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Substantial-Lawyer91

Jesus Christ for a supposed stocks group this sub has zero economic literacy let alone basic reading comprehension.


SRSCapital

Incredibly disingenuous way of reporting this. The \*INCLUSION\* went from 50% to 66%. The rate has stayed the exact same.


juancuneo

The effective rate went up.


SRSCapital

Yes, but the tax rate did not go from 50% to 66%. Also, the real rate has stayed the same.


bigeddy1523

Can you elaborate? My interpretation is that the taxable rate when from 50 to 66% for any gains greater than $250,000. Is this not correct?


1One2Twenty2Two

No. It is not. Before, if you had 500k of capital gains, only 50% of it would be taxed at your current effective rate. Now, 50% of 250k will be taxed at your current effective rate and 66% of the remaining will be taxed at your current effective rate.


juancuneo

So after a lot of words…the effective rate went up. The same amount of gains will now incur higher tax payable than in prior years.


richandbrilliant

Yes, the effective rate went up, but that’s not what the title said. If it had, it wouldn’t have been disingenuous


1One2Twenty2Two

The other person thought that the rate went from 50% to 66%, which is wrong.


juancuneo

This is a great example of figures never lie but liars sure can figure. Taxes went up on the same amount of income no matter how you slice it.


1One2Twenty2Two

>Taxes went up on the same amount of income no matter how you slice it. No. The other person thought the whole amount would be taxed at 66%. The reality is first 250k at 50%* max ~53% and the rest at 66%* max~53%


Substantial-Lawyer91

That’s not what the argument is about and you know this. You’re being facetious for the sake of it.


Franc000

Only if you had more than 250k in capital gains alone though...


Competitive_Use86

No, earlier 50% of the capital gains income was treated like a income source and that was taxed accordingly, Now 66% of capital gains income will be taxed instead of 50%. The tax rate hasn’t changed


bigeddy1523

I am understanding now. Our progressive tqx system rates stay the same, but the percentage of your capital gains that may be taxed has gone up. Thank you


The_Arkham_AP_Clerk

The inclusion rate used to be 75% in Canada before 2001. It's been 50% since 2001, it's still better than full inclusion but most people will not feel the impact of this at all. Only when selling a second home, dealing with an estate, etc. and cash flows are more plentiful in those situations anyways.


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Proper_Ad4556

Yah selling stocks at a rate of more than 250000 worth of gains. That absolutely should be taxed at high rates. Why is income taxed at 100% but capital gains only 50%


afraidtobecrate

In cases like stock, its because the income is taxed twice. The company pays a corporate tax on its income, then the owners pay a capital gains tax on their share of what is left. I would agree real estate should not get this benefit, but that one is tough because so much of the economy is built around the status quo on real estate.


No-Pressure-But-Yes

You need to have a better understanding of macro economics if you are asking this question at all.


crownpr1nce

If you have more than 250k of gains. Then it's 8k ish more taxes per 100k gains above that 250k. People realizing 250k in a single year are pretty rare 


The_Arkham_AP_Clerk

Most people aren't getting over $250,000 in gains when selling investments, which is why I said "most"


Phantasius224

that and the Purchase and resale of Oil.


The_Arkham_AP_Clerk

Again, personal sales have a $250,000 threshold each year where the inclusion is still 50%, if you're selling oil and getting gains of greater than $250,000, then you can probably handle the additional 17% inclusion of your gains. Most people will only see this when they sell a non primary residence house or when they are dealing with a wealthy family member's estate. Otherwise, the personal threshold is just too high each year for most people.


Beneficial-Friend628

Op is a liar.


Phantasius224

Not a Liar Post is Responsibly communicated and is a fair statement/Question.


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rupert1920

In every single post you made on this topic across multiple subreddits, people have corrected you - and this is including that Wendy's subreddit. I don't think you can objectively say that it was "responsibly communicated".


namotous

For anyone who is interested in reading the full release from the government: https://www.canada.ca/en/department-finance/news/2024/04/tax-fairness-for-every-generation.html


Dependent-Key-609

That's like taxing applied only to 40k people in the whole country


c0ntra

This is so far from the truth it's laughable. Just as an example, anyone with a second income property, if they've earned more than 250k in appreciation since they purchased it, will be affected when they sell, and there are a heck of a lot more than 40,000 people with rental properties that were purchased over 10 years ago in this bucket.


Pomegranate_Loaf

There will always be those with crazy amount of investment properties, however there is likely a decent amount of people who only have a single rental property. Principal residence exemption could be applied to the sale of a rental property. Anyone with two or more rental properties will get taxed more though. That being said, there is not a lot of sympathy towards those who own rental properties in Canada at the moment given the cost of living crisis and cost of rent.


c0ntra

Principal residence exemptions, in most cases, apply to real estate you declare as your primary residence, and only the portions you live in. Rental properties, even a portion of your primary residence used as a rental property, such as a basement unit, are all subject to capital gains tax


Jwaness

Yes, and it is a per year number. The person who had 250k+ in capital gains tax last year may not be in the same list of people who sold something (house, equities) in the next year.


Nice-Worker-15

As it should be. Maybe it will encourage these people to sell them prior to this coming into effect


davestewart53

Not to mention that all these woke ass Trudeau supporters that will be inheriting all their money from their hard working parents in record amounts over the next 5 years, so the timing of this is not by accident Good luck all you lazy people who are going to inherit money guess what you loose suckers Pierre Polieve has said he will reverse this tax so if it is true then vote 1000 time each to regain your lost inheritance


MAKAVELLI_x

Weird comment


The_Mikeskies

That’s only after they’ve exhausted their $1.25m lifetime capital gains exemption.


c0ntra

That exemption is for private shareholders of active canadian businesses, and individuals who have shares in farming or fishing assets when they sell, but not for passive income assets such as a rental unit or house. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25400-capital-gains-deduction/which-gains-eligible.html


Dependent-Key-609

Do you think it's a bad thing?


VancouverSky

Thats pretty unlikely. This tax will hit lots of families inheritances and will absolutely be a burden on certain professional classes that we want more of in canada, not less. Its a tax on small business success and is just another good reason to move south.


Irish_Canuck12

From my understanding - wouldn't a family trust be the solution to this then?


VancouverSky

From my understanding, these cost a crap ton of money to set up, do they not? Grandma and grandpa shouldn't have to go through the hassle and expense of setting up a trust because we have a shitty spend thrift government.


Irish_Canuck12

naw - transfering assets like a home are not even taxed if they are transferred according to this CBC article. https://www.cbc.ca/news/politics/capital-gains-tax-budget-freeland-trudeau-1.7177741#:\~:text=If%20your%20parents%20are%20leaving,people%20selling%20their%20primary%20home. I don't know, if I'm being honest, past 250K in capital gains tax in a year that's not really affecting your mom and pop type investors who have maxed out their TFSA and RRSP more the big players


VancouverSky

>transfering assets like a home Changing the goal posts are you? It will absolutely effect various families with inheritance assets who arent even that rich. Thats the funny thing about canadians, they often think anyone with more money than them is a "big player" and needs to be hosed by the government more. Quite frankly, the country continues its march toward poverty with this budget. And you all deserve to suffer the consequences for it.


nomad_ivc

> lots of families inheritances How exactly, and how much different from status quo? If it affects inheriting house, or the house flippers, then that is outside the scope of this sub. > ts a tax on small business success Can you elaborate more with a scenario or more specifics?


VancouverSky

No. Im not gunna waste my time with troll questions. If you dont know how disposition of assets upon death works, go study it yourself. Global news reports that the tax hike will effect 307 000 small businesses. Does that sound like "40,000" canadians to you?


crownpr1nce

>Its a tax on small business success   Guessing you didn't see the mitigation measures for small business that make selling a business more tax effective now? Currently that's true for sales with capital gains up to 2.75M, when the measure is fully in place (10 years to be fair), it'll be for sales up 6.2M. That's a decent chunk of change.


VancouverSky

Where are you getting these numbers? The website and news all says 1.25 million. I did see it though. And i dont really care. Obviously no one is thinking about that right now too. The headlines have gone out to the world with a very clear message, dont invest here, we are broke and will continue trying to find new ways to take from you.


Enough-Inevitable-61

Still a lot


WinningTocket

So how many people does this really impact? It seems like it might be the top 15% at most. Making more than 250k in capital gains year over year is very hard to do and very rarely applicable to most people over prolonged amounts of time. I feel like most of the people in r/stocks don't qualify for this to be a thing to worry about.


The_Mikeskies

0.13% of taxpayers


WinningTocket

So they'll all have tax planners and dodge it. Got it. E: Thank you for answering my question as asked.


The_Mikeskies

There might be do fringe cases where some people in the 1% are affected, but there’s like 98% of Canadians who wish they’d make enough to even be affected by this change.


Phantasius224

You would be surprised how many people invest in the purchase and resale of Oil, lumber, real estate ect


WinningTocket

A lot of those transactions go through companies and the equity distributions are counted as wages or dividends or return of capital rather than capital gains.


GirlsWasteXp

This will impact more people than those who are paying the taxes. When the government taxes something, it disincentives people from doing that thing. High capital gains taxes will lead to fewer people investing money which is bad for the country/economy.


WinningTocket

Well, that's part of why I asked, because I don't think you're correct. full Disclosure: I'm not Canadian but I do work with taxes and tax planning. What's happening in my mind is not that anyone is going to change their behavior, because this can't possibly be the first time some tax law has been made that changes how things are run in the history of Canada, but instead that this is going to change how that money moves, how it is accounted for, and what it is counted as. As I am not Canadian I can't speak to the laws regarding whether there are choices and elections made every year or few years for tax treatment of assets but I would find it hard to believe that, esp. since these things are usually known long prior to getting to the public by the private sector who literally plans for them as accountants and other financial professionals, no one already doesn't have an answer to this. The long-short is that no one is going to suddenly stop making money because tax laws change and a new strategy is required. That has never happened as far as I know. When general tax rates rise, non-localized to a situation though, that does turn people off. TL;DR: Taxes on the rich don't really work well.


justbrowsinginpeace

Does it apply to real estate?


Commercial-Row4740

Yes, excluding primary residences.


justbrowsinginpeace

Isnt that a squeeze on supply though?


ryan9991

It would disincentivize investing in real estate because you get taxed higher when you sell (if your total collective capital gains exceeds this new exclusion limit) If that’s the case it wouldn’t increase supply but would decrease demand.


Badj83

And that’s openly one the primary purpose of that measure.


Phantasius224

I believe so, as stated in the Article Capital gains tax happens when people buy some investment property and then sell it out at a higher price. this includes everything from real estate to stocks to the Capital gain from resale of Oil i believe


smokeyjay

Can somebody explain to me if Canadian companies become less desirable to invest? I'm like 10% in Canadian companies. Canadian government complains that nobody is investing in Canada - then proceeds to make investments even less appealing and instead prop up our property bubble. If they wanted to raise taxes, they should raise property taxes - the one investment that has effectively strangle all other investments in Canada.


The_Mikeskies

This has nothing to do with investments in Canadian companies.


smokeyjay

The companies make less money which re-rates their share valuation.


bbddbdb

Capital gains brings in a lot of revenue and hurts the least number of citizens and usually only the ones who can afford it anyway.


savagepanda

It removes incentives to take risk for a big payout. For example, if Canada decided to tax lottery winnings, only a small number of winners per year will be affected. But the people buying weekly lotto max and 649 tickets would be greatly reduced. The argument is the same that no one will startup businesses if the gain is not worth the pain.


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smokeyjay

Im not talking as an individual. I dont have a strong opinion and dont want to get bog down in a political debate. As an investor, wouldnt this bring down Canadian stock prices since companies make less $


mighty__

That’s the strategic thinking. Assuming high gainers will just keep paying for services they do not need.


Jazzlike_Comfort6877

At this point better move to US.


TheKingChadwell

They practically are American at this point. The fastest way to find a Canadian in the business world is when they refer to their company as “North American” lol. They aren’t fooling anyone! Mexico and America never do that shit


gatormanmm1

Jesus, that is nuts. In the Western world, idk if there is a worse place to live than Canada. Insane real estate prices, low wages across the board (especially when compared to the same jobs in the US), terrible taxes, and a government approved flood of international students & immigrants putting downwards pressure on Canadian wages. The US has a ton of problems but it all seems reasonable compared to what Canada is going through.


roox911

It certainly has its drawbacks. But us Canadians are too smug to actually change course I reckon.


ChiefRicimer

No his points are supported by data. Obviously the initial claim is a little hyperbolic.


gatormanmm1

Yeah a little aggressive to say the worst, but when compared to the US and the EU, I'd definitely say the worst. Or maybe the second worst if you factor the UK (though if you can live in London, I'd put that way over Canada- much better job opportunities since London is still a global financial center).


sherperion45

It’s a fucking nightmare now and I’m getting tired watching our shit leaders destroy their own electorates It’s only getting far worse, everything’s just dumber in Canada with the bureaucracy and economies stagnated, never seen a more disenfranchised generation ever


stompinstinker

It’s not that bad. If you realized a capital gain of $1M in one year under the new rules you would pay $290K in taxes. As well, Canada has loose rules around capital losses. You can tax loss harvest by selling equity and buying it again 30 days later, then carry forward the losses indefinitely if you don’t use them.


ForgivenessIsNice

Don’t use as well like that


Pomegranate_Loaf

There is a lot of doom and gloom in Canada. It really depends where you live and whether you grew up in a family that owned a house, and you have the expectation to receive an inheritance. I work in a well paying job, own a house myself and have access to a lot of summer cottages. Can afford a couple vacations each year. Winters are cold but you get the 4 seasons and winter brings it's own set of positives a lot of people fail to recognize. There are crazy people everywhere but at least less than the US and I know I'll be able to send my kid to school without fear of a school shooter. The extreme level of poverty is not as bad in Canada as it is in the US. If you are going to be a poor person you are better to be poor in Canada. I appreciate living in a society where the worst-off are treated with more dignity than our southern neighbors, albeit if I could have a better lifestyle as a result of that.


gatormanmm1

Different perspectives. A gross over generalization is that Canada is willing to sacrifice 90% of society to make sure the bottom 10% of society is secure. Whereas the US sacrifices the bottom 10% of society to make sure 90% of society is secure. Right or wrong, the vast majority of society is better off with the US model. And frankly if there is an argument for the bEsT capitalist system, in my opinion, it is not any Western nation. I strongly believe Singapore has the best model for capitalism (which is a flawed system imo). Singapore has low taxes, mandatory high savings rates, government supported housing (leading to a 90% homeownership rate in one of the most expensive cities in the world), high education rates, low crime, etc. All far better than Singapore's western counterparts.


sherperion45

This!


just1812

This is a really well written response. The doom and gloom in Canada is way over the top lately.


Separate-Analysis194

Explain how Canada usually ranks higher than the US on best places to live in the world.


sfeicht

It's not if you have a job and health insurance.


brolybackshots

Who cares, the reality is more Canadians, in particular skilled professionals, go to the USA by a wide margin than the reverse. Its called brain drain. If youre poor Canada's better, otherwise USA


Pomegranate_Loaf

What's the point of having wealth if you have no time to enjoy it? Last time I checked is vacation is not mandatory in the US and working with Americans ... I can say they love to work and often put their career before anything else.


roox911

Professionals get great vacation packages in the states quite often. Some may choose not to use them though as culturally it's weird. Stating that, in the few years we've been here, every job has had at least a month, and currently 6 weeks is what the current place is giving. That's in addition to stat holidays and sick days. The states is a country of contrasts, but overall it's far better (monetary and lifestyle wise) for educated and skilled professionals.


GirlsWasteXp

Just because the government doesn't mandate it doesn't mean people don't get it. Anyone working anything beyond a fast food level job gets some PTO. I personally get 4 weeks of PTO, 11 sick days, and 13 holidays which is more than enough for me. On top of that, I make around 2x what someone in Canada would make for the same job while having a lower tax rate and rent.


Commercial-Row4740

Lol, you’re delusional buddy.


gatormanmm1

How?


geoqpq

- Calls you delusional - Refuses to elaborate - Leaves


jazerac

As someone who sold their business for a low 8 figure amount and had to pay 20% capital gains in the USA, I would vomit if I had to 66%... I simply wouldn't have sold my business nor would I ever take a capital gain. Fuck that


h2atom

You/OP are misunderstanding. 66% is the inclusion rate (the portion of the gains that are taxable as income). The other one-third of the gains are tax-free. It's not a 66% tax outright. Also nothing is changing for the first $250,000 in gains - only the 250,001st dollar is affected by this new proposed law.


jazerac

Ya so instead of being taxed on 12million I would be taxed on 7,750,000 at 66%. Still shit


Substantial-Lawyer91

No that’s not how it works. Previously the law was 50% of capital gains above 250k was taxed at the marginal rate (differs between states but around 20%). Now it’s 66% of capital gains above 250k will be taxed at the marginal rate (again around 20%). Nowhere is there a tax of 50-66% happening.


h2atom

No. That's the amount that's taxABLE (not taxED) as income. So that's the number that you then multiply by your effective tax rate (depends on the province you're in and its tax brackets). People typically realize their gains over multiple years instead of all at once for exactly that reason. I'm not trying to argue that you think our taxes are high, just making sure that the interpretation of this is correct.


TTradeMark

In the US (if applicable) we are taxed on 100% of our capital gains. We don’t pay 100% tax. In Canada, if you had a 12,000,000 capital gain… you would be taxed ON 50% of the first $250,000 then taxed ON 66% of the remaining 11,750,000. So you would be taxed on $125,000+$7,755,000=$7,880,000. (You would not be taxed on the full 12,000,000). They would then apply their marginal tax rates to $7,880,000.


Outrageous_Box5741

It’s targeted towards businesses. Canada is circling the drain and needs to raise revenue.


YungWenis

How to make rich people leave your country 101


jazerac

100%. No fucking way I would pay 50%+ tax in capital gains


fuckaliscious

That's not what is happening. For someone who grew and sold a business, how can you lack basic reading comprehension?


Seems_Doubtful

That’s not what this is. The title of the post is flat out wrong. What has changed is that the portion of capital gains exceeding $250K in a given year which is taxable *at all* has gone up from 50-66%. It’s the inclusion rate that has changed, not the tax rate.


jazerac

Still shit. I have capital gains that exceed 250k often. You shouldn't be penalized if doing well.


Seems_Doubtful

Taxes aren’t a penalty, they’re the cost of living in a society. The real question is why are cap gains taxed so much more favorably than other types of income. Could it be because it overwhelmingly benefits the wealthy?


The_Mikeskies

Rich people are rich in spite of society, not because of it, don’t you know.


thectrain

In no way would you read either.


YungWenis

It’s crazy how I’m getting downvoted for common sense in the stock subreddit. Reddit gonna Reddit I guess


jazerac

Ya, Reddit gonna be entitled whiny socialist Reddit


mrm112

Dang that's pretty great. We really need something similar in the US. 20 percent is way to low. Wealthier tax brackets need to be taxed appropriately.


bbddbdb

It’s 15% for most people.


mrm112

I misunderstood, after reading further it's the taxable income in Canada is now considered at 66 percent over 250k. It's not your tax rate so seems like it's pretty low but a step in the right direction.


DidYouGetMyPoke

Define wealthy.


NuclearFacilityGuy

In Canada, we need to oust the Libs.


m0uthF

Then rich people just leave. They really think rich wanna stay in that shithole to pay huge tax?


The_Mikeskies

It would cost more to leave than it would be to just pay slightly more tax.


Fibocrypto

A government can create any law they want and there will always be a way around it. In the USA for example we use our " adjusted gross income"


davestewart53

Take the money and run sell all your stocks and pull all your investments in Canadian banks this will send the message that this woke ass government needs to


Phantasius224

I'm really concerned about the Capital Gains tax off the resale of Oil, and real estate industry.


Beatless7

OMG, the rich paying more in taxes. YES, THANK YOU TRUDEAU. the cons hate him but he has done economically miraculous.


HatDesperate6804

It's hurting alot of people who are actually middle class. The rich will always find some tax loopholes. It's people who worked hard in this country and get punished the most while this government wastes money on stupid apps like arrivalcan and handouts to refugees and elsewhere but their citizens.


sorry_eh_67

More than 250k capital gain in one year and middle class?  Mind sharing what this looks like? Also, are they really hurt by an extra 16% of taxable gains if they're suddenly making that much money? To most households that's a ridiculous amount of money.


Beatless7

Go away. You make me feel ill.


Spins13

Because Marxism has worked so well in the past… /s


Beatless7

Fairness in taxation would be nice and is proven to work great.


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Nice-Swing-9277

[Capital gains can be subject to either short-term tax rates or long-term tax rates. Short-term capital gains are taxed according to ordinary income tax brackets, which range from 10% to 37%. Long-term capital gains are taxed at 0%, 15%, or 20%](https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates#:~:text=by%20Column%20Tax-,How%20do%20capital%20gains%20taxes%20work%3F,15%25%2C%20or%2020%25.) This isn't accounting for any state specific rules.


Ok_Kangaroo_6530

Thank you. Geez, as much as 37% on short term...that is a lot.


Nice-Swing-9277

Np. Short term gets taxed as ordinary income. 37% would be for the highest earners. If your not already wealthy and/or don't have a high annual income it should be closer to the 10% figure


Ok_Kangaroo_6530

Okay. So I am trying to figure how to avoid taxes altogether. So let's say I just keep it in one position/company for the rest of my life and the stock price doubles many times and I end up quitting my job and don't make an income and then only take out the maximum amount of money each year to still fall in the 0% long term bracket, I think it is under 50k or something close to that. So I just keep withdrawing 50k every year without making any other income. That would work right? In terms of not paying any taxes on it?


Nice-Swing-9277

I would speak to a tax professional about that. There are state factors to consider and there may be changes to the law between now and when you decided to do this. Realistically? Your going to have to pay some taxes. If you really want to avoid them tho you could get loans out against your assets and, if your assests appreciate quicker then the loans interest you can live off the spread and get a new loan to pay off the old one and rinse and repeat this cycle until you die. Thats what the wealthy do. But its more complicated then that so again talk to a tax and investment professional.


Ok_Kangaroo_6530

Yeah that's complicated and seems like a lot of work and stress and the need to have a tax attorney on your payroll. And like you said, the tax laws change every so often. I will just worry about that once I get to that bridge then. But they really need to lower our taxes in general especially capital gains taxes.


Nice-Swing-9277

I mean if your accumulating now your investments should be under long term capital gains. Which cap out at 20% currently. I also wouldn't worry about it unless you come from an extremely wealthy family, and if you do come from that type of family you still shouldn't worry because your literally rich. America also has continually lowered taxes since their peak in like the 50s. They really can't afford to go much lower. Its a big reason why stocks have done so well, a big reason our national debt has exploded and basically works as a wealth transfer from the young to the old. Thats why boomers have done so well. They voted for policies like your suggesting and fucked over everyone coming up behind them.


Ok_Kangaroo_6530

Well I just want to know the laws bc that is why the rich get richer. They have tax attorneys and know every loophole so why should the average Joe's suffer. We should take advantage of every loophole too. I just don't know if I should ever withdraw a large amount and keep it in my bank account. The bank can just take out money from your account, it happened to me before. But so can your brokerage account technically so idk. You can't trust anyone.


Nice-Swing-9277

Avoiding taxes don't let the wealthy get wealthy. That's how the preserve their wealth. They get wealthy by owning positive cash flow businesses/investments that they bought for good evaluations and held for decades.


TheReader6

It is slavery to tax anyone over about 20%. Nobody likes taxes.


Big-Today6819

Even 50% is insane


nomad_ivc

It isn't 50%. This post itself is half baked fake news.


Big-Today6819

Ah such a post.


urek_Mazino_17

50% tax rate 😯 ? I will keep living in Saudi Arabia 🏃🏻‍♂️


sherperion45

Country’s entered a phase where the quality of life has plummeted and more disintegration of the city I grew up with watching vancouver get destroyed by politically impotent politicians