[MisterF]

Doug Ford is playing the old trick of using tax cuts to manufacture a budget crisis, and using that to justify cutting services. He says that services won't be cut because of his magical efficiencies, but we all know that's a lie. What he'll cut is a mystery, but given Doug's regressive, anti-urban stances in municipal politics, I can hazard a guess or two. The PC party still doesn't get that Ontarians want a modern day Bill Davis, not a discount Donald Trump.

Meanwhile Kathleen Wynne and Andrea Horwath seem content to continue with deficit spending for the foreseeable future. Pharmacare and a universal dental plan could very well be good ideas (I'm inclined to think they are) but we need to be able to pay for them. The solution isn't perpetual deficits. If they're too afraid to raise taxes then stop proposing new programs. With both parties battling for the same voters, they might just split the vote and hand Doug Ford a victory.

Meanwhile those of us who are socially liberal but like to see balanced budgets have no idea who to vote for. Two parties are racing left and the other one is making a hard right, with nobody going up the middle. I can't remember the last time I was this unsatisfied with my choices in an election.

 

[kEiThZ]

I tend to agree with that with non-capital spending - and same goes for tax cuts as well. Hell in fact I’d argue we should have a substantial estate tax.

AoD

Why an estate tax? I see no need to hit grieving kids or spouses with a large tax bill.

How about we simply raise the HST to what it is in other provinces? The Feds made fiscal room for the provinces. Ontario just has not had the cojones to take it up. We all know why.

Would also love to see all the provinces harmonize their HST rules....but that's a different discussion.

We need to boost the savings rate in this country. Increasing consumption taxes will help.

 

[AlvinofDiaspar]

Why an estate tax? I see no need to hit grieving kids or spouses with a large tax bill.
How about we simply raise the HST to what it is in other provinces? The Feds made fiscal room for the provinces. Ontario just has not had the cojones to take it up. We all know why.
Would also love to see all the provinces harmonize their HST rules....but that's a different discussion.
We need to boost the savings rate in this country. Increasing consumption taxes will help.

I don't mean an estate tax aimed at Joe Blow with a house as asset (clearly, we need an exemption) - but mainly at the multi-millionares. Call it a hunch - but I have a feeling it is a barrier to social mobility.

Nevermind the province - the Feds aren't exactly out of areas where they rightly should be spending on either (you know, nation building projects, for one).

AoD

 

[Northern Light]

I don't mean an estate tax aimed at Joe Blow with a house as asset (clearly, we need an exemption) - but mainly at the multi-millionares. Call it a hunch - but I have a feeling it is a barrier to social mobility.

Nevermind the province - the Feds aren't exactly out of areas where they rightly should be spending on either (you know, nation building projects, for one).

AoD

While I don't mind this idea........

It always struck me as having a couple of drawbacks.

The first is that it waits too long to redistribute gross excess. We could have a fun debate about what 'gross excess' is, but for the sake of getting near-universal agreement, personal wealth exceeding 1B.

If we agree that is really too much in the hands of one person, and could not possibly have been 'earned' in the true sense of the world, why wait till the person dies to shave it down a bit?

The second problem is that it is relatively easy to gift assets down to offspring in the decade or two preceding death, and avoid all or a large portion of the effect of any tax.

My personal inclination would to have a modest, but effective net wealth tax that applies every tax year on amounts over 'x'.

The challenge of course, is how to avoid people hiding/sheltering assets in tax havens etc. so as not to end-run such a system.

 

[Admiral Beez]

My personal inclination would to either provide a modest, but effective net wealth tax that applies every tax year on amounts over 'x'.

So, you're advocating for a maximum wage?

https://en.wikipedia.org/wiki/Maximum_wage

Can you imagine applying this to any other means of acquisition or property? If you're a farmer and you've been extraordinarily productive, and the government says there's a maximum allowable crop yield, after which the government will seize whatever you grow above this limit. Or land or property, the government says each person can only own so much land or property, and any excess will face seizure.

The whole point of a liberal economy is the pursuit of innovation, production, growth and wealth. Why would we want to limit this?

 

[kEiThZ]

A wealth tax.....

Ouch.

It'd be interesting to see how quickly assets and capital flee Canada.

As it stands I think the 2020s will all but be a write-off for Canada.

-Falling dollar driving inflation.
-Not much substantial innovation beyond an economy largely based on commodities and real estate.
-Cuts in government spending forced by today's deficits and rising interest rates.
-Boomers dramatically increasing the draw on government services.
-Very little investment in productivity enhancement as more and more spending goes to social services.

And a wealth tax on top of it?

I'm sure I'm not the only tech worker thinking of leaving Canada. For me, once my military career is done. But I think some people seem intent on turning that trickle into a flood.

 

[John_Dee]

Just like the Donald Trump administration?

Heh, heh. Well, Trump made some very specific promises while campaigning, which (of course) he had no intention of keeping. We're getting nothing from Thug except vague generalities (mixed in with the usual anti-taxes fanaticism), a sure sign that he's just spouting hot air.

It's very easy to sneer at the people who voted for Trump, but he was the first US politician in decades who'd made it that far who even pretended to give a damn about ordinary working people. Yes, he was obviously lying...but he had enough sense to lie about that, and people were desperate. What we're getting from Ford so far is the same tired crap we've heard a hundred times before. There's nothing new there at all.

 

[Admiral Beez]

sure I'm not the only tech worker thinking of leaving Canada. For me, once my military career is done. But I think some people seem intent on turning that trickle into a flood.

As a Brit, i'd be tempted to retire to a UK possessed tax haven. BVI looks nice, or Isle of Man. Some years to go to ponder....

 

[Northern Light]

Star reports that Wynne's government is proposing extending OHIP plus to Seniors.

ie. Removing the annual $100 deductible and co-pays.

The proposed effective date is August 1st, 2019.

While I support the idea, I'm increasingly perplexed about where this large deficit is going (ie. what is it funding, this year)

 

[Northern Light]

A wealth tax.....

Ouch.

It'd be interesting to see how quickly assets and capital flee Canada.

As it stands I think the 2020s will all but be a write-off for Canada.

-Falling dollar driving inflation.
-Not much substantial innovation beyond an economy largely based on commodities and real estate.
-Cuts in government spending forced by today's deficits and rising interest rates.
-Boomers dramatically increasing the draw on government services.
-Very little investment in productivity enhancement as more and more spending goes to social services.

And a wealth tax on top of it?

I'm sure I'm not the only tech worker thinking of leaving Canada. For me, once my military career is done. But I think some people seem intent on turning that trickle into a flood.

First off, I'm not proposing a maximum wage, nor a cap on property acquisition.

Second, you know this was already done, in Germany, many years ago, and there was no massive capital flight.

It was rescinded, however, after a German court decision decided that the total amount of tax collected from someone (based on income and assets) could not exceed 50% of their annual income.

At that time, the consensus was the tax was no longer worth the trouble.

The notion is no different than an estate tax, except applying when your alive; applying it only exceedingly high amounts and at very low percentages, and the tax only applies to the 'excess' portion of assets.

It is fair to suggest, however, that this is type of tax best applied when there is global agreement to do so, such that there are no 'tax havens'.

The same issue already applies to income tax and corporate tax, and much evasion already occurs, in the case of business, even when rates are at historic lows.

The argument that capital may flee, taken to its logical extreme would require abolition of all taxes.

I would argue instead for abolition the evasion of them, then lower the marginal rates and/or increasing basic exception levels.

 

[Northern Light]

PS, if you set the entry threshold for such a tax at 1B there are only 100 individuals or families in that group. That's the 0.0001%

 

[Admiral Beez]

Star reports that Wynne's government is proposing extending OHIP plus to Seniors.

Every proposal should come with a source for the funding.

If it's an ongoing program like OHIP instead of a capital project or one time purchase (new subways, warships, etc), it MUST not be funded through deficit funding.

Second, you know this was already done, in Germany, many years ago, and there was no massive capital flight.

This is an odd accusation.

Why do you assume kEiThZ knows German tax code and its impact?

 

[Northern Light]

Every proposal should come with a source for the funding.

If it's an ongoing program like OHIP instead of a capital project or one time purchase (new subways, warships, etc), it MUST not be funded through deficit funding.This is an odd accusation.

Why do you assume kEiThZ knows German tax code and its impact?

It wasn't an 'accusation' LOL. That sounds far too harsh.

It a raised eyebrow and note in response to a fairly alarmist sounding statement about the impact of such a tax.

I would give credit where its due and assume anyone making an alarmist sounding statement about anything would do their research before posting.

KeithZ is obviously a bright guy (no sarcasm); so I might have expected more restraint in his post.

 

[kEiThZ]

As a Brit, i'd be tempted to retire to a UK possessed tax haven. BVI looks nice, or Isle of Man. Some years to go to ponder....

The Brits just committed economic self-harm if not suicide with Brexit.

When passporting ends, London will lose its status as the world's second financial centre. And with that, the UK will become just another G8 country. They'll go off to being another major economy....another Canada if you will.

KeithZ is obviously a bright guy (no sarcasm);

Bright? No. Engaged, perhaps....

so I might have expected more restraint in his post.

I see the headwinds on the horizon and call them as is. I don't think most Canadians realize how backwards the country is economically. And the real estate bubble and commodities supercycle has allowed this country to escape a lot of the pain that comes with protectionism, poor productivity gains, etc. However, none of that is sustainable in the least. And the bill will come due next decade.

So it's worrisome, that aside from not recognizing the problems we face, people think taxes that actually attack base capital are the solution. Investors are already somewhat skittish about Canada. And the only thing investors will fund in this country are commodities and real estate. What do you think the reaction to a wealth tax would be, when you tell investors that you want to tax money sitting in a bank account?

At least, Alvin's estate tax proposal has some merit on reducing intra-generational disparities by regulating inter-generational transfers. It doesn't impair anyone while they are actually alive. But a wealth tax actually attacks base capital. I fail to see why any investor should take up in Canada if this is implemented.

Put yourself in the shoes of an investor. Particularly one not trading in commodities or real estate. The government is now going to tax money that's just sitting in a bank account. How would you react?

I know what I'd do. I can't trust the government that once this tax is implemented it won't increase. So I'd move as much of my wealth offshore as I could. And if I could get away with it, I'd even move my business out of Canada. Or at least as many of the assets as I could. Register the intellectual property in the US. Run all my foreign contracts through a foreign (probably US) numbered company. Etc.

Not a business person? Just a rich guy/gal? Well, don't plan on retiring in Canada. Open a bank account in a tax haven and take a suitcase of cash with you when you travel there for your annual deposit vacation.

It's great if it works for the Germans. I'm not sure that necessarily translates into working for Canada. Taxing income and consumption works. Let's stick to that.

 

[kEiThZ]

PS, if you set the entry threshold for such a tax at 1B there are only 100 individuals or families in that group. That's the 0.0001%

Why anybody would take the government's word on tax increases being limited indefinitely is beyond me. It's always easier to raise taxes that implement new taxes. Why would the government not increase the rate or increase the scope once the tax in place and if they need revenue?

Today 100 individuals. Tomorrow? 1000 individuals.

And if I was anywhere in the 10 000 to 100 000 individuals behind those top 100, I'd be screaming at my attorneys and accountants to plan avoidance immediately.