The rich guy

BEAR

Our hot new prime minister says when Parliament resumes this week that slashing middle class taxes will be job one.

So, mirabile dictu, most working grunts think they’ll be paying less and getting more. It’s the change-hope thingy. Fortunately you have this blog to disabuse you of such things. Let’s begin, shall we?

First, the tax cut primarily affects those earning between $45,000 and $89,000 and for them (the folks at the top end of this range) the savings equal less than $13 a week. The average will be about eight bucks. However, 66% of Canadians who file tax returns earn less than forty-five grand, so no tax cut for them.

That leaves nine million people who will get those few extra dollars a week. Meanwhile everybody believes the rich – the top 1% of us – will be reamed. And they like that. The prime minister made a big deal of this on the campaign trail, saying people who already give up close to half their incomes, “should pay their fair share” – which to those on the left means paying more.

So how many rich guys are we talking about?

The new top tax bracket will click in at a taxable income of $217,000 (the existing 29% rate travels to 33%), and this will affect just 264,000 taxpayers, or 0.75% of citizens. The Libs claimed this would raise $2.6 billion in net new revenues, which works out to an average of almost $11,000 per rich guy in additional tax. This, logic tells us, is ridiculous.

In order to save eleven grand in taxes, all a rich guy need do in 2016 is max out his RRSP contribution, since there is $25,370 in new room available – which will net a refund greater than the additional tax burden. Of course, if the rich guy is a doctor (about a third are), then by putting his or her spouse and kids on the medical professional corporation payroll he can slice his taxable income. Or convert from salary to dividends. Meanwhile entrepreneurs can establish a holding company and flow up cash flow from the Opco without tax being triggered, then bring it home through a family trust or dividends, making use of the dividend tax credit.

Of course, a rich guy with a fancy accountant can also use flow-through shares and garner tax-saving investment credits. He can establish an Individual Pension Plan (IPP) or a Retirement Compensation Agreement (RCA) to actually salt more pension money away than RRSP rules allow. And he can earn unlimited income in the form of capital gains from investment portfolios, and reduce the tax rate by 50%.

In short, there’s no way the addition of the new tax bracket will raise $2.8 billion for the new government to spend (last week the hot one committed $2.6 billion more to developing countries in the name of climate change). And if you’re one of the chosen 264,000 people now in the crosshairs, I trust you’ll be giving serious consideration to the above strategies, plus a whole lot more.

Craig Alexander is a smart, reasonable fellow who impressed me when he was a big cheese economist at TD Bank. These days he’s helping run the CD Howe Institute, and his conclusion is that by increasing rich guy taxes Ottawa will actually erode the overall tax base – a phenon many other jurisdictions have seen develop. The extra tax burden will trigger more tax avoidance activity and result in the 240,000 people reporting about 5% less in taxable income than they do now. That will strip $7.3 billion from the tax base, and the Libs will end up with 70% less than they claimed. Worse, this decline in the tax base will cost the provinces about $1.4 billion in revenue.

Well, so much for the rich paying for a tax cut for the middle class – which is now down to 33% of the population. But there’s more. According to Alexander, here’s an actual danger of trying to soak the successful:

“The reduction in tax rates for middle-income households is desirable, but the heavy taxation ?of high-income Canadians is at odds with the desire for more entrepreneurial activity. Canada is in an international war for talent. Canada needs competitive tax rates for high-income earners, or we run the risk of a brain drain and the risk of being less able to attract foreign talent. Excessively taxing the talent that fuels a more innovative, creative and successful economy is ultimately self-defeating.”

Meanwhile there are other costs to paying for the eight bucks a week a third of taxpayers will save. The TFSA contribution limit will be slashed from $10,000 to just $5,500. Income-splitting is being erased, so couples with a stay-at-home parent will be impacted. And contributions to the public pension plan will, says the prime minister, be increased as part of reform. The estimate is by about a thousand dollars a year. BTW, the CBC has reported our wealthy PM has put two personal nannies on the government payroll. They’re with him in Paris this week.

You may or may not agree with what’s coming later in a few days. But you should at least know the context. If you’re a .75%er, then 2016 will be the year you get serious about tax avoidance. Lucky for you, it’s easy.

238 comments ↓

#1 Chris on 11.30.15 at 4:57 pm

Oh Puh-leeze – do you really think all of these doctors, lawyers and entrepreneurs hadn’t thought to use any of these tax reduction methods before?? You make it sound like this increase will be so insanely high that everyone who makes over 220 k per year is going to pack up and move to the Bermuda. No, most of these guys probably already use all these methods, and probably use them to maximum advantage. If they hadn’t thought of it before, they aren’t likely to suddenly see the light. More importantly though, instead of just complaining about what the current government got voted in to do, what would you do that would be so much better? If you have a solution, that would be interesting reading. This, not so much.

#2 tew on 11.30.15 at 5:01 pm

FIRST!

#3 noel on 11.30.15 at 5:02 pm

The Liberal gov’t will crackdown on sole practitioners pretending to be small businesses to avoid taxes. This was in their election platform. I’ll give you the benefit of the doubt that you didn’t know this and didn’t willfully omit it to push an agenda.

Won’t change a thing. — Garth

#4 Mark on 11.30.15 at 5:05 pm

If the Tory economic policy of the past decade actually worked as intended, why did the Tories have to run deficits averaging $25B/year? In a record interest rate environment no less.

I have little confidence Trudeau will be able to stick to his “$10B deficits” promise, but the Harper record was abysmal in comparison. Not even counting all of the contingent liabilities accumulated at the CMHC which are certain to at least partially morph into actual liabilities going forward.

Answer: 2008-9. — Garth

#5 Future Expatiate on 11.30.15 at 5:06 pm

Hey, when you get tired of Trudeau?

Send him to the US. We need tax rates on the rich back up to 50%+ with no loopholes. Gave us the middle class.

#6 KingBubbles on 11.30.15 at 5:06 pm

:-)

#7 ApplePi on 11.30.15 at 5:07 pm

Well, it will be interesting, nonetheless, to watch it unfold. While the wealthy have more avenues to cut taxes, the more that do the more avenues will be shut down.

In desperate times, don’t you think things like the dividend tax credit ( in part or in whole ) will go away?

#8 ApplePi on 11.30.15 at 5:10 pm

What a lot of people don’t realize is that the group between $89,000 and $217,000 benefit the most from having tax lowered for the $45-$89 bracket.

They get the entire $13 / week. That’s the class that JT is helping most… but politically, it’s the $45-89 that think they’re the favoured ones.

#9 BobC on 11.30.15 at 5:17 pm

Like my grandma said, “They only way to teach a liberal is to give him everything he wants.”

#10 Greg on 11.30.15 at 5:20 pm

Early today Garth. I was just contemplating working harder to get a promotion, but the taxes above $125,000 aren’t worth it, with the hot one, and Rachel at the controls. So I got a coffee and read your blog instead.

#11 IHCTD9 on 11.30.15 at 5:23 pm

The Laffer Curve in action, taxes go up, tax revenues go down.

Not to mention guys like me who are just middle class are also making changes as well. I’m sending a lot of my investment dollars outside Canada, going from 3 to 2 vehicles, dumping more into RRSP’s, going “alternative” (no tax at all as it’s not classified as a fuel) for heat, reducing consumption, buying used off Kijiji – and more.

If there are thousands more just like me, then being spooked by the feds will not only reduce Federal revenue, but Provincial revenue as well.

#12 Sean on 11.30.15 at 5:24 pm

“First, the tax cut affects only those earning between $45,000 and $89,000”

Because it’s a cut to a bracket, it also effects everyone making over $89,000, cancelled out somewhere over 200K by the new higher bracket.

As I noted. — Garth

#13 Retired Boomer WI on 11.30.15 at 5:24 pm

All depends on WHOSE OX is being gored.

When mom & I were working, we grossed about $125,000 that final year of work. Hmmm… that is the 25% tax bracket left by itself.

So, one choice: CAN I shield ‘enough’ to get into the 15% tax bracket?

Well, we’re gonna give this bitch a try. I’m putting 15% into my 401-K (your RRSP), she put in 31% in here.
No, not quite… we owed 25% TAX on something like $4,400 of income.

Anyway, we almost made it due to other crap Amerikan’s are allowed to deduct off of income, like property taxes, health insurance premiums, sales taxes, yada yada.

You have to ‘get over’ the standard married deductions first, which is $13,000 in order to do what here is known as ‘itemizing.’ If you have a fat mortgage you can write off the interest if you itemize. We had no mortgage at that time.

BUT, because I put away 15% and she 31% of income pre-tax that money was off the income (25%) right then.

Since the dam thing has grown in the years since, and will now come out at the 15% level I still feel vindicated.
Oh we even both funded a ROTH that year (your TFSA) for $12,000 for both.

It will be interesting to see whose OX gets gored in the North. My bet it will everybody’s OX, politicians can get so DAM irritating when they start to think in a cluster.

#14 Sheane Wallace on 11.30.15 at 5:31 pm

Canada is NOT in an international war for talent, it is in international war for suckers.No talent will come here for the pay, based on our ‘nice’ weather and the ‘low’ taxes.

#15 Julia on 11.30.15 at 5:33 pm

I had missed that they were increasing the RRSP contribution room. Great. Give more tax free growth to high income earners and take away TSFA room from the little guy. How does that support the middle class?

#16 jess on 11.30.15 at 5:33 pm

sounds so hooverish?

The retail giant is Always watching.
By Susan Berfield | November 24, 2015

From Bloomberg Businessweek
http://www.bloomberg.com/features/2015-walmart-union-surveillance/

http://www.commondreams.org/news/2015/11/25/mind-blowing-abuse-power-walmart-spied-workers-fbi-lockheed-martins-help

=

RBC loses Delaware Supreme Court M&A case

http://www.ft.com/intl/cms/s/0/ec8c8a3e-978f-11e5-9228-87e603d47bdc.html#axzz3t0qmpXDU

#17 Sheane Wallace on 11.30.15 at 5:37 pm

#3 noel

They will be destroyed by law suits and litigations. Proving that a doctor is not a corporation or that his /her spouse does not help or qualify the degree of help? Good luck with that. Some CEOs have salary of one dollar. Is that tax avoidance?

Modern countries like Germany have family tax vs. personal taxes, we know that we are brain-frozen in time but is in not time to introduce it here as well?
In Germany If i make 100 k euro and I am single I take home less than 50 k, if I have family it goes up to 75 k.

#18 ben on 11.30.15 at 5:38 pm

11,000*264000=2 904 000 000

so did you mean 2.9 billion?

As stated. — Garth

#19 Sheane Wallace on 11.30.15 at 5:40 pm

#3 noel

BTW, if revenue Canada comes after you for salary distributions in a corporation you can refile and take dividends which will actually result in lower taxes.

Everything is arguable and no government can force taxation, taking away any flexibility, they could try but will surely fail. If they go after the doctors they are gone.

#20 Randy Randerson on 11.30.15 at 5:57 pm

Not to mention for the high income earners with a CCPC, by taking money out of it via dividend instead of salary, you can avoid paying CPP. Best part is, you can avoid paying both the employer and employee portion. For the win!

#21 Randy Randerson on 11.30.15 at 5:59 pm

#3 noel on 11.30.15 at 5:02 pm

The Liberal gov’t will crackdown on sole practitioners pretending to be small businesses to avoid taxes. This was in their election platform. I’ll give you the benefit of the doubt that you didn’t know this and didn’t willfully omit it to push an agenda.

Won’t change a thing. — Garth
———————–

Can’t the Lib pull the same stunt as Quebec? Declaring anyone with less than 3 employees to not qualify for the Small Business Deduction?

#22 Kaganovich on 11.30.15 at 6:01 pm

Talent, creativity, and entrepreneurial spirit. Sure. But I wouldn’t conflate those elements with credentials, or unharnessed homo economicus rationale. I’m sure many Cuban doctors would’ve happy to come up and provide medical care for less than it costs right now.

#23 doctorevil on 11.30.15 at 6:01 pm

I actually think there is truth to Garth’s point. I am an evil doctor. I set myself up with a corporation and some income splitting after graduating from evil medical school, but honestly have not optimized all of the tax minimization strategies since then. I just didn’t think it worth the effort and didn’t really mind the concept of paying my fair share. However, with the Ontario Liberals and now the Federal Liberals I feel like I am being targetted since I am a politically expedient source of money for them. It has become a matter of principle for me to fight back. As a result, I have over the past couple of weeks been revisiting my financial set-up as Garth suggests (thank you Garth for some ideas). So, #1 Chris – you are right that doctors and the high earning professionals won’t leave since they have roots. However, they will be darn sure to be tax efficient (my friends are doing the same as me). Also, what does happen is those starting out who don’t have their roots down yet go elsewhere to set up. It takes 5-10 years to actually see that effect. I remember seeing it in the 1990s and it took until the early 2000s to hit a peak.

#24 Conspiratard on 11.30.15 at 6:02 pm

Just as the illuminati are craftily distracting the world’s attention with climate bullcrap in Paris, the true threat reveals itself in China.

Specialized levitating drones are on their way from China, soon to destroy the West.

Coincidence? I think not.

I think not.

https://www.youtube.com/watch?v=HY8lChNq8Go

#25 JTull on 11.30.15 at 6:03 pm

All this post really tells us is what we already know: that there are a gazillion ways for rich(ish) folks to avoid paying tax (quelle surprise!) since wages, the only income most of us plebes have, are taxed at higher rates than dividends, capital gains, etc.

If you think that’s fair (I assume GT does) so be it. If you don’t, then change the laws. But don’t worry 1%ers, that would be way too radical for the Trudeaus, Notleys, Mulcairs, et al. These people are liberals, not socialists (quel dommage!).

#26 CRA guy on 11.30.15 at 6:04 pm

@ Sheane Wallace: Lol. Don’t you know that with CRA, YOU need to “prove” stuff to THEM, not the other way around??

Too funny…..

#27 BlackDog on 11.30.15 at 6:09 pm

Wow. Awesome picture.

Bear: “Seriously?”

Baby: “Yep. We are bigger and stronger. But we thinks you are cool, so we keeps you here.”

#28 Steven Harp the hERald sings on 11.30.15 at 6:09 pm

You wanted change you got change. Now shut up and suck it up.
LMFAO.

#29 Doug t on 11.30.15 at 6:10 pm

Death and taxes – same old same old. Now just be thankful you don’t live in Turkey or worse Saudi Arabia

#30 Kev on 11.30.15 at 6:10 pm

“The prime minister made a big deal of this on the campaign trail, saying people who already give up close to half their incomes, “should pay their fair share” – which to those on the left means paying more.”

I don’t disagree with your sentiments on this blog post in general Garth, but it’s not like anyone is paying close to half their income in taxes. I make in the mid 100’s and my average tax rate has never been above 25%.

Folks making $300,000 have an average tax rate of over 40% and a marginal rate of 49.3%. Close enough. — Garth

#31 Freedom First on 11.30.15 at 6:10 pm

I think the rich guy will be okay. If he can stay out of our divorce courts. I never had kids and I live alone, but many many men I have known have not been so fortunate. Tough lesson. Odds are 50/50. Too high risk for me. I am okay with that. I am blessed.

#32 X on 11.30.15 at 6:12 pm

What you mention about tax avoidance rings true. You didn’t even mention the Canada Child Benefit. When my wife returns to work, we will receive less than we did with the new scaled back Canada Child Benefit.

We pay more into the gov’t pocket than the average earner, dollar for dollar, yet get less out of the system in this regard. I don’t begrudge paying more overall in taxes, but aren’t we entitled to just as much as anyone else in return….

What next, I have to pay more for for a parking ticket than the next guy….

#33 Ex-Cowtown on 11.30.15 at 6:13 pm

#202 Smoking Man on 11.30.15 at 2:31 pm

#197 Bottoms_Up on 11.30.15 at 1:52 pm
#157 Ex-Cowtown on 11.30.15 at 1:02 am
—————————–
Yet, you rarely post a link to your “science”, and when you do it is complete bunk. Look up the Nasa temoerature charts and you will see that you are wrong.

You also fail to mention the FACT the earth surface temperature has risen close to 1 degree in 100 years.
……………………….

Nice try, you aren’t the real Smoking Man. You’re spelling is too good and you’re not borderline narcoleptic.

But here’s one for you anyway:

http://www.breitbart.com/big-government/2015/11/30/twelve-reasons-paris-climate-talks-total-waste/

and another (more sciency):

http://wattsupwiththat.com/2015/11/27/increased-carbon-dioxide-enhances-plankton-growth-opposite-of-what-was-expected/

This one shows you that nature has CO2 buffering methods that the “climate scientists” were not aware of. If your computer models don’t take buffered systems into account, they are pure bovine schizzen.

#34 Old Man Too on 11.30.15 at 6:13 pm

How am I supposed to become a 1%er if they keep raising my taxes?

#35 Dominoes Lining Up on 11.30.15 at 6:15 pm

A long expected domino appears to be now beginning to tip over, as Garth has been suggesting for a while.

Poverty among seniors. A soon-to-be major catalyst for property sales, some of them distress sales. This report out today shows food bank use by seniors is way up. It’s 35% up. And climbing.

Even though most food bank users are not home owners, those that are will most certainly be looking soon, if not already, at selling their properties. As this study shows, with 1 in 3 jobs being precarious now, this trend will only accelerate going forward.

http://www.cbc.ca/news/canada/toronto/food-banks-ontario-1.3342191

#36 leslie on 11.30.15 at 6:15 pm

Yea..interesting…why does accounting and tax require so much trouble / loopholes…can’t we just say..income and a tax on that…enough of the crazy accounting / financial / etc…it obviously doesn’t benefit anyone working at a wage under 150k
only the rich who has time and resources to figure all these out…so why are these rules out there? Stop playing games, it is getting too obvious rich people made the rules lol

#37 Keith on 11.30.15 at 6:18 pm

Let someone with more intelligence, more knowledge of taxation, more net worth speak otherwise, and I’ll start to listen. Stop focussing on “scaring” the rich away. Canada has lots to offer.

“I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain,” Buffett wrote in his column. “People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”

Potential taxes have never scared them off. Which is why rich people live in every western nation.

#38 Harbour on 11.30.15 at 6:24 pm

O’Leary trashed Canadian real estate on BNN today… fu%# it was good!!

He went on and on… why would you want to spend 400K on a box that costs you huge amount of commission in and out, huge up keep, etc etc…

Real estate isn’t going anywhere for the next 5 years, etc, etc…

I wish I could find the video… lol

#39 Frank on 11.30.15 at 6:27 pm

All I hear are ‘tax rich people more’ or ‘no, they’ll leave’ but never counter proposals.

Are the current brackets perfect? If not what does all this analysis say is the best?

#40 Cowboy Robot on 11.30.15 at 6:29 pm

“we run the risk of a brain drain and the risk of being less able to attract foreign talent. ”

-Already happening friend….the planes going south…especially to booming Texas…you can’t get a seat. Every plane is filled with the best and the brightest flooding out of Canada for a better life…low taxation, cheap consumer goods…like clothes cars and houses, cool lifestyle…music scene…free museums and galleries…style…beaches…great roads….damned pretty girls….$5 dollar steaks and BBQ every day.

Irving..for ex…is a sea of head office towers….more businesses than Vancouver has condo towers. Like sports? You can put all of Canada’s pro stadiums under roof of Cowboy Stadium and room left for Winnepeg. It’s the size of a planet. Mavericks…Rangers…Stars…Long Horns….better high football games with stadiums better than any pro stadium we’ve got…18000 ++ capacity.

My new Camaro Convertible is $19,995 in Dallas…here $42,000….and gas is $2 bucks…..cheap insurance too. 500 sq ft house in great area…$300,000…average house in average area…$80,000…can be less.

Great open markets…lots to do every weekend….doesn’t anything to mingle or listen to the free concerts almost everywhere all the time.

You can say what you want about Canada….and you can put your boots in the oven and call them bisquits…but the truth is that if you’re young and want a better life…get out of Canada fool. TN Visa are easy for anyone with a 4 year degree or virtually any skill. Never mentioned that wages are 50% higher south of the border.

#41 Cowboy Robot on 11.30.15 at 6:31 pm

Sorry…5000 sq ft houses are $300,000 ..look anywhere on Zilliow around ‘the Metroplex’.

#42 Muttley O'Toole on 11.30.15 at 6:33 pm

#1 Chris . . . ” what would you do that would be so much better? ”
EasyPeasy – Cut spending; start with foreign aid,no handouts for climate fraud, reduce refugee intake (spend some money saved teaching them in their own countries how to catch a fish),and the ‘beat’ goes on.

#43 Apocalypse2015 on 11.30.15 at 6:35 pm

News from the last hour:

U.S. expects “imminent” attack in Afghanistan.

Russia implements immediate “missile defence” system in Syria.

ISIS will be more than happy to take credit for starting a world war.

http://www.cnn.com

Stay tuned…….

#44 JSS on 11.30.15 at 6:36 pm

8 bucks is still 8 bucks

#45 BC Guy on 11.30.15 at 6:36 pm

You 1%ers are hilarious. You outsource our jobs, give yourselves bonuses, come up with all manner of tax avoidance schemes – some legal, some not, then you try to convince the average Joe bag of donuts that there’s no use in changing tax rates or tax policy. It won’t make any difference, you say: just keep your nose to the grindstone, STFU and let us keep getting richer.

In other news … “Expect influx of foreign workers and professionals if TPP is approved”:

http://www.cbc.ca/news/politics/more-foreign-workers-tpp-1.3338189

In other words, large corps will soon be able to bring in even more cheap labour (including professionals) from third world countries and replace you. Welcome to the minimum wage world.

#46 Harbour on 11.30.15 at 6:40 pm

O’Leary: You’d be an idiot to buy a house

http://www.bnn.ca/Video/player.aspx?vid=760243

#47 joblo on 11.30.15 at 6:41 pm

So Garth, how can I avoid the coming Carbon Tax, Texting tax, Selfie tax and any other grab on the horizon?

#48 JB on 11.30.15 at 6:42 pm

We are a one income family in the tax bracket slated to “save money,” and yet we will be losing out big time since income splitting is gone.

Here’s the irony in this, Garth. According to Trudeau (and the media), income splitting needs to go because it only benefits a select few (15% of Canadians), and yet somehow this new tax structure that benefits even fewer Canadians is not a tax cut for a select few.

#49 BlackDog on 11.30.15 at 6:43 pm

@X, #32, Quit your bitchin. Just be glad you are not a Canadian with a US birth place. Try marrying US tax laws on top Canadian tax laws, then you will know what true tax hell is.

#50 Jaymo on 11.30.15 at 6:47 pm

Typical Liberal national economic policy for the muddling classes. Yes we will give you your promised tax break with our right hand then shaft you big time – carbon tax, increased CPP contributions, carbon tax, increased EI contributions, more carbon taxes, cap and trade, then more carbon taxes – with our left. Enjoy the decline.

#51 BC Guy on 11.30.15 at 6:48 pm

Number of millennials living with parents climbs to 7-decade high.

“… the labor market that, far from being a “robust” creator of breadwinner jobs, actually churns out bartenders and waiters. The sad thing is, between lackluster wage growth, crippling student debt, and bad decision making when it comes to picking a college major, some millennials are finding out that serving drinks is a far better way to make ends meet than taking a full-time job for a meager salary that all but guarantees you a spot among America’s growing peasantry.”

“http://www.zerohedge.com/news/2015-11-30/number-millennials-living-parents-basement-climbs-again-weddings-blamed-again

#52 Victor V on 11.30.15 at 6:50 pm

Oil at US$35 would send Canadian home prices tumbling 26%, CMHC says

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/oil-at-us35-would-send-canadian-home-prices-tumbling-26-cmhc-says&pubdate=2015-11-30

#53 Simplyput7 on 11.30.15 at 6:52 pm

Does anybody know if the tax credit for donations over $200 will increase to 33%?

http://business.financialpost.com/personal-finance/what-trudeaus-change-to-the-top-tax-rate-might-mean-for-charitable-donation-credits

#54 saskatoon on 11.30.15 at 7:02 pm

simple:

just don’t surrender any tax, like this dude:

https://www.youtube.com/watch?v=D9CwtyhBY2M

#55 saskatoon on 11.30.15 at 7:07 pm

or…

go full sovereign, like this dude:

https://www.youtube.com/watch?v=uliLfykURYo

#56 I look like a surgeon on 11.30.15 at 7:07 pm

Great points O master Garth re keeping more of our hard earned money. Just so you know:

1) for the past several years, greater than 50% of graduating doctors are women who have spouses who have their own mostly salaried careers so corporate income splitting with spouses really doesn’t help them

2) I imagine most “rich” people already max their RSP contributions

3) If MDs are 1/3 of 1%ers, can you tell us who the other 2/3 are? Ont docs aren’t going to be in the 1% for long because Ont Libs have reduced payments for medical services so that MD net income is down by 30-50% over the past 5 years

4) Stay healthy. It’s going to be hard to find a doctor in Ontario, get a specialist consultation and get the treatment you need, in a timely fashion

#57 Roasted Nutz on 11.30.15 at 7:09 pm

#43 Apocalypse2015 on 11.30.15 at 6:35 pm

News from the last hour:

U.S. expects “imminent” attack in Afghanistan.

Russia implements immediate “missile defence” system in Syria.

ISIS will be more than happy to take credit for starting a world war.

http://www.cnn.com

Stay tuned…….

—————

Only 4 more weeks til you get a new name!

#58 Randy on 11.30.15 at 7:11 pm

Cut it out Garth, You are making Liberals and Harper Haters look pretty STUPID. I’m getting a extra bottle of Merlot a week. Hoooray !

#59 S.Bby on 11.30.15 at 7:12 pm

The question that begs to be asked is do the T2 people actually know all this but use it to confuse the population by spreading misinformation? I guess it worked because it helped T2 get elected.

Speaking of misinformation, I also have to point out the divorce is not 50% and it has never been that high. I won’t bother to post a bunch of links about this but anybody can Google it.

#60 BlackDog on 11.30.15 at 7:12 pm

@FreedomFirst#31 re: “I never had kids and I live alone, but many many men I have known have not been so fortunate. I am blessed. ”

I have three beautiful, intelligent, empathetic, university/high school aged daughters, whom I live with, along with their father, my husband. It is rough at times, yet I am blessed.

#61 Mocha on 11.30.15 at 7:12 pm

@ 17:

“In Germany If i make 100 k euro and I am single I take home less than 50 k, if I have family it goes up to 75 k…”

That’s just flat-out discriminatory, and you want to bring it here? It looks like another desperate attempt by a “modern” country to convince its indebted and overly taxed populace to have children. In Germany’s case, it must not be working too well, thus implementation of the “zillions of third world Muslim refugees” immigration policy.

#62 BlackDog's Husband on 11.30.15 at 7:16 pm

@FreedomFirst#31,

Don’t listen to Blackdog my wife. Life is hell. The four women I live with make me miserable. Hell they even cycle at the same time forcing me to leave for several days on end. You are my idol. You are the man I could have been if I had only thought about my freedom first. WHHHHAAAAAAA!!!!!!!!!

#63 Tudor on 11.30.15 at 7:18 pm

I find this post overly alarmist and it completely fails to put any of the increases in historical context. As recently as the 70’s the top income bracket was taxed as heavily as 80%:
https://www.fcf-ctf.ca/ctfweb/Documents/PDF/1995ctj/1995CTJ5_02_Smith.pdf

I fail to appreciate why the sky is suddenly falling with a relatively minor increase in the top bracket compared to historical norms.

#64 BlackDog's Husband on 11.30.15 at 7:22 pm

@BlackDog’s Husband

Shut up, and do the dishes. It is your turn.

#65 bdy sktrn on 11.30.15 at 7:25 pm

More than 100 heads of government and 40,000 other attendees are meeting on Nov. 30 for the launch of the two-week United Nations conference on climate change

————————-
40.000 business class vacations cost dearly, milens get ready to start funding these parties.

#66 BlackDog's husband on 11.30.15 at 7:26 pm

ooops….last comment was from my owner, not me, but I read her mind…but damn, hit submit too soon as I heard her sneaking up on me. Now I have to do laundry as punishment after the dishes…won’t touch hr laptop again…so not worth it…sucks to be me. Freedomfirst, I will dream about your life tonight. Pleas do not wake me.

#67 Keith on 11.30.15 at 7:29 pm

So the opposite of Reaganomics?

#68 Mike in the Okanagan on 11.30.15 at 7:30 pm

“Meanwhile entrepreneurs can establish a holding company and flow up cash flow from the Opco without tax being triggered, then bring it home through a family trust or dividends, making use of the dividend tax credit.”

Sounds good except there has been a revision to Section 55(2) of the tax act which is causing problems distributing dividends between corporations tax free. Let’s hope this gets fixed soon.

#69 BobC on 11.30.15 at 7:31 pm

#34 old man too

Finally, the smartest post in weeks.
You cannot hurt the rich without hurting your ability to become rich. Now if you have sat down and decided your a loser and want to give up hope then keep hurting the rich, it doesn’t matter.

#70 Bold Liberals love Accountants on 11.30.15 at 7:31 pm

Think of all the Accounting Positions this new tax scheme will create! There will be many high end Accountants now servicing the 1% crew. Long live the Accounting Profession. Ultra safe and rewarding because catering to high end clients will be the Trudeau Liberal Legacy.

#71 will on 11.30.15 at 7:51 pm

A small business owner switching from personal income to dividends would be too obvious wouldn’t it? I mean if they (foolishly or ignorantly) paid themselves in personal income rather than dividends for many years I think CRA would question a sudden switch to dividends. There would have to be a concomitant change in the structure of the company. Sorry Garth. I just realized I am thinking out loud.

Totally legal, and happens all the time. — Garth

#72 For those about to flop... on 11.30.15 at 8:00 pm

As much as I have tried to reprogram my brain since joining this blog, when making major decisions how much money will I make/ save is probably number 3 on my list of priorities .
Which is why I will never be rich but have life’s basic needs.
My list goes something like this…
1) how will this transaction affect my quality of life?
2) how will my wife benefit from this transaction ?
3 how much money can I make / save during this decision /transaction.
Besides my wife ,I don’t care what anyone thinks about me ,which is why I rent when I could buy.
My Van is 26 years old and I can afford to buy a new car, but I will when it dies not because it’s the oldest vehicle in the street.

#73 Freedom First on 11.30.15 at 8:01 pm

#60 Black Dog

Right on. All people who feel blessed in their life are very fortunate. I am happy for you.
Sincerely, Freedom First.

#74 Parksville Senior on 11.30.15 at 8:02 pm

Garth, some of the tax reduction strategies you advocate could get your rich guy into trouble with the taxman and raise even more money for the treasury.

As an incorporated business owner I know that many of these advantages of incorporation are mythical-like the “just right yourself a cheque” meme.

Paying children or spouse for work is allowable but only for income generating work “that would normally done by an employee”—–stretching this rule could extend into tax evasion.

Sure, the rich have strategies available—and are using them to the hilt and with the aid of some of the BIG Name accounting firms, are well beyond the limit.

Thus to expect more tax avoidance is unlikely—but with a new govt, expect less tolerance for tax evasion.

Also, if the rich are so good at using TFSA loopholes, explain how this boosts entrepreneurship..maybe dividend income but to attribute that to entrepreneurship is a stretch.

Enjoy the NL election.

Shareholding relatives are entitled to collect dividends. Has nothing to do with labour. — Garth

#75 Caught In The Grip on 11.30.15 at 8:02 pm

High marginal tax brackets are generally a disincentive to work. Professionals in Europe and in other socialist countries work many fewer hours per week on average for this reason. They end up working just enough hours until they hit the high water mark. Why work the additional 5-10 hours per week if you’re going to be taxed at 49%?

#76 Sheane Wallace on 11.30.15 at 8:04 pm

#26 CRA guy

Sure, good luck in finding a doctor after that in the ‘free’ health care system.

#77 Conrad on 11.30.15 at 8:08 pm

@#38 Harbour
Yeah O’Leary was on fire today:
http://www.bnn.ca/Video/player.aspx?vid=760243

#78 Accountable on 11.30.15 at 8:08 pm

A small business owner switching from personal income to dividends would be too obvious wouldn’t it? I mean if they (foolishly or ignorantly) paid themselves in personal income rather than dividends for many years I think CRA would question a sudden switch to dividends.
——————————————————-
The CRA does not care. The tax code is integrated; you end up paying the same amount in corporate and personal tax regardless of how you dice your compensation. There are tax deferral advantages, but there is no free lunch.

The CRA will not care. The tax code gives no

#79 Caught In The Grip on 11.30.15 at 8:08 pm

Every Canadian should own VUN in their RRSP and TFSA.

Period.

If you don’t know what VUN is, find out.

#80 Caught In The Grip on 11.30.15 at 8:13 pm

1. Sell the rental property
2. Buy VUN
3. Forget you own VUN for 25 years
4. Retire wealthy

#81 Smoking Man on 11.30.15 at 8:19 pm

#71 will on 11.30.15 at 7:51 pm
A small business owner switching from personal income to dividends would be too obvious wouldn’t it? I mean if they (foolishly or ignorantly) paid themselves in personal income rather than dividends for many years I think CRA would question a sudden switch to dividends. There would have to be a concomitant change in the structure of the company. Sorry Garth. I just realized I am thinking out loud.

Totally legal, and happens all the time. — Garth
….

I play by the book when it comes to taxes …that 2.6 billion was way off side.

Full legal tax avoidance going forward.

Wait till the new pensions come in. I’m turning my staff into contractors. Hell might even sell that business..

My consulting gig, it’s incorporated in Delaware..

Just wondering, are USA corporations allowed to gamble in casinos and claim losses. Just like live Americans.

Garth please say this is possible.

#82 mike from Mtl on 11.30.15 at 8:25 pm

#46 Harbour on 11.30.15 at 6:40 pm
O’Leary: You’d be an idiot to buy a house

http://www.bnn.ca/Video/player.aspx?vid=760243

=====================================

Wow my thoughts exactly. Also have to agree with him that there might (probably) be no dramatic crash – FIRE and cie. have massive vested interests/

#83 Randy Randerson on 11.30.15 at 8:26 pm

#71 will on 11.30.15 at 7:51 pm

Due to tax integration, the tax you ended up paying is the same, whether you’re paid salary out of your CCPC and claim tax deduction, or dividend out of your CCPC and pay the small business tax. CCPC’s can’t reduce tax, but they do help to defer them.

They also help in creating deductions from taxable income. — Garth

#84 common sense on 11.30.15 at 8:33 pm

Great Post…

Isn’t it great when it’s 100% legal to play by the rules and still avoid taxes?

One more reason to enjoy life and have more money is to either be in the lower or upper class as the middle is paying for both.

#85 Chris on 11.30.15 at 8:38 pm

Tax in Canada already too high. The higher the tax is the lower economic activity is and more underground economy there is. Kijiji has so many users in Toronto. It is unbelieveable.

#86 Gulf Breeze on 11.30.15 at 8:44 pm

Oh nooooo….the poor wealthy! 50% taxes! Oh, the humanity! How will they survive on $100,000.00 per year? I have a wonderful idea. If it isn’t going to make much financial difference, anyway, why don’t we swap the wealthy whiners with more Syrian refugees.

A Syrian toddler washed up on he beach is a sad tragic image, one that tugs at heart strings. Spoiled first worlders lamenting paying higher taxes as if they’ve been asked to give it ALL up and plow potatoes on a collective farm…not so much!

God bless Trudeau’s commitment to refugees and raising taxes on the wealthy.

#87 Warren- the lagging indicator on 11.30.15 at 8:46 pm

saskatoon – ” it may be helpful to get some new data talking points to push your rate hike agenda.”. I wonder what agenda you are talking about, I really do not think Garth has gambled heavy and leveraged up a forex USD long bet or gone all in on preferred shares. I think the most gambling that Garth does wrt investing is shifting asset mixes slightly, country weightings and maybe timing the rebalancing dates of his diversified portfolio a bit.

#88 Dean on 11.30.15 at 8:48 pm

we are richer than you think
——————————————
Syrian refugee coordinator in Montreal to make $1,800 a day to welcome the newcomers to Canada

http://news.nationalpost.com/news/canada/syrian-refugee-coordinator-in-montreal-to-make-1800-a-day-to-welcome-the-newcomers-to-canada

#89 Lookinin on 11.30.15 at 9:04 pm

Re: post #38 – Kevin O’Leary BNN video link, for those interested. http://tinyurl.com/p78xr6s

#90 crowdedelevatorfartz on 11.30.15 at 9:08 pm

@#62,64,66 Blackdogs Husband

Good one! :)-

#91 common sense on 11.30.15 at 9:08 pm

#75 Caught In The Grip..

Exactly….why work the extra hours to reach a higher tax bracket?

It’s always about cost vs benefits…

#92 Daisy Mae on 11.30.15 at 9:09 pm

“Our hot new prime minister….”

******************

IF you keep this up, people will start talking…. LOL

#93 Hawk on 11.30.15 at 9:09 pm

The liberal socialist communist mentality that seems to have afflicted our great country is all about redistributing from the productive element of society to the non-productive.

I prefer to use the term “productive”as vs. “rich” because not all rich people are productive or useful and not all middle class or working poor are unproductive. Rather its a constant re-distribution from those whose earn their living with hard work as vs. those that are either living of other people or have their wages artifically inflated by non-market forces (i.e. many in the government).

And the main beneficiaries are also, less poor people and more so called public servants, whose remuneration is forcibly subsidized by the free market.

In the end the grasshoppers, will drive out all the ants.

#94 BlackDog's Husband on 11.30.15 at 9:10 pm

@FreeedomFirst re: “Right on. All people who feel blessed in their life are very fortunate. I am happy for you.
Sincerely, Freedom First.”

Thank you for your kind words, particualarly given that you have expressed numerous times here that marriage is freedom sucking for a man.

But since I am not a man, you are right I AM EVER SO HAPPY as I’ve met my life goals – to catch and marry a man and have his babies. I have fulfilled my role in the grand scheme of things as WOman.

The difference between you and my darling husband is that unlike you,he does not believe with all his little, selfish heart that men cannot possibly even be happy unless they live unhindered so to speak, as you do.

Ask my husband, he’ll explain how great married life is. Hang on, I’ll go see if he has time to tell you in his own words. I will even let him back on my laptop for a few minutes to type a reply. He’s downstairs doing the kids’ laundry, but its ok if he takes a 5 minute break to discuss how wonderful it is to be married.

I consider it my obligation to all mankind, to allow my husband to speak freely about how wonderful married life REALLY is.

#95 45north on 11.30.15 at 9:16 pm

mirabile dictu never saw that before

S.Bby: do the Trudeau people actually know all this but use it to confuse the population by spreading misinformation? I guess it worked because it helped him get elected.

they’re drinking their own kool-aid.

they ( the Trudeau people ) have a year’s grace. When the rest of us fill out our 2016 taxes we’re going to be pissed.

Victor V: from your link: Other slides showed Canada’s home price growth since the 2008 recession has outpaced that of the U.S., Australia, and the U.K. It also reiterated risks to housing include high debt-to- income and concentration of net worth in housing.

Siddall isn’t drinking the kool-aid

#96 BlackDog's Husband on 11.30.15 at 9:16 pm

oooops….that last post was from me, not Mr. Money bags/housekeeper/whatever I tell him to do/sperm provider…errrr I mean my darling husband.

#97 BlackDog on 11.30.15 at 9:17 pm

I give up.

#98 Daisy Mae on 11.30.15 at 9:19 pm

“Of course, a rich guy with a fancy accountant can also use flow-through shares….”

********************

Well, if there are so many loopholes, why doesn’t everyone just RELAX?

#99 Sam the Sham on 11.30.15 at 9:19 pm

Come on folks, we all know the Liberals were only kidding when they said they were going to really tax the rich. It’s just something politicians say to get elected. It ain’t really going to happen. The loopholes will be there. Let’s just move on. I’m really looking forward to all the carbon taxes I’ll be paying to save the planet. LOL!!

#100 not 1st on 11.30.15 at 9:23 pm

#34 Old Man Too on 11.30.15 at 6:13 pm

How am I supposed to become a 1%er if they keep raising my taxes?

—-

Wage slaves dont become 1 percenters. Everyone knows that. But keep putting in those extra nights and weekends just in case.

#101 Jeff Gauld on 11.30.15 at 9:24 pm

“Or convert from salary to dividends”

Ever hear of ‘integration’ Garth?

#102 not 1st on 11.30.15 at 9:26 pm

#94 BlackDog’s Husband on 11.30.15 at 9:10 pm

Dont give FF a hard time. He is fully invested in the local red light economy.

#103 Smoking Man on 11.30.15 at 9:28 pm

Ha, no wonder CSIS is all over my ass.

The UCC acronym (Universal Consciousness Consolidator) featured in my book is big lingo in the Freemen Moment.

And I always thought it was my un-crack able encryption technology I sell to High Rollers in the corporate world that got me on the radar.

Saw a few clips of FreeMen Mr. CSIS

Honest, I wouldn’t be looking at those videos if Justin didn’t roll down the car window and chucked 2.6 billion.

I’m exploring all options.

#104 Linda on 11.30.15 at 9:36 pm

Found an interesting table via Google (search top tax rates world wide). The table tries to include all taxes for each country that would apply to businesses/individuals. For individuals, the following is who taxes the most:

#1 – Belgium with a combined top rate of 64%
#2 – Finland @ 61.96%
#3 – Sweden @ 59.7%
#4 – Aruba @ 58.95%
#5 – USA @ 55.9%
#6 – Luxembourg @ 52.45%
#7 – Netherlands @ 52%
#8 – shared by Austria, Canada, Central Africa Republic, Cuba, Israel, Japan & Senegal @ 50%

The above cited as the top tax rates paid by individuals & includes federal, state/provincial & other personal taxes where data could be confirmed (GST/VAT etc). The table does not say whether it incorporates the new top tax rates for Canada so we may edge up to official number 8 status above the other countries we currently share the 50% rate with.

#105 Jesse James on 11.30.15 at 9:38 pm

Economic Reality- https://youtu.be/J6Tj8MH9nIs

#106 JO on 11.30.15 at 9:49 pm

Don’t worry the politicos will increase the cap gain tax and come after everything eventually as the economy stays weak and interest charges eventually consume over 50% of the stalled tax revenues
You can bet they will increase the HST and also destroy the economy with the cap and trade/ carbon tax scam
They should eliminate income splitting for seniors as it is is a blatant tax goody for a generation that for thd most part paid very little for their homes, education and begin to cause explosive increases in health care bills
The biggest beneficiaries are public sector retirees and wealthy private sector retirees where one spouse has huge income and the other very low
Watch your taxes over the next 5 years
The fun is only starting. We are witnessing the take over of the economy by the kleptocrats

#107 Kreditanstalt on 11.30.15 at 9:52 pm

We’re always wondering why some of these rapacious governments don’t try the obvious and cut spending and “services” instead of constantly needing more, more, more…

Consider this: the entire developed world policy of economic repression, in place since 2008 (if not earlier) has been designed to increase asset prices and spending. If either of those wobble a bit, or – heaven forbid! – FALL, the system starts to implode.

It’s happening. What I’m waiting for are more overt and undeniable, unhideable admissions of bankruptcy from some major corporations, entities, funds, banks or governments…

#108 krum on 11.30.15 at 9:57 pm

Oil at $35 Would Trigger 26% Canada Home Price Drop, CMHC Says:

http://www.bloomberg.com/news/articles/2015-11-30/oil-at-35-would-trigger-26-canada-home-price-drop-cmhc-says

#109 Retired Boomer WI on 11.30.15 at 10:08 pm

If Canada needs t raise revenue, why not make RE subject to provincial sales taxes, or Federal sales tax if that is still alive.

RE seems to be the problem, why not a provincial land transfer tax?

You CAN screw dumb consumers without damaging the most highly compensated (who pay enough already), as do most of ours, if you forget that social security tax (6.5%) goes away for those earning about $110,000 per year.

Yeah no FAiR TAX system has ever been created. God, I do like the loopholes though, when they work for you.

Fun to game the system, and keep accountants employed.

#110 Freedom First on 11.30.15 at 10:17 pm

#86 Gulf Breeze

Other people’s money, huh?

People used to tell me I was too generous. Gulf Breeze, I see so many like you I am now believing it. And for a while now too. You’ve been cut off.

#111 Bold Bacon Bits on 11.30.15 at 10:20 pm

@ #108 Krum

What would Oil at $12 Trigger for a Canadian Home Price Drop? Or Oil at $3? Or at $95? There should be a chart for this because oil really could be priced in any of these zones?

#112 paul on 11.30.15 at 10:25 pm

#98 Daisy Mae on 11.30.15 at 9:19 pm

“Of course, a rich guy with a fancy accountant can also use flow-through shares….”

********************

Well, if there are so many loopholes, why doesn’t everyone just RELAX?
———————————————————-You do enough RELAXING for all of US.

#113 Smoking Man on 11.30.15 at 10:25 pm

New Record , no major hurricanes in Florida last ten years.

http://www.clickorlando.com/news/florida-marks-record-of-10-years-without-major-hurricane
………………………

This is why. Bit of Chapter 6 Based on a true story…

Ashman blurts out, “So what’s the plan commander Smokey?”

“Same as Always.” I said.

Ashman looks at his father and rolls his eyes.

“Ok crew, we need to make a quick pit stop to the sun, fuel up, then we’re going back to Las Vegas. We will put on a slow flyby then me and Barrington will go back to the Flamingo and get captured. Ashman stay here and talk to your dad, Jeremiah you need to go back to New Orleans, many counting on you” I said.

I start flying this bitch, a lot easier and a hell of allot more powerful than I thought, I over shoot the sun by two Galaxies. Shift it into reverse and in less than a second we are hovering over the sun. I deploy the plasma intake nozzle, and in less than five minutes got enough fuel for two trips around the universe.

This is bad news for earth, they’re all betting on global warming, I think I just started a new ice age. Should have went to a bigger star, all this booze of late is starting to affect my judgment. Going to have to move the entire family to the equator now.

#114 Leo Trollstoy on 11.30.15 at 10:25 pm

MD net income is down by 30-50% over the past 5 years

No way this is true.

Source?

#115 observer on 11.30.15 at 10:27 pm

Why not raise the property taxes

Mabey stop the developer loopholes and make them pay top taxes on real estate gains.

Or the multi house owner who uses the property as investment property

After all they have to be rich in order to own a house. Plus there is nothing they can do except pay the taxes because that is one asset you cannot hide

#116 Freedom First on 11.30.15 at 10:28 pm

#102 Not 1st

That is illegal. Besides the fact I always have to turn women away. I have always been in high demand. I am a man.

#117 paul on 11.30.15 at 10:29 pm

#109 Retired Boomer WI on 11.30.15 at 10:08 pm

If Canada needs t raise revenue, why not make RE subject to provincial sales taxes, or Federal sales tax if that is still alive.

RE seems to be the problem, why not a provincial land transfer tax?

You CAN screw dumb consumers without damaging the most highly compensated (who pay enough already), as do most of ours, if you forget that social security tax (6.5%) goes away for those earning about $110,000 per year.

Yeah no FAiR TAX system has ever been created. God, I do like the loopholes though, when they work for you.

Fun to game the system, and keep accountants employed.
———————————————————-
New homes are subject to HST the builder pays and passes it on.
Plus lot levies, Hydro, water, sewage hook up.on andon
They get plenty of tax and fees.

#118 Shirley valentine on 11.30.15 at 10:30 pm

#103 Smoking Man on 11.30.15 at 9:28 pm
Ha, no wonder CSIS is all over my ass.
——-
Oh you international man of intrigue and mystery. What a beast of a man you must be.

#119 Trojan House on 11.30.15 at 10:36 pm

#94 BlackDog’s Husband on 11.30.15 at 9:10 pm

Your husband sounds whipped. That’s a big difference from happy.

#120 Trojan House on 11.30.15 at 10:40 pm

#86 Gulf Breeze on 11.30.15 at 8:44 pm

Hey it’s the end of the month. Don’t you have some pizza and beer to go buy with your welfare check?

#121 salonist on 11.30.15 at 10:42 pm

“I am seriously telling you the devil walks among you as a man who’s filled with greed, and he’ll kill you without looking at you, and he’ll do it every day for money and for fun, and you better listen to me”

r.l.jones

#122 Leo Trollstoy on 11.30.15 at 10:43 pm

#94 BlackDog’s Husband on 11.30.15 at 9:10 pm

Was your post in jest?

I couldn’t tell.

I hope it was.

Cuz your husband sounds like a pet.

#123 Smoking Man on 11.30.15 at 10:45 pm

#116 Shirley valentine on 11.30.15 at 10:30 pm
#103 Smoking Man on 11.30.15 at 9:28 pm
Ha, no wonder CSIS is all over my ass.
——-
Oh you international man of intrigue and mystery. What a beast of a man you must be.

….

You would be very disappointed,

Bald, bad smoker’s teeth, a lazy and uncoporative Mr happy. All day lush breath and the on set of drunk man viens breaking out all over my face…

Drunkerds belly, old school massagunisit. As much as I try to appreciate woman for there brains my eyes always end up in the wrong places..I have no control over that..

I cough all day, and am always getting busted for moving my lips while thinking..

You should re think this crush you have on me…

Your turn.:)

#124 BG on 11.30.15 at 10:46 pm

#19 Sheane Wallace on 11.30.15 at 5:40 pm
#3 noel

BTW, if revenue Canada comes after you for salary distributions in a corporation you can refile and take dividends which will actually result in lower taxes.

Everything is arguable and no government can force taxation, taking away any flexibility, they could try but will surely fail. If they go after the doctors they are gone.
————————————————————

The dividend strategy is interesting pretty much only if you are considered a Small Business.
If they prove otherwise, you are screwed.

#125 Patrick on 11.30.15 at 10:47 pm

#118 Shirley valentine on 11.30.15 at 10:30 pm
#103 Smoking Man on 11.30.15 at 9:28 pm

Ha, no wonder CSIS is all over my ass.
——-
Oh you international man of intrigue and mystery. What a beast of a man you must be.
_____________________________

For the love of god remember the condoms. STD’s are rampant in nursing homes. The health care system is already strained.

https://www.psychologytoday.com/blog/love-and-sex-in-the-digital-age/201403/baby-boomers-gone-wild-seniors-and-stds

#126 Big Dipper on 11.30.15 at 10:47 pm

The rich guy, November 30th, 2015

“The extra tax burden will trigger more tax avoidance activity and result in the 240,000 people reporting about 5% less in taxable income than they do now. That will strip $7.3 billion from the tax base, and the Libs will end up with 70% less than they claimed. Worse, this decline in the tax base will cost the provinces about $1.4 billion in revenue.”

—————————————–

This is Laffer Curve Reaganomics stuff. Wildly popular with the right wing tax haters crowd (confirmation bias), but largely unproven. Let’s look at the tiny tweaks’ to the tax tables the Libs are proposing based on 2015 tables. The changes are preceded by NEW!:

15% on the first $44,701 of taxable income,
22% on $44,700 up to $89,401, NEW! 20.5%
26% on $89,401 up to $138,586,
29% on $138,586, NEW! up to $200,000
NEW! 33% anything over $200,000

These changes are unlikely to have any of the doomsday impacts as indicated above.

I did note that the Libs called the 1.5% rate cut a 7% reduction. I guess Garthian Math is widespread in political applications.

#127 Bananasan on 11.30.15 at 10:50 pm

DELETED

#128 Investorz on 11.30.15 at 10:50 pm

“Sydney Home Prices Drop Most in 5 Years as Regulation Bites.” – Bloomberg

To be faire, it’s just one month.
Still interesting, since their country’s economy ressembles ours.

http://www.bloomberg.com/news/articles/2015-11-30/sydney-home-prices-drop-most-in-five-years-as-regulation-bites

#129 Bottoms_Up on 11.30.15 at 10:51 pm

#208 Sheane Wallace on 11.30.15 at 3:46 pm
———————————-
Global warming is a scam eh? Ever hear of a thing called the greenhouse effect?

#130 BlackDog on 11.30.15 at 10:55 pm

@TrojanHouse,

I guess you don’t get my sense of humour. I like to talk like I wear the pants, but truth is I do what I am told.

I think I hear him calling from the bedroom now. Gotta go, it’s sexy time!

#131 The Premier of Ontario on 11.30.15 at 10:59 pm

and I approve of this message:

https://www.youtube.com/watch?v=rh4XTql9v6k

#132 BG on 11.30.15 at 11:07 pm

#119 Trojan House on 11.30.15 at 10:36 pm
#94 BlackDog’s Husband on 11.30.15 at 9:10 pm

Your husband sounds whipped. That’s a big difference from happy.
——————————————————————–

Not saying this guy is whipped, but some people are just happy being whipped.

#133 Gulf Breeze on 11.30.15 at 11:20 pm

#110 Freedom Foist,

I’ve been cut off??? Hilarious…by whom? Dude, I probably have a higher income than you and I don’t suffer any dopey illusions about it. It’s all generated from commercial rental revenue. I do squat and rake in other people’s HARD earned money.

Grandstanding wealthy losers who characterize themselves as job creating mavericks are ignorami who often make money, in large part, from the efforts of others.

But I’m honest. Are you?

So go ahead, Justin, tax my ass off. I am so lucky to be living in this country, instead of the God forsaken Hellhole of a national flustercluck, due South.

#134 IHCTD9 on 11.30.15 at 11:21 pm

#85 Chris on 11.30.15 at 8:38 pm
Tax in Canada already too high. The higher the tax is the lower economic activity is and more underground economy there is. Kijiji has so many users in Toronto. It is unbelieveable
——————-

Out in the boonies of southern Ontario where I live, “cash” is as normal as grass. It’s a way of life to make ends meet for many. The bone yards are jammed with pickers every weekend, scrapers, roofers, mechanics, construction trades, YOU NAME IT. I called a flatbed service utilizing a hitch-hiker tow motor last week, guy gave me a cash price right over the phone. Never ever met the guy…

Not much is said, nothing is done. I hear sweat shops are also springing up in Toronto manufacturing too.

Somewhere along the line we are going to need a 50 billion dollar expansion of the CRA investigation wing. Maybe I can get one of those collections jobs, I’m big and scary looking.

Barter is also pretty big, some even take silver, gold, and even bitcoin.

Oh well, I wish T2 luck in extracting the cash from all walks of Canadian life. It’s going to be a hell of a job, even with the help of the CBC trying like crazy to get everyone to like him.

As for me, my portion of Federal (and provincial, sorry Wynne) revenue is going to shrink in 2016, by quite a bit. Hope others are making changes to the same effect.

#135 NewDogOldTricks on 11.30.15 at 11:22 pm

Bill Gates on Consumption Tax – Is there a better way?

http://www.forbes.com/sites/timworstall/2014/03/18/bill-gates-points-to-the-best-tax-system-the-progressive-consumption-tax/

#136 Mark on 11.30.15 at 11:22 pm

“Why not raise the property taxes”

The problem with taxing RE in Canada is that the current system of taxes, incentives/disincentives, and even government subsidized loans in BC is largely based on an altruistic view that the elderly should be ‘maintained’ in “their” homes as long as possible.

Every time some think tank or government brings up the idea of increasing property taxes, there’s a protest down at City Hall complaining that the elderly homeowners, even in “million dollar” houses will be relegated to eating catfood.

Yes, this is true, that if property prices rise enough, the elderly, if they are to stay in their same houses, will only have enough for catfood. But it does not address just how rational is it for the non-working, retired element of society to be able to park themselves on prime real estate and enjoy taxes that do not reflect the full long-term cycle of the costs. While the young face extremely long commutes from the suburbs.

We need either a cultural shift in Canada, where the elderly will realize that they don’t need to be living on that prime, within proximity of downtown RE if they’re not going to be working there, and voluntarily leave. Or a shift towards a society which has no problem raising the taxes on high valued property, even at the expense of those seniors (who really should take Garth’s advice, sell, and enjoy a much more balanced portfolio in their golden years!) so that it flows to its most productive use by people making good money and willing to pay the incremental cost of extra taxes in lieu of significant commutes. Better to pay a couple thousand extra in property taxes to live in Toronto proper, IMHO than to be stuck on the GO train for an hour each day each way from Mississauga.

For this reason, I find the idea that Toronto feels entitled to federal infrastructure money to fix the infrastructure which brings the city so much prosperity to be bizarre. This is infrastructure which should be paid for by Toronto taxpayers, not by those who have chosen to live elsewhere less expensively.

“We need either a cultural shift in Canada, where the elderly will realize that they don’t need to be living on that prime, within proximity of downtown RE if they’re not going to be working there, and voluntarily leave.” Ageism is as ugly and destructive as racism. When you think you can tell people where to live by their age, religion or skin colour you lose the right to post on this blog. — Garth

#137 Mark on 11.30.15 at 11:23 pm

“Yes, this is true, that if property prices rise enough”

err, meant to say, “that if property *taxes* rise enough…”.

#138 Nemesis on 11.30.15 at 11:23 pm

“Oh you international man of intrigue and mystery. What a beast of a man you must be.” – SurelyValentine

#SmokingMan&[email protected]

https://youtu.be/JLau1ANQO2I

#139 IHCTD9 on 11.30.15 at 11:24 pm

#118 Shirley valentine on 11.30.15 at 10:30 pm
#103 Smoking Man on 11.30.15 at 9:28 pm
Ha, no wonder CSIS is all over my ass.

——-

Oh you international man of intrigue and mystery. What a beast of a man you must be

—————

He is nothing compared to me.

Sorry SM, I eat Nectonites for breakfast.

#140 IHCTD9 on 11.30.15 at 11:30 pm

#98 Daisy Mae on 11.30.15 at 9:19 pm
“Of course, a rich guy with a fancy accountant can also use flow-through shares….”

********************

Well, if there are so many loopholes, why doesn’t everyone just RELAX?

————-

Loopholes are only for the rich folks dear!

#141 Smoking Man on 11.30.15 at 11:36 pm

#139 IHCTD9 on 11.30.15 at 11:24 pm
#118 Shirley valentine on 11.30.15 at 10:30 pm
#103 Smoking Man on 11.30.15 at 9:28 pm
Ha, no wonder CSIS is all over my ass.

——-

Oh you international man of intrigue and mystery. What a beast of a man you must be

—————

He is nothing compared to me.

Sorry SM, I eat Nectonites for breakfast.
..

Cant blame you…Nectonite woman are out of this world.

#142 Mark on 11.30.15 at 11:45 pm

“Ageism is as ugly and destructive as racism. When you think you can tell people where to live by their age, religion or skin colour you lose the right to post on this blog. — Garth”

Garth, real estate in a dynamic and liquid economy should flow to its most productive uses. And the most productive use of real estate in close proximity to where the jobs are, is for the housing of working people. Retired people, by definition, are not working. I make no apologies for suggesting that the tax and social policy system at various levels of government acts against the rational distribution of RE to its highest value uses. You often lament on this blog that retirees and near-retirees are extremely highly over-exposed to RE, at their own financial peril. Do you not think that government policy that re-enforces and enables such high over-exposure is something that should be questioned, even if it might be politically unpopular? I never suggested that explicit age-policy should be instituted, but merely that the current set of policies heavily encourages and enables the bizarre situation of seniors in million dollar houses (but little other income/savings other than OAS/CPP) not being able to afford property taxes when clearly the rational thing to do is to follow your advice of portfolio balance and appropriate downsizing/rightsizing.

Keep digging. You’re almost there. — Garth

#143 Shirley Valentine on 11.30.15 at 11:46 pm

#123 Smoking Man on 11.30.15 at 10:45 pm

#116 Shirley valentine on 11.30.15 at 10:30 pm
#103 Smoking Man on 11.30.15 at 9:28 pm
Ha, no wonder CSIS is all over my ass.
——-
Oh you international man of intrigue and mystery. What a beast of a man you must be.

….

You would be very disappointed,

Bald, bad smoker’s teeth, a lazy and uncoporative Mr happy. All day lush breath and the on set of drunk man viens breaking out all over my face…

Drunkerds belly, old school massagunisit. As much as I try to appreciate woman for there brains my eyes always end up in the wrong places..I have no control over that..

I cough all day, and am always getting busted for moving my lips while thinking..

You should re think this crush you have on me…

Your turn.:)
—————————–
But baby, you have groupies, and you’ve got a mean plasma nozzle.. …isn’t that all we need!

https://www.youtube.com/watch?v=F1lJFlB-89Q

#144 Smoking Man on 11.30.15 at 11:50 pm

“We need either a cultural shift in Canada, where the elderly will realize that they don’t need to be living on that prime, within proximity of downtown RE if they’re not going to be working there, and voluntarily leave.” Ageism is as ugly and destructive as racism. When you think you can tell people where to live by their age, religion or skin colour you lose the right to post on this blog. — Garth
….

Hallelujah.

#145 Sooooo close on 11.30.15 at 11:53 pm

Meanwhile everybody believes the rich – the top 1% of us – will be reamed. -Garth”

Garth, hate to split hairs, but how close are you to getting into the .75%ers?

#146 Sooooo close on 11.30.15 at 11:57 pm

#136 Mark on 11.30.15 at 11:22 pm
Ageism is as ugly and destructive as racism. When you think you can tell people where to live by their age, religion or skin colour you lose the right to post on this blog. — Garth”

Gartho, am guessing that Mark’s favourite move is Logan’s run….plot spoiler below for the young’uns

Plot[edit]

In the year 2274, the remnants of human civilization live in a sealed domed city, a utopia run by a computer that takes care of all aspects of their life, including reproduction. The citizens live a hedonistic life but, to maintain the city, everyone must undergo the ritual of “Carrousel” [sic] when they reach the age of 30.[10] There, they are vaporized and ostensibly “renewed”.

#147 Hawk on 12.01.15 at 12:14 am

#136 Mark on 11.30.15 at 11:22 pm

============================

Funny you didn’t strike me as a Marxist.

So old people should not be entitled to live in prime real estate, that they own, bought with their own money, without being persecuted for it by higher taxes, so that younger people can have shorter commutes?

This is as abhorrent as the Boomer obession with governments taking on more debt, letf to be paid by future generations, so they can have “benefits” now.

#148 jane 24 on 12.01.15 at 12:31 am

The easier Canadian tax avoidance scheme if you have the education, training, guts and IQ is to just move South.

Why stay in Canada just to pay more to support Justin’s schemes.

With todays internet and technology you can do most jobs from anywhere else in the world.

#149 D.D. Corkum on 12.01.15 at 12:32 am

#8 ApplePi

“In desperate times, don’t you think things like the dividend tax credit ( in part or in whole ) will go away?”

—-

I would expect them to change capital gains before the dividend tax credit, since the latter is intended to prevent double-taxation.

To be honest, I’m not exactly sure what the logical argument is for capital gains to be at 50%. I know the net result (incentivizes putting money at risk), but not the legal basis.

#150 VicPaul on 12.01.15 at 12:34 am

# 113 Smoking Man
Last paragraph, second sentence “should have went”… clangs like a bell. Try “Should have gone…”.
F#%£ in’ teachers.

#151 Terry on 12.01.15 at 12:36 am

I understand all that your saying Garth, you make sense and your correct but, the Liberals don’t get it and they won’t listen. All we can do is hold our own wealth together while all the other dominoes fall down around us. The only way they will get it is when it’s all taken away from them. Let them learn the hard way Garth……….it’s time that we let more of that happen in this world.

#152 Etf investor on 12.01.15 at 12:43 am

Garth, how can an investor profit from a rising Canadian dollar? For various reasons, my rough prediction is that the Canadian dollar will bottom around 70c in the next six months. Then I would expect it to stay flat or rise over the next few years. Currently I’m invested in a CAD denominated unhedged S&P 500 ETF. I’ve profited from the decline in CAD. But I can’t think how to do something similar to profit from a rising CAD while still investing in the US (about which I’m bullish) and not in Canada (about which I’m bearish).

#153 Observer on 12.01.15 at 1:24 am

@ Mark
We need either a cultural shift in Canada, where the elderly will realize that they don’t need to be living on that prime, within proximity of downtown RE if they’re not going to be working there, and voluntarily leave.

What we need is a shift away from concentration of business and workers in the core areas of Canadian cities to the suburbs. We have a whole polluting, tax draining flow of people in and out of a relatively small central area……dumb.

#154 LowRent of Arabia on 12.01.15 at 2:17 am

For expats in the middle east (already brain-drained) we celebrate our Tax-Free day with a champagne flute the same time we toast New Year’s eve.

Not sometime in July.

It’s the ultimate TFSA but the skiing sucks and Christmas celebrations leave much to be desired.

#155 Winterpeg on 12.01.15 at 2:20 am

Mark, normally I enjoy your perspectives puzzled the hell out of me. Do you have stats on how many seniors are living closer to downtown in million dollar homes vs younger ones? (and define downtown please) Regardless who cares? Can the younger generation afford RE tax increases? Not by the sounds of what we read here everyday.
The reasons to encourage some seniors to leave their homes are more social than financial. (social isolation, safety, health) But if granny wants to stay in her home forever that’s her right if she can afford it.

#156 Winterpeg on 12.01.15 at 2:23 am

Meant to say “,but you puzzled the hell out of me”

#157 Ralph Cramdown on 12.01.15 at 2:27 am

Why get all snippy at Mark’s observation that senior citizen property owners whine too much about taxes? It’s absolutely on the mark. In BC, any senior can defer property taxes until he croaks, paying 1% interest, no means test. It’s almost too obvious to point out that everyone else has to pay more to compensate. In Toronto (and the rest of Ontario, soon), land transfer taxes help fund municipal services, penalizing younger people (who move) for the benefit of older people (who move less often). And we all have to endure the constant lobbying of the Canadian Association of Retired People (“CARP”), whose primary mission appears to be convincing us that all old people with low incomes are poor, and should be subsidized accordingly.

#158 LowRent of Arabia on 12.01.15 at 2:56 am

BTW Garth,

I know it is your blog but don’t censor Mark, ageists, racists or anyone.

John Stuart Mill said it best

“The peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.” – JS Mill

Put their false ideas on display to make our arguments and opinions stronger. Thanks.

#159 Jack Nose on 12.01.15 at 3:41 am

The article says oil at $35 a barrel would cause house prices to correct 26%.

http://business.financialpost.com/personal-finance/mortgages-real-estate/oil-at-us35-would-send-canadian-home-prices-tumbling-26-cmhc-says

I’ve got news for you…house prices are already down 30% due to the crushing 35% collapse of the C$ by the BOC Clown Prince Poloz.

If you’re a Yuan holder…you only pay $600,000 for a million dollar home…if you’re a pound holder you only pay $500,000. Eu and USD holders are already getting the same deep discounts….it’s the Canadians who have been screwed…..everybody else is having a bargains thrown at them.

Did you know that professional wages in China are twice what they are here…ditto the US and the UK. Canadians are really the bottom of the barrel when it comes to income and wealth.

#160 TRT on 12.01.15 at 4:03 am

Ageism??

LOL

Doesn’t exist since everyone that lives long enough passes through all the stages.

Racism is an entirely different beast.

Don’t invent things here on this blog.

#161 TRT on 12.01.15 at 4:07 am

Post 124 BG said “If they go after the doctors they are gone.”

No they are not. If they go to the USA, they can only work under a salary. They cannot open their own business. Very difficult to do so under immigration laws.

Canada might need to put all Doctors on salary if their antics get out of control. Didn’t all of them go into medicine “to help heal people” lol.

#162 Climate Change...here we go again on 12.01.15 at 4:52 am

#129 Bottoms_Up on 11.30.15 at 10:51 pm

The 2 basic arguments about CO2 and climate warming boil down to this:

(1) Will the man-made 29 gigatons/year of CO2 vs. Mother Nature’s 750 gigatons/year of CO2 and Mother Nature’s ability to absorb the extra man-made CO2 be the tipping point towards global warming (numbers per the IPCC and the argument at the heart of the greenhouse effect)?

(2) Do we believe climate change models that have yet to model past climate change events reliably (i.e., if you cannot predict the past with statistical certainty and to date have not, what makes you think they can predict the future)?

Will it warm up, cool down, stay the same…NOBODY KNOWS with statistical certainty to predict the future.

We have had much warmer periods than today where not much happened (e.g., Holocene Climatic Optimum).

Or cooler periods than today where not much happened (e.g., Little Ice Age).

Or periods similar to today where not much happened (e.g., Medieval Warm Period).

Humanity and Mother Nature (including the Polar Bears) all made it thru the above without major incident.

So telling another blog poster “Ever hear of a thing called the greenhouse effect?” is no less of an absolute statement to make in light of historical data/facts.

#163 OBSERVER on 12.01.15 at 5:10 am

#45 BC Guy on 11.30.15 at 6:36 pm

–> Already happening. In lots of industry such as IT, management see a resource as just a resource, the new management is to outsource and get cheap labour.

India and China are a popular cheap labour resources.
Just like the Vancouver Canucks and TO leafs, they don’t believe in building knowledge from the ground up. Instead they grab for the quickest resources available that doesn’t understand the dynamics or business of a company.

Once the job is done the knowledge moves back to india and the companies are left with a knowledge gap which would takes years to mend

#164 Tony on 12.01.15 at 5:10 am

Re: #15 Julia on 11.30.15 at 5:33 pm

They’re not, its indexed to inflation.

#165 The rich guy | Realties.ca on 12.01.15 at 5:57 am

[…] Source: http://www.greaterfool.ca/2015/11/30/the-rich-guy/ […]

#166 ANON on 12.01.15 at 7:50 am

#160 TRT on 12.01.15 at 4:03 am

Ageism??
LOL
Doesn’t exist since everyone that lives long enough passes through all the stages.

I propose the term bubbleism, where the last ones don’t get to pass through the booming stage. Maybe bagholderism could be more appropriate? Scapegoaterism as a more general term for whomever gets the blame this time around and does not know what hit him?

#167 paul on 12.01.15 at 8:15 am

#115 observer on 11.30.15 at 10:27 pm

Why not raise the property taxes

Mabey stop the developer loopholes and make them pay top taxes on real estate gains.

Or the multi house owner who uses the property as investment property

After all they have to be rich in order to own a house. Plus there is nothing they can do except pay the taxes because that is one asset you cannot hide
———————————————————-
Good thing there are ‘Multi house owners’ It gives you a place to live!

#168 Herb on 12.01.15 at 8:31 am

So, by this reasoning, the key to national wealth and happiness would be to eliminate taxes for corporations and the rich, and let prosperity trickle down across the country.

Corporate prosperity will trickle down in the form of mergers and acquisitions, resulting in more off-shoring, efficiencies of scale in jobs, and shareholder value. Tax savings for the rich will leave them more wealth to invest in more international travel, real estate and luxury goods. What could possibly go wrong with this economic plan?

Sorry, but I have seen no other form of trickle down since Ronnie Reagan proclaimed that doctrine. Must be time to adjust my blinkers from the “leftie” peripheral to the “rightie” across-the-eyes position.

Nobody is advocating an end to taxation. But relieving people of half their earnings seems excessive by any measure. Arguments based on extreme positions are failures, by the way. — Garth

#169 paul on 12.01.15 at 8:36 am

“We need either a cultural shift in Canada, where the elderly will realize that they don’t need to be living on that prime, within proximity of downtown RE if they’re not going to be working there, and voluntarily leave.” Ageism is as ugly and destructive as racism. When you think you can tell people where to live by their age, religion or skin colour you lose the right to post on this blog. — Garth

———————————————————-
This would fix everything, We better get out of Dodge !
lol
https://www.youtube.com/watch?v=rRLwV2xafpk

#170 busman7 on 12.01.15 at 9:11 am

Spot on #1!

#171 unbalanced on 12.01.15 at 9:14 am

The more you make, the more they take. What a lovely vicious circle. Thats why corruption, evasion, underground, drugs are so inviting. Even some highly respected people do it. Life is bliss. If the government can do it, YOU SHOULD DO IT !!!!!!!!

#172 Herb on 12.01.15 at 9:25 am

“Arguments based on extreme positions are failures, by the way. — Garth” (at #168)

Known in logic as reductio ad absurdum and quite legitimate.

Dipper logic. Absurdum. — Garth

#173 busman7 on 12.01.15 at 9:31 am

“When you think you can tell people where to live by their age, religion or skin colour you lose the right to post on this blog. — Garth”

However, it’s OK for Harper’s cons to tell you where to live or they disenfranchise you while still taxing you?

Same with the provinces telling you where to live or you lose your healthcare?

#174 JSS on 12.01.15 at 9:33 am

BMO announces dividend increase.

http://ca.reuters.com/article/businessNews/idCAKBN0TK4CQ20151201

#175 Herb on 12.01.15 at 9:45 am

“… relieving people of half their earnings seems excessive by any measure.” (Garth, at #168)

I agree, Garth, so why don’t we have a flat tax instead of the onerous progressive system? Thirty years or so ago there were suggestions that a 17% flat tax and a post-card sized tax return would raise the same amount as the progressive.

Cui bono?

#176 Herb on 12.01.15 at 9:54 am

“Dipper logic. Absurdum. — Garth” (at 172)

And that’s an ad hominem and not legitimate – but useful if one has nothing better.

#177 Retired Boomer WI on 12.01.15 at 9:54 am

“Nobody is advocating an end to taxation. But relieving people of half their earnings seems excessive by any measure.”

Does it now? While no expert on tax policy here in the US, or Canada let me examine this a bit more.

It might be interesting to ‘see’ what the historical effective tax rates at both the Federal, Provincial, City level have been on households of various incomes.

In the 1950’s America’s Federal Tax rate went from 70% to as high as 92%. Kennedy reduced it back to 70%.
I remember at this time when there was no ‘sales taxes’ on goods.

When that FED rate dropped to 70% seems a 3% sales tax began.

Now it is less, but our deficit is larger? Progress??

Feel free to donate 80% or 90% of your income to the feds. Nobody is stopping you. — Garth

#178 fancy_pants on 12.01.15 at 10:30 am

modern day Robin Hood will save the day. I guess I prefer peckerettes over a bunch of merry men and a flashy, rich, mercedes driving hero shooting arrows of hypocrisy. + Robin is just a virgin pawn on the international scene. be prepared to take heavy hits for global betterment

#179 Angela on 12.01.15 at 10:38 am

Glass half full…$416/year = 8.68 bottles of Woodford Reserve.

#180 Broke Dick on 12.01.15 at 10:41 am

#38 Harbour on 11.30.15 at 6:24 pm
O’Leary trashed Canadian real estate on BNN today… fu%# it was good!!

He went on and on… why would you want to spend 400K on a box that costs you huge amount of commission in and out, huge up keep, etc etc…

Real estate isn’t going anywhere for the next 5 years, etc, etc…
================================
Garth you and O’leary should tour together. You’ll look like a rockstar beside him, all that hair and all. You’re taller than him too!

#181 noel on 12.01.15 at 11:01 am

The majority of the most successful and dynamic economies have marginal tax rates of over 50% for the highest individual earners. The US used to be well over this mark during the periods of their greatest growth.

Its only recently that personal tax rates for the highest earners in the have been slashed, and it isn’t coming along with an acceleration in growth in the greater economy. In fact, the opposite is true – there is a correlation between lowering marginal tax rates and average growth, decade by decade. Maybe its causation, maybe not, but to argue that growth will suffer because the gov’t is raising taxes 3-5% on people earning 5 times the average income is absurd and self serving.

Show me one instance of an economy slowing down as a result of increasing marginal tax rates and I’ll show you how to collect your Nobel prize.

The marginal tax rate in Ontario for someone earning $200,000 is 47.97%. Seems high enough to me. BTW, what’s yours? — Garth

#182 AB Boxster on 12.01.15 at 11:15 am

RE: Property Taxes

The whole concept of a tax on the value of an asset is a massive joke that results in huge distortions in tax and social policy.

At one time the value of a property ‘may’ have had some relationship to the ‘ability to pay’ taxes and services actually used.

The distortions in the property market over the past 20 years (especially in ‘hot’ markets like YVR) make the concept of a tax on property , a mess.

To adjust to these distortions government then adds new distortions (such as deferral of taxes for the elderly , that now cannot afford the tax bill) which distorts things even more.

Municipal governments maintain massive staff, systems and processes to try to track the value of homes, all in the aid of a taxation system that has little relation to actual services used, or individual ability to pay.

And as a result, some actually support more ‘advanced and enlightened’ social policy to ‘encourage’ those who no longer ‘contribute’ to society to get the hell out of the way for those what do.

Pathetic.

#183 noel on 12.01.15 at 11:36 am

The marginal tax rate in Ontario for someone earning $200,000 is 47.97%. Seems high enough to me. BTW, what’s yours? — Garth

About the same. And we receive fantastic services for those tax dollars. Top notch healthcare by any standard, solid infrastructure and affordable education.

You can pick and choose things that are lacking in these services – lack of specialists, long wait times, dumbing down of higher education and ‘safe space’ nonsense, crookedly tendered government contracts, but overall we have great systems in place that are funded by our taxes.

If ~50% marginal tax rate is too high, what do you suggest we set it at?

Personally, I would like to see the minimum income threshold of where you pay taxes increased, and the marginal rates across all brackets increased as well to bring in the same revenue. IE – make less than 50k/year, no income tax – $50-60k 15%, $60-70k 18% , etc etc, this would help low income earners the most, and it would increase aggregate consumption as well.

#184 Tony on 12.01.15 at 11:53 am

Re: #174 JSS on 12.01.15 at 9:33 am

Akin to listed corporations buying back shares in the most overvalued markets in history. The carnage will be colossal. All the short sellers are short CIBC of the big 5.

#185 Rapier Wit on 12.01.15 at 12:21 pm

So, Garth…. how credible is this? On balance, it seems a spurious notion – however, I don’t know enough to judge the logic – if there is any.

http://business.financialpost.com/news/economy/looks-like-zirp-the-feds-seven-years-of-low-rates-and-high-debt-is-going-to-add-up-to-zip

#186 OCanada in the KSA on 12.01.15 at 1:22 pm

It’s almost worth it to take the pay cut I’d get to move down to the southern states for work now.

How bad can hurricanes really be?

#187 TurnerNation on 12.01.15 at 1:29 pm

No rate hike till Q2 2016 imo.

Interesting how TLT.US remains perky.

How’s that Middle East Peace Process coming along? Elites have dangled that fable over our heads for years. Flip everything they say on its head
Makes sense.

#188 Ole Doberman on 12.01.15 at 1:41 pm

Funny how Canadian real estate is getting more and more bad press. Is this becoming the don’t say I didn’t tell you so moment the powers that be want to get the critical mass ready for:

http://www.bnn.ca/News/2015/12/1/When-housing-markets-cool-lower-prices-could-obliterate-the-wealth-effect.aspx

#189 Pre-Retiree on 12.01.15 at 1:51 pm

Shareholding relatives are entitled to collect dividends. Has nothing to do with labour. — Garth

I think the Liberal government is thinking of changing this. Yes, you might be allowed to give your adult children dividends but the income will be attributable back to you. This change is not done yet, but that is the rumour out there. If my children were adults, I would get the money out this year. I am sure many are doing this.

There is zero indication this will change. — Garth

#190 Pre-Retiree on 12.01.15 at 1:58 pm

@#114 Leo Trollstoy
MD net income is down by 30-50% over the past 5 years

No way this is true.

Source?
_____________________

Just read the papers in Ontario

#191 OXI in GREECE on 12.01.15 at 2:08 pm

Speaking of polar bears…..how did everyone enjoy the Global Cooling show last night on Coast to Coast? You can probably find it on Youtube if you missed it.

#192 When will they raise rates? on 12.01.15 at 2:18 pm

Atlanta Fed just slashed Q4 GDP forecast down to 1.4% (Down from 2.3% last week)

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

Odds of Dec rate hike falling…

Don’t count on it. — Garth

#193 saskatoon on 12.01.15 at 2:24 pm

#181 noel

“The US used to be well over this mark during the periods of their greatest growth.”

FALSE.

#194 Exurban on 12.01.15 at 2:25 pm

#7 ApplePi

In desperate times, don’t you think things like the dividend tax credit ( in part or in whole ) will go away?

HEE HEE HEE HEE
HA HA HA HA
Stop .. yer killin’ me …

Bro, you are talking about Justin’s preferreds. About Bill Morneau’s investment portfolio. The taxes are not going up on those LOL.

While we’re at it, I’ve made critical comments in the past but today’s post is truly excellent. Thank you Garth.

#195 Ponzius Pilatus on 12.01.15 at 2:34 pm

#172 Herb on 12.01.15 at 9:25 am
“Arguments based on extreme positions are failures, by the way. — Garth” (at #168)

Known in logic as reductio ad absurdum and quite legitimate.

Dipper logic. Absurdum. — Garth
————————-
Every forum needs a Devil’s Advocate.
Keeps group think in check.

#196 IHCTD9 on 12.01.15 at 2:35 pm

#126 Big Dipper on 11.30.15 at 10:47 pm

This is Laffer Curve Reaganomics stuff. Wildly popular with the right wing tax haters crowd (confirmation bias), but largely unproven. Let’s look at the tiny tweaks’ to the tax tables the Libs are proposing based on 2015 tables. The changes are preceded by NEW!:

15% on the first $44,701 of taxable income,
22% on $44,700 up to $89,401, NEW! 20.5%
26% on $89,401 up to $138,586,
29% on $138,586, NEW! up to $200,000
NEW! 33% anything over $200,000

These changes are unlikely to have any of the doomsday impacts as indicated above.

I did note that the Libs called the 1.5% rate cut a 7% reduction. I guess Garthian Math is widespread in political applications.
_________________________

The Laffer curve theory plays a role in tax revenue – there is no doubt on this.

Would you show up for work bright eyed and bushy-tailed if 99% of your earnings disappear into tax revenue?

This is where it starts, and it’s easy to see how it plays a role

How about 98%?

95%?

90%?

Still saying no right?

80%?

70%?

Somewhere in between the above two numbers is where most folks think revenues would start to really dive as workers say the hell with it, fake an injury, go underground, get self employed, leave, work 50/50 legit/UTT, pursue extreme tax avoidance strategies, and perhaps even outright just stop paying.

Fact is, even at current taxation levels; many have already partially, or completely hopped out of the feed silo.

I would bet there are already BILLIONS in revenue our various layers of government are not seeing, and haven’t been seeing for years. Tax avoidance measures move incrementally with tax increases, and the cost of living.

You are correct, there will be no doomsday scenario with 2-3% here or there – that is because every increase prior to the new one has already been “priced out” of government revenues by those avoiding paying taxes. They just do a little more again, while other folks have an epiphany and start doing something where they did nothing before.

#197 Pre-Retiree on 12.01.15 at 2:35 pm

apologies if this is a double posting – the other one disappeared….

Taken directly from the Liberal platform (page 10)

https://www.liberal.ca/files/2015/09/The-Liberal-fiscal-plan-and-costing.pdf

“As we reduce the small business tax rate to 9 percent from 11 percent, we will ensure that Canadian-Controlled Private Corporation (CCPC) status is not used to reduce personal income tax obligations for high-income earners rather than supporting small businesses. Michael Wolfson from the University of Ottawa estimates that approximately $500 million per year is lost, particularly as high-income individuals use CCPC status as an income splitting tool.”

And meanwhile, this “transparent” and fair government will cancel Child benefit cheques to “millionaires” – whatever that means – but will allow the wealthy PM to have the taxpayers – you and I – pay for his multiple daytime and nighttime nannies.

#198 Ponzius Pilatus on 12.01.15 at 2:41 pm

Googled the list of Canadian billionaires.
Jimmy is at 4th spot with about 8 billion and climbing.
And he’s 86 years old.
One has to wonder how much is enough.

#199 Ponzius Pilatus on 12.01.15 at 2:45 pm

TSX and Dow are on a Krampus rally.
Beware of Dec 6th.

#200 Mel on 12.01.15 at 3:07 pm

Looks like cutting corporate tax did not do much.

http://www.huffingtonpost.ca/2015/11/29/corporate-tax-cuts-canada-economy_n_8676646.html

https://infogr.am/canadas_corporate_cash_hoard_1990_2015

#201 Shame on us on 12.01.15 at 3:14 pm

Since the Liberals came to power money has been flooding out of the country,

http://business.financialpost.com/news/fp-street/corporate-canada-is-pumping-money-out-of-the-country-at-a-record-rate

The floor for the Canadian dollar is somewhere lower than the Pakistani rupee….which by the way has appreciated against the C$….ain’t you glad you voted Liberal?

#202 Pre-Retiree on 12.01.15 at 3:14 pm

..about income splitting from corporations – there is also this article:

http://www.theglobeandmail.com/report-on-business/small-business/sb-money/doctors-lawyers-concerned-about-small-business-tax-changes/article27480893/

#203 Harbour on 12.01.15 at 3:23 pm

Buy a town for $250,000

https://ca.finance.yahoo.com/photos/town-swett-costs-less-house-202739328/swett-s-d-for-sale-1448932214056.html

#204 Why Why Jay on 12.01.15 at 3:31 pm

@#36 Leslie
Not worthwhile if you make less than 150K? Who told you that? Someone making more than 150K? I make less than 150K (100-150K range for my income) and I take advantage of tax reduction. It more than pays for the overhead of the corporation. I pay less than average for my corporate filings, which helps, due to a friend doing my yearly filings.. means they have regular income to justify a sole proprietorship (so they get legal deductions they would not otherwise get).

I am paid primarily in dividends, and due to how the corp is set up I can issue dividends to my wife (in a different amount) for income splitting purposes. One of my friends just got set up in a similar manner.

Will it work for everyone? No. You definitely want to make sure you don’t end up classified as a personal service corp and lose your small business deduction.

Will the particular savings method work forever? No. Tax laws change all the time. For now my structure saves me money, in the future I may need to restructure or there may be a better way of minimizing tax. That’s why I have a tax geek accountant. We can chat tax over drinks and I’m happy to pick up the bill.

The main difficultly is knowledge. Educate yourself a bit then use the expertise of others. Maybe there aren’t any ways you can save more tax (doubtful), but it’s worth a modicum of effort to find out whether you are leaving money on the table. Assuming you can’t save money without investigating it is thinking like a poor person.

#205 MF on 12.01.15 at 3:32 pm

#134 IHCTD9 on 11.30.15 at 11:21 pm

“Oh well, I wish T2 luck in extracting the cash from all walks of Canadian life. It’s going to be a hell of a job, even with the help of the CBC trying like crazy to get everyone to like him.”

haha it’s hilarious watching the CBC trying in vain to sell this guy off to us. It’s like watching the mother of a single 45 year old man try to pass off her son to eligible girls who see through it all.

http://ca.reuters.com/article/topNews/idCAKBN0TK59V20151201

“OTTAWA (Reuters) – The Canadian government is concerned about a possible backlash against plans to bring 25,000 Syrian refugees to Canada, especially if the public thinks the newcomers were being “pampered”, a cabinet minister said on Tuesday.”

-There is some truthful reporting out there though. Heck, all you have to do is read the comments from any story T2 is mentioned in to realize most people can’t stand him and this syrupy sweet propaganda we are being fed.

MF

#206 MF on 12.01.15 at 3:40 pm

Thanks for the post Garth.

I am no where near a high earner and I am also supposed to be someone who these policies pander to…but I see through it all.

I’m not against paying fair taxes, but I am against the culture of jealousy this country has developed (and was used by The Dauphin as an election ploy.)

I always wanted to one day be one of the 1%. I admire those that are successful and want to emulate them…not punish them, not that these joke policies will do that as we learned from the post.

Wish I had the balls to just get up and go to the US. It’s looking more and more attractive. Still working on that.

MF

#207 Doug in London on 12.01.15 at 3:41 pm

I remember watching some movie years ago where Danny DeVito said: “We’re the modern day Robin Hood, stealing from the rich and giving to the upper middle class”. A remake of that movie is being made right now, and you get one guess who will play that lead character. Now seriously folks, if anyone really wants to be a good Robin Hood, they should be giving those tax breaks to those who really need it like these people: http://www.msn.com/en-ca/news/federalelection2015/middle-class-gets-campaign-attention-as-poverty-looms-in-toronto/ar-AAfBgov?li=AAadgLE&ocid=mailsignout .

#208 Dee on 12.01.15 at 3:43 pm

In addition to tax hikes at the provincial and federal levels, Toronto needs to find $32 billion:

https://www.thestar.com/news/gta/2015/12/01/toronto-city-manager-warns-of-gap-in-budget.html

Councillor Carroll wants a 1% sales tax for Toronto, so 14% here vs 13% elsewhere. Tory just wants to go into deficit, which is…not really an option, given the City of Toronto Act (although sales taxes aren’t either; the province would need to approve either).

All three levels of government are learning that keeping promises costs money. So, break promises or hike taxes…

#209 Vundo on 12.01.15 at 3:48 pm

Trudeau makes a comment during the election about people dodging taxes by setting up corporations for no other purpose. Harper mercilessly mocks this by having real small business owners object to being characterized as tax cheats. Right-wingers readily eat this up and repost it online thousands of times. Now Garth is acknowledging that people are in fact doing exactly that and is encouraging them to do it even more. Seems to me that Trudeau was right all along.

If Trudeau is at all serious about taxing the wealthy, he must already have a plan to dismantle at least some of the loopholes. I would be interested in finding out why anyone thinks he can’t or won’t do this. The one thing I am 100% sure of is that he is not so incredibly stupid as to believe that increasing the income tax rate alone will produce the desired effect. There has to be a bigger plan.

Sure, make it harder for small business – with a 90% failure rate within the first five years – to be even more punishing. Great idea. You ideologues are living in a parallel world. — Garth

#210 Freedom First on 12.01.15 at 3:57 pm

#160 TRT

No. We did not all go through those stages. I was taught the Golden rule while growing up. Treat all people as you would like to be treated, regardless of age, gender, race socio-economic standing, etc. Ageism is as bad, and the same, as racism. Hell, I go through $hit from Dickheads just by choosing the lifestyle of being single and childless for my own safety and freedom. And yet I am a beautiful human being.

#211 45north on 12.01.15 at 4:03 pm

Observer: why not raise the property taxes

in the context of the discussion, income taxes are the purview of the federal and provincial governments. Property taxes are and will remain the purview of municipal governments.

http://beta.merriam-webster.com/dictionary/purview

downtown real estate is intrinsically more valuable but perhaps less so because of the internet. vpn allows you to access your work network from home. There is nothing like a presence at work but commuting is a lot less painful if you only have to drive in four days a week.

The City of Ottawa has a tax deferral program but the total amount of property taxes owed cannot be more than 40% of the assessed value:

http://ottawa.ca/en/city-hall/budget-and-taxes/property-taxes/tax-deferral-program

so if there is a real estate crash ( or gradual decline, whatever ) then the assessed value falls while the property taxes owed stays the same. In the City of Ottawa site, an application has to be made every year and it says that “staff may conduct an annual title search on the property”. So you cannot mortgage your property and defer your taxes.

#212 Ralph Cramdown on 12.01.15 at 4:10 pm

#193 saskatoon — “The US used to be well over this mark during the periods of their greatest growth.” FALSE.

You like posting things that are wrong just to burnish your image? The US hasn’t had a year of 5%+ GDP growth since before Reagan’s tax cuts, but it had a number before then. Look it up.

#213 Balmuto on 12.01.15 at 4:14 pm

September Canada GDP number not so good (worst monthly contraction since March 2009):

http://www.bloomberg.com/news/articles/2015-12-01/canada-emerges-from-oil-slump-with-2-3-3rd-quarter-gdp-growth

#214 S.Bby on 12.01.15 at 4:16 pm

#198 Ponzius Pilatus

Someone posted once :
Live like it’s your last day on earth, but do business like you will live forever”.

#215 Retired Boomer WI on 12.01.15 at 4:18 pm

#177 Retired Boomer WI

Garth-

There are only TWO elements that legislators can control.

1. The level of spending.

2. The level of Taxation.

Yes, it is EASY to promise sunshine, ponies, and unicorns, along with the ever expanding roles government takes on.

No, it is never EASY to increase taxation to accommodate the increased services delivered. (Unless a government chooses to run perpetual deficits, like the U.S.) which is not suggested.

Perhaps governments need a Dept. of ‘NO’ to suggest reductions in spending, a hold-off on new, or expanded spending until better economic times, when they could better afford it.

No one wants higher taxes, and 50% of ones “earned” income seems more than enough. When ‘unearned’ income reaches that point, the wealthiest will also squawk.

Reductions in spending appear easier than increasing taxes don’t they?

#216 noel on 12.01.15 at 4:28 pm

#193 saskatoon
#181 noel

“The US used to be well over this mark during the periods of their greatest growth.”

FALSE.

______________________

?

It is absolutely true and can be verified from several sources including primary ones – namely the BEA and the IRS.

The top tax rate in the US in the 1950s-1970s was between 70% & 90%. GDP growth averaged over 8% over that period.

Since the top marginal rate has been around 40%, GDP growth has averaged less than half of that.

#217 lee on 12.01.15 at 4:29 pm

On BNN Kevin O’Leary says you’d be an idiot to buy a house right now. Must be reading this blog. Or looking to turn people into mutual fund investors.

By the way, if Garth works for a billionaire, what’s his commission/fee for managing the guy’s assets: $10,000,000 a year.

#218 IHCTD9 on 12.01.15 at 4:42 pm

#168 Herb on 12.01.15 at 8:31 am
So, by this reasoning, the key to national wealth and happiness would be to eliminate taxes for corporations and the rich, and let prosperity trickle down across the country.

Corporate prosperity will trickle down in the form of mergers and acquisitions, resulting in more off-shoring, efficiencies of scale in jobs, and shareholder value. Tax savings for the rich will leave them more wealth to invest in more international travel, real estate and luxury goods. What could possibly go wrong with this economic plan?

Sorry, but I have seen no other form of trickle down since Ronnie Reagan proclaimed that doctrine. Must be time to adjust my blinkers from the “leftie” peripheral to the “rightie” across-the-eyes position.
___________________________________________

In RR’s time, trickle down was a valid concept. Now, it is a Global economy, and the rules have changed.

The idea that trickle down doesn’t happen at all is bunk, but it is true that huge massive multi-national corporations have options that smaller land-locked corps do not have. Can’t really blame them for exercising them either.

Although, Trudeau’s plan of taxing the wealth of citizens to an ever greater degree via a horribly timed, multi year spending spree on ideology makes Reaganomics look downright futuristic.

The reality no one in politics really wants to touch, is that outside natural resources, Canada is just not competitive in making things other countries want, and can afford. Out side of oil, ore, potash, alloys, timber, etc.. we’ve got squat. Ontario used to offer a high tech manufacturing mecca, but now it too has priced itself out.

The real problem is – while having their costs of doing business pushed up, manufacturers have set up in places where we just have no chance of ever getting it back, the infrastructure is done, the wages are dirt cheap, and the government is pro-business (elsewhere).

Trickle down does work, but not such a sure bet when it comes to multinational corps who have an international presence. TD will be having less and less benefit as long as big corps continue to bail out of Canada.

At this point, Trudeau should be more concerned with what comes after private sector manufacturing and the demise of organized labour. Anything of any consequence will eventually be leaving for greener pastures, or take a pass and just close up – where’s the tax revenue going to come from then?

Canada is getting kicked to the curb in the global competition for your hard earned dollar – pretty much that simple. The money is just largely trickling down to some other part of the world instead of staying here.

#219 Alberta Ed on 12.01.15 at 5:05 pm

I strongly suspect that T2 is taking advantage of every tax advantage available: TFSA, RSPs, ESPs, not to mention the dividend-paying small corporation he funneled his speaking fees through so he could reduce his taxes.

#220 espressobob on 12.01.15 at 5:22 pm

Kevin O’Leary also said, he’s 38% cash and the rest in corporate bond as an investor. Has not a clue what to invest in. Really? And this dude runs a mutual fund company?

Maybe he should give Garth a call.

#221 Ralph Cramdown on 12.01.15 at 5:27 pm

#204 MF — “Heck, all you have to do is read the comments from any story T2 is mentioned in to realize most people can’t stand him and this syrupy sweet propaganda we are being fed.”

If you think internet comments are broadly representative of the population’s views on any particular issue, you must have an incredibly warped view of humanity. This cesspool is bad enough, others are far worse. Yet when I walk out my front door, society is still functioning, and people are still generally polite, even here in the big smoke.

#222 Randy Randerson on 12.01.15 at 5:37 pm

#219 espressobob on 12.01.15 at 5:22 pm

Nope, Kevin O’Leary doesn’t run a mutual fund company. He’s merely lending his name out to another firm, the name which escapes me. You can read his fund’s prospectus.

#223 Fred Murtz on 12.01.15 at 5:42 pm

Our Clown Prince Poloz is as likely to lower rates as his plan to crush the loon is going his way…for reasons other than he calculated….but what the heck eh….the trend is your friend…..and the market obviously thinks this goofball could do something stupid…wouldn’t be the first time. And whats he going to say when he puts hi Hollywood hat on for the camera’s….he’s always camera gooning and says crap that it entirely insane. Which is why the prefs and the like CPD and ZPR continue to sink like a stone.

On an upnote….the seasonal market is positive for the TSX and we’re seeing a good run the past week. Individual stocks have outperformed…..makin’ some serious bacon.

#224 eddy on 12.01.15 at 5:50 pm

http://skeptics.stackexchange.com/questions/27982/was-the-word-racist-coined-by-trotsky-in-1927

The word racist was a linguistic invention of Leon Trotsky Bronshtein.

#225 X on 12.01.15 at 5:56 pm

re #208 – yeah, his bigger plan was to get himself a promotion by rallying the misinformed against the ‘rich’ and getting as many votes as possible….lol.

#226 AfterTheHouseSold on 12.01.15 at 5:56 pm

#217 IHCTD9
“Canada is getting kicked to the curb in the global competition for your hard earned dollar…”

So sad but so true. Good post.

#227 MathMan! on 12.01.15 at 6:07 pm

By my math:

$4.8 billion in lost tax revenue from the 33% (35.16 million Canadians x 33% x $8/week x 52 weeks)

– $2.6 billion in additional tax revenue for the 1%

= $2.2 billion floating around in the economy

That’s a pretty significant chunk of change to throw into our apparently now post-recession economy. Sneaky economic stimulus plan? I know lots of 1%ers who voted for JT, maybe this is why.

Only 9 billion people will get a tax cut, not 35 million. — Garth

#228 old gringo on 12.01.15 at 6:09 pm

Hats off to Mark Zuckerberg and wife for announcing giving charity 99% of Facebook shares over lifetime.
Merry Xmas gift that will keep on giving.

#229 John Dimas on 12.01.15 at 6:11 pm

Canadian and U.S. bond yields are dropping fast and the fake Fed rate increase was just to confuse people.

We are going back to January-2015 almost Japanese type levels on government bond yields.

They were low as 1.83% for 30 year Canada, 5 year 0.49%, 10 years 1.23% at that time.

Current odds of a rate increase on December 16th: 74%. — Garth

#230 Only-inflation-to-reduce-debt-burden on 12.01.15 at 6:19 pm

oops

#231 Vancouver in the RearView on 12.01.15 at 6:36 pm

“Well played, Mauer,” says the polar bear.

http://www.urbandictionary.com/define.php?term=Well+Played%2C+Mauer

(Seriously, no one noticed the Joe Mauer t-shirt?)

#232 Nagraj on 12.01.15 at 6:40 pm

Re “Krampus rally” coined by #199 PONZIUS PILATUS

In the 1950’s they made wine in the Traisviertel, Lower Austria, just like they did in the 1850’s.
On Dec. 6th St.Nick and Krampus would roam the countryside TOGETHER! (Krampus being the Devil.)
They’d come into your house and ask if you’ve been naughty or nice.
Krampus had a big deep wooden grape-picker’s bucket on his back, and if you were bad, he’d chuck you in it and carry you off back to Hell.

I was three or four years old, and they came in, and Krampus decided to take me!

I cried and hid under the kitchen table. I remember this very well.
Luckily my father intervened. I’ve been proud of my Dad ever since.

My Mom wasn’t in on this because she was gettin’ the Stamperl (shot glasses) and the Schnapps or Slivovic. Ya have to give both of them liquor when they show up.

Kindly note that St. Nick and the Devil is drinkin’ buddies.
There are vast cultural implications – things is nowhere near as black/white, cut ‘n’ dried, as some of yas New World types like to believe.

#233 Squirrel Soup on 12.01.15 at 6:41 pm

#225 MathMan! on 12.01.15 at 6:07 pm

By my math:

$4.8 billion in lost tax revenue from the 33% (35.16 million Canadians x 33% x $8/week x 52 weeks)

– $2.6 billion in additional tax revenue for the 1%

= $2.2 billion floating around in the economy

That’s a pretty significant chunk of change to throw into our apparently now post-recession economy. Sneaky economic stimulus plan? I know lots of 1%ers who voted for JT, maybe this is why.

Only 9 billion people will get a tax cut, not 35 million. — Garth
———–
T2 gave the whole planet a tax cut!

#234 robert james on 12.01.15 at 9:22 pm

Calgary Report November 2015 Calgary Real Estate Market Report
Posted on December 1, 2015 | Leave a comment
creb

Download CREB®’s December 2015 Report: click here pdf

CREB® commentary: Weak sales activity relative to inventory places downward pressure on prices.

Persistently high inventory levels within Calgary’s residential resale housing market, combined with weak sales activity, contributed to buyers’ conditions in November.

Monthly sales totaled 1,263 units, a 28 per cent decline from last year and nearly 20 per cent below the 10-year average. Meanwhile, the amount of new listings in the market increased by five per cent over last November, and moved five per cent above 10-year average.

The combination of both soft sales and elevated listings caused months of supply to rise above four months. It represents the third consecutive month that housing supply in the city has remained near four months, which is an indicator that supports buyers’ conditions.

“The housing market is reflecting the realities of the economic conditions,” said CREB® chief economist Ann-Marie Lurie. “Calgary has continued to post job losses in the energy sector, unemployment levels are high, wages are down and recovery expectations have changed. All of these factors have contributed to the weak demand we have seen throughout the year.”

CREB® president Corinne Lyall pointed out that inventory levels still remained 27 per cent below the November highs recorded in 2008.

“Furthermore, price declines have not been as steep as those recorded during the last downturn,” she said.

The unadjusted benchmark price in November declined to $450,700, a 0.5 per cent drop compared to last month and two per cent from last year.

Calgary’s detached housing sector faired the best in November as months of supply increased to only 3.4. Nonetheless, the unadjusted benchmark price declined by 0.6 per cent compared to October, and 1.52 per cent from November 2014, to $510,700.

In the attached category, buyers’ conditions emerged as months of supply increased to 4.8. As a result, the unadjusted benchmark price declined to $352,400, a 0.5 per cent drop from last month and 1.5 per cent from last year.

The apartment sector continued to be the hardest hit of the three sectors. Months of supply increased to 6.9 in November, causing benchmark prices to slide 0.5 per cent from October to $287,000. Meanwhile, year-over-year prices were off by 4.6 per cent.

Despite weaker absorption rates for most of 2015, residential benchmark prices have only recently started to decline – while average and median prices have dropped more dramatically. Lurie attributed that to slower activity in the higher-priced segments of the market, which can skew average and median prices.

Benchmark prices represent changes for similar-type homes, minimizing the impact caused by changes in distribution.

“It is not a surprise that the average price has recorded a steeper decline than the benchmark price,” she said. “Last November, detached sales in the city over $700,000 totaled 159 units or 15 per cent of the market sales. This November, there were only 103 sales representing 13 per cent of the market sales.”

Lyall said knowing the difference between indicators such as average, median and benchmark prices is important for sellers.

“There is no question that this can be a challenging market,” she said. “However, because of these circumstances there is a greater need for market intelligence.”

SHARE THIS:

#235 The Great Gazoo (AKA Rainmaker) on 12.01.15 at 9:25 pm

Here is a bloomberg interview with Doug Terreson (Evercore) on his expectation that oil prices will improve in 2016. 5 minutes long, but well worth a listen.

http://www.bloomberg.com/news/videos/2015-11-30/why-oil-prices-may-be-near-a-bottom

#236 stats freak on 12.02.15 at 1:31 am

Can hardly wait for the new CPP increase. I am self employed and already have to pay both “employee” and “employer” portions, so another $1,000 estimate will mean $2,000 for me @#%$&*! [email protected]#$%^&!!
Maybe I should just go on welfare, I might actually come out further ahead!

#237 busman7 on 12.02.15 at 8:17 am

#236, if you’re self empolyed you have to pay NO CPP however it’s a good idea to pay up so you can collect more at age 60.

#238 zentao on 12.02.15 at 9:01 am

I expect Canuckistan will soon follow Greece’s lead on taxes.

“Cash ‘under the mattress’ totaling more than 15,000 euro, jewelry and other valuable items such as diamonds and gemstones, should be declared to electronic system of tax authorities, Taxisnet, as of 1. January 2016. Next to properties and vehicles and shares, now the taxpayers will also have to declare their deposits. And not only that. They will have to fill if they rent bank lockers and if yes, also the name of the bank and the branch, even if abroad”

http://www.keeptalkinggreece.com/2015/12/01/greeces-taxpayers-must-declare-all-assets-like-cash-under-mattresses-jewelry/

Expect strong moves towards a cashless society where every transaction can have the appropriate tax added to it…