate year ends are due 30/6 so it is going to be very difficult to find accountants with the time to properly help them. As usual, no one at finance knows how the real world works(a lot of that going on around here), unless they do and did this on purpose so people would make mistakes. Now I know that people like Pedant likely hope that these rich greedy people make mistakes and overpay their tax but that feeling is probably not universal, at least let’s hope not.
Martin,
I think that, at least on our side, people have shown both a willingness and a capacity to learn over the medium to long term. Those people need to be around Poilièvre. As for the leader, Pierre will question some of his assumptions and conclusions following your forceful and effective arguments, as displayed in your various comment exchanges with Pedant.
The FIRST thing he needs to do is bring back is the perfectly sensible(I mean no-brainer, critical) change they made when he was around the cabinet table. The increase in the age when you collect OAS(and go much much further-with proper planning, a couple can still get some when they are making 400k a year-THEY should be Pedant’s focus to help out that STEM worker working 80 hours a week and paying a 40% marginal rate, at least as much of a focus as my “rich” friend making 60k a year who made some very smart decisions and gave up a lot to get where he is-those elderly folks, well, just got elderly but I digress). No serious government(which this one isn’t) can say they are trying to help the young without that change. EVERYTHING we are talking about up there is petty cash compared to that necessary fix.
The funny thing is, of course, it was the young that voted in Justin when he literally had that change in their platform so perhaps they deserve their fate. We get the government we deserve and we certainly did this time. Maybe legalization of marijuana was more important and in their impaired state, they didn’t think this all through? Now the adults have to save them from themselves.
The second former alleged serious person Bill Morneau folded on his views on the OAS, I knew he had drank the kool-aid and I stopped taking him seriously.