Rigged

Three weeks to go. April the thirtieth. Pay your taxes. What a dandy time to reflect on the greatest economic event of our lives. The income gap (as opposed to the wealth gap).

Yes, the pooch-infused GF household does okay. In 2018 I surrendered half what I earned to the government, still leaving enough for geriatric dog food, joint medicine, canine eye drops, ear medication, shots and vaccinations, boarding, dog painkillers, flea/tick pills plus vet bills including X-rays and surgery. Did I mention the $130-a-bag Rx chow? The tax rate for higher-income earners is now over 50% in seven provinces, and close to that in the rest. As you know, the T2 gang’s first act was to slap a new surtax on the 1%ers (above $206,000), which takes another $1.5 billion from the 274,000 people in this category.

(By the way, the average Canadian 1%er is 53 years old, married and earns $307,000 a year. There’s an 85% chance this person is a man. With a spouse. And dog.)

While giving up half your income sucks, nobody weeps for these folks, even though they pay a disproportionate share of the national bill. What’s causing headlines – and political unrest – is the yawning divide between this relatively small group and the rest of society. This is the birthplace of populism. It’s why we have Trump, plus populist movements in France, Britain, Germany, Italy and elsewhere. Lots of people look at the income gap, conclude the system is rigged against them, and vote for people who say they’ll burn it down.

Why the big gulf between what average families make ($71,000) and the others? Lefties think it’s because we exported too many jobs to low-wage countries, so guys can’t support their families any more by making hub caps or dryers. That’s probably true. AI, robotics and automation have eliminated a ton of skilled positions (but created others). Unions are weak and croaking. Corporate pensions are waning, and we seem to have developed a gig economy. It’s complicated.

Politicians have tried to address this by raising taxes on the thin ranks of high income-earners (T2), hoisting the minimum wage (Ontario), giving tax-free money to families (Canada Child Benefit), cutting back on tax shelters (TFSA), whacking the self-employed (no income-sprinkling), subsidizing real estate (equity-sharing mortgages) and mulling a universal income plus new taxes on investments and inheritances. In the US, Trump populism ended up lowering taxes, starting a trade war, sealing the border, draining the swamp and promoting America-first. Clearly politicians are making this up as they go.

Has capitalism failed? Big hedge fund dude Ray Dallio has suggested so (he’s worth $17 billion), saying that without reform there’ll be conflict reminiscent of the 1930s – when ‘strong leaders’ (you know who) emerged to create order from chaos.

Many worry that without reforms of some kind society’s destined to devolve into a war between classes, between developed and emerging economies and between generations (people get wealthier as they age). More income disparity = more social unrest = more populism. Financial stress and anger make people do extreme things, vote for ‘none of the above’ and want instant change. As mentioned yesterday, all this emotion is often a substitute for taking personal action to change things. We all have the same tools for making, keeping and growing money. But when you expect your first house to be better than your parents’ last one, want new wheels plus two vacas a year and get pickled in debt to grab them, you’ve rolled the dice. Don’t expect a vote will fix such recklessness.

Social advocates (like Jagmeet and AOC) say we need more Robin Hood economics, Hoovering the rich and distributing their wealth to the less rich. Righties like the Fraser Institute recoil at that. “Taxes cannot be continually raised on top income earners without economic consequences,” it argues. “Higher tax rates would further erode Canada’s tax competitiveness, discourage economically productive activity, hinder the country’s ability to attract and retain top talent, and dampen the incentives for income mobility. Once that happens, everyone is hurt, particularly those, ironically enough, whom the misguided policies are intended to help.”

Meanwhile a survey by Canada’s accountants suggests that outside of four major cities (Toronto, Montreal, Calgary & Vancouver) the income gap doesn’t really exist. The trouble is 40% of us live there, trapped in high-cost environments where six-figure incomes can’t finance a house.

So there’s no fix for this. Progressives will keep hiking taxes until something breaks. Populists will take us down a stormy path to nationalism and conflict. Millions of people looking at governments to even out wealth will be disappointed. They cannot and won’t do it. But politicians will lie every inch of the way. Surely you have noticed.

The income gap will not be narrowed. No more than the gender gap. Not in this lifetime. But you are completely free to change things in your own world, and that of your family. Tomorrow and each new day we will talk about that. In the meantime, dammit, Bandit gets a job.

219 comments ↓

#1 Sebee on 04.08.19 at 4:29 pm

Garth,

The start to this week’s blog sure doesn’t make a case for dog ownership. I need to invest just to be able to afford that Vizsla I was gonna get myself…as a retirement gift.

#2 Vancouver Real Estate Update on 04.08.19 at 4:30 pm

NEW CONDO PRICE REDUCTIONS IN LANGLEY

At first Greater Vancouver’s housing price correction basically affected properties at the upper end of the market. But now the lower end of the market has joined in the fun.

It’s official – Vancouver’s property price correction is market-wide.

Murrayville House in Langley: “Prices dramatically reduced on all remaining (new) homes. Savings of up to $60,000.”

Of course this was never supposed to happen. And the market will prove that this is only the beginning of a much bigger price correction for the entire market.

GREATER VANCOUVER: WHERE THE PARTY WAS NEVER SUPPOSED TO END

When house prices were rising in Vancouver realtors there swore the party would never end. They guaranteed the region would produce higher prices year after year and that Vancouver’s property gravy train was unstoppable.

And of course the media was all over it, publishing realtor FOMO (verbatim) as though it were fact. Their message: buy now or be priced out forever. Their proof: recent price gains meant higher prices year after year.

Then, suddenly, prices at the upper end of Vancouver’s property market began to fall. Of course that wasn’t supposed to happen.

The industry then directed its FOMO at the middle to lower end of the region’s market. Their new message: demand has shifted to the lower end of the market. This means condo prices will skyrocket. Buy a condo now before you are priced out forever.

And now it’s clear that condo prices are falling. Indeed prices are falling across the board in the region – from the most expensive to the least expensive properties.

And of course none of this was supposed to happen.

This is too easy. The industry’s next message will likely be something like: The price correction is over. Prices will skyrocket again. Buy now or be priced out forever.

I’ll be laughing (again) when the market proves them wrong (again). Vancouver’s major price correction will continue until prices fall back to their long-term price to income ratio. And prices will have to fall a lot more before that will be the case.

200 years of housing bubble history stands behind this. And there is no fact-based argument to counter history’s guarantee.

Continued…

#3 I work for Morneau Sheppell on 04.08.19 at 4:38 pm

You should have consulted with Morneau Sheppell if you wanted to lower your tax rate. After all, one of the partners, Morneau, is the Minister of Finance and the spouse of the McCain heiress.

#4 Vancouver Real Estate Update on 04.08.19 at 4:38 pm

Housing markets with extreme overvaluation always meet the same basic/general fate – a major price correction/reset that naturally brings prices back down to a level where long-term housing price gains once again match long-term income gains.

History’s (guaranteed) message: There will be a bad ending for those who ignored the bubble and bought near the peak.

On the contrary there will be a good ending for those who ignored the industry’s hype and refused to buy at extreme price levels. History shows that those who wait out the bubble are always rewarded with years of opportunity to buy a property at a fraction of the cost – with maximum price appreciation potential.

And that’s something you can actually bank on.

THE BUBBLE ENDING

The 2006 US bubble experience demonstrated what happens with house prices in bubble cities. It also showed what happens with house prices in non bubble cities.

And this can be applied to any housing bubble anywhere in the world and at any time in history.
US CITIES – PRICE DECLINE (%) (after 2006/08):

BUBBLE CITIES: (Vancouver’s bubble is massive compared to San Francisco’s bubble 2.0 (second chart))

* San Francisco, California (-45%)… (in 3 short years)
* San Diego, California (-42%) * Phoenix, Arizona (-56%)
* Miami, Florida (-55%) * Los Angeles, California (-41%)

NON BUBBLE CITIES:

* Shreveport, Louisiana: (-1%) * Fargo, North Dakota: (-2%)
* Pittsburgh, Pennsylvania: (-2%)
* Davenport, Iowa: (- 2%) * Texarkana, Arkansas: (- 2%)
* Amarillo, Texas: (- 2%) * Cedar Rapids, Iowa: (-2%)
* Oklahoma City, Oklahoma: (- 3%)
* San Antonio, Texas: (- 4%)
* Lexington, Kentucky: (-4%) * Little Rock, Arkansas: (-4%)
* Wichita, Kansas: (-4%) * Sioux Falls, South Dakota: (-4%)
* Austin, Texas: (-4%) * Omaha, Nebraska: (- 5%)
* Tulsa, Oklahoma: (-5%) * Louisville, Kentucky: (-6%)
* Indianapolis, Indiana: (-7%) * Des Moines, Iowa: (-7%)
* Jackson, Mississippi: (-7%) * Madison, Wisconsin: (-8%)
* Nashville, Tennessee: (- 9%) * Columbus, Ohio: (-10%)
* Dallas, Texas: (-11%) * Cincinnati, Ohio: (-11%)
* Springfield, Missouri: (-11%) * Kansas City, Missouri: (-12%)
* St. Louis, Missouri: (-12%)

(Sources: Case-Shiller Index, All-Transactions House Price Index)

#5 Reality is stark on 04.08.19 at 4:41 pm

As long as we let public servants control the agenda, we will continue to transfer wealth to them and they in turn will influence the majority to pay more tax.
In this country we don’t realize that public servants are hired to serve the majority.
Somehow they have been able to circumvent the laws of supply and demand for labour.
After 2008 we should have negotiated a significant reduction in public service wages but we were too weak as a nation.
Pay more tax and shut up.
The sunshine list is a reminder of what we stand for as a nation. It’s what makes us the laughing stock to the rest of the world.

#6 Ryan on 04.08.19 at 4:46 pm

It’s going to get worse as we continue to vote for policies that tax climate (and all we get is a communist redistribution policy), continue to destroy the energy industry in the west (oil companies are packing up and leaving Canada), and the recession beats on….and people wonder why they have no jobs or money left for that Mexican vaca…

#7 West Slam on 04.08.19 at 4:49 pm

1144 Ottaburn Rd in West Vancouver was assessed at $2.87M in 2018 and $3.44M in 2017. It probably could have got close to $4M in Spring 2016. It was listed close to $3M 115 days ago and sold for … wait for it … $1.75M.

That sets a whole new price bar for West Van. Their neighbors cannot be happy. Unfortunately that’s how it works though.

#8 Penny Henny on 04.08.19 at 4:51 pm

Yes, the pooch-infused GF household does okay. In 2018 I surrendered half what I earned to the government, still leaving enough for geriatric dog food, joint medicine-GT

You mean medical marijuana

#9 Smoking Man on 04.08.19 at 4:54 pm

Lots of John Gaults in The USA.

Money and Brains flee whenever the theiving face of socialism takes its mask off.

Ontario Schools are full of communist teachers and activist students. Not going away, and will get stronger.

If your a 1% er. Get the hell out while you still can.

#10 Jay Currie on 04.08.19 at 4:54 pm

The interesting thing about both the egalitarians and the populists – as well as the current Canadian government – is that they are all about how to cut up the pie rather than making the pie larger. (Although Trump seems willing to expand the US economy.)

Canada has all sorts of resources but we don’t seem willing to use them. How could we have missed the offshore market for our natural gas? Why are we not building nuclear reactors – big and, more importantly small – to power the North and the Prairies? How can it take decades to actually permit and licence a mine?

Rather than redistributing a largely fixed national income, why not try to increase that income? The idea of economic growth seems to have disappeared from political discussion.

#11 Sebee on 04.08.19 at 4:55 pm

Garth,

The unrealistic expectations you highlight of having a better first home than parent’s last, premium gasoline demanding car, and all the rest go hand in hand with wanting everything from our government when there clearly is no means to pay for it.

Grand plans of working for the people are foolishness. Politicians can only hope to get something for themselves out of it before inevitably losing their gig.

Living in debt is all governments and the 99% can hope for.

Where does all this living on debt for individuals and governments end? Who knows? I doubt that it ends with the debt being repaid.

#12 JacqueShellacque on 04.08.19 at 4:55 pm

Desire for equality of outcome over an entire society is the single most insidious and damaging idea in human history. We’re raising a generation (or maybe 2 or 3) that believe anything they want right now is an entitlement, to be demanded, and provided without regard to consequence. This is a revolutionary idea in the West, and we know how revolutions tend to work out.

#13 Mike in Calgary on 04.08.19 at 4:56 pm

Interesting comments. I remember being 21 or 22 years old wondering how am I ever going pull off buying a house, car and all the trappings of adulthod. It’s really hard getting established in life. It took me years. Almost 30 in fact with lots of setbacks. I guess I’m a 1%’er now, but I sure don’t feel rich. I still have to go to work every day to keep the wheels from falling off.

#14 Bob on 04.08.19 at 4:58 pm

Garth, the marginal tax rate is above 50% in seven provinces, but that does not mean you hand over half your before tax income (as you well know). I’d appreciate a little more honesty from you on this. You’re contributing to widespread misunderstanding of the difference between marginal and effective rates. In order to have an effective income tax rate of 50% in Ontario, for example, you need an income of over $1 million.

#15 Linda on 04.08.19 at 4:59 pm

Garth correctly points out that expectations far exceed income for most. Those who do not wish to wait do indeed take on more debt than they can afford. Problem is they blame others for their own decisions & vote for those who promise they can have their cake & eat it too.

As for Bandit, I think he already does an exceptional job of providing companionship, plus he is one good looking pooch. Maybe he could moonlight as a model for the RX dog chow:)

#16 Parksville Prankster on 04.08.19 at 5:05 pm

… the obvious solution for many in Edmonton, Alberta is to vote NDP. Apparently, up to 1/3rd of the employed people in that city are also working for some level of government.

https://edmontonsun.com/2017/07/05/notley-government-propping-up-alberta-public-sector-while-private-sector-suffers/wcm/3f048e41-9da2-48f7-bef8-2583b2ca232d

#17 NoName on 04.08.19 at 5:09 pm

Hey farts, my boy ave found inexpensive solution for your silica problem.

https://youtu.be/uy3lZqQ7PHM?t=617

#18 Eco Capitalist on 04.08.19 at 5:10 pm

“Populists will take us down a stormy path”

A ha ha ha ha! I see what you did there!

#19 yycnotretired on 04.08.19 at 5:14 pm

#14 – bob,

I’m willing to bet garth does pull in 7 figs, so you have a moot point?

#20 BlogDog123 on 04.08.19 at 5:14 pm

Imagine all those Canadian folks who acquired Information Technology skills in the 1990’s, tried their best to keep up-to-date, yet had their jobs outsourced to India anyway (banking, finance, etc…). Accept a lesser local job for less pay or uproot the family and move. IBM now has 50% of their IT payroll in India.

Would you tell you kids to become software programmers, only to have these once lucrative, skilled and high-paying jobs get easily shifted to another office halfway around the world?

The most under-reported story of the last 15 years:

The outsourcing of jobs, even to local agencies, has knee-capped the bargaining power of the once full-time employee. By outsourcing jobs to temp agencies, keeping folks on 2 year contracts, the average Joe can’t get ahead and move up. The temp agency has no power with the employer, thus the employee has no power with the temp agency to improve their lot. Contract law from employer to agency is stronger than employment law when the agency can’t offer a better wage to their transient employee.

#21 MF on 04.08.19 at 5:16 pm

#5 Reality is stark on 04.08.19 at 4:41 pm

You clearly didn’t read the article. No surprises, of course.

But the “wealth gap” is complicated with its origins in the advent of AI/automation, globalization, and an aging population above all.

Your assertion that “public servants” are to blame sounds like a useless scapegoat.

MF

#22 Barb on 04.08.19 at 5:17 pm

“…plus new taxes on investments and inheritances.”

——————————————-

Inheritances?
Received an inheritance last year and accountant just completed our income taxes. (Sssshhhh! Nada due on the inheritance).

Accountant knew about the inheritance…so did he goof?

Maybe I’m blessed.

#23 don on 04.08.19 at 5:17 pm

The income gap is simply a function of the monetary system that needs constant expansion. The 1% are better positioned to use/abuse this credit and rent it out to the 99 %. If we had a system where true capital formation through savings were fostered i think the gap would narrow. Of course in the process of getting there the present system would have to implode on itself. I think it will happen anyway i’m just not sure when. In the meantime we have to play the cards that we are dealt.

#24 Randy Hillberg on 04.08.19 at 5:20 pm

Taxes are boring. In other news,

OMG!!!! What happened to Faith Goldy’s free speech to incite violence and Neo-Nazi genocide against immigrants and Andrew Scheer’s rights to defame Justin Trudeau?

Free speech is under attack by the Liberals! Muh Justin Trudeau takes my tax dollars and I HAVE FREE SPEECH!

https://www.buzzfeednews.com/article/janelytvynenko/facebook-bans-faith-goldy-canadian-white-nationalists

Good riddance that Andrew Scheer’s supporters are being reprimanded for inciting hatred via Faith Goldy.

#25 BC_Doc on 04.08.19 at 5:23 pm

I’m a married doc in my early 50s. I regularly slog away my evenings, nights, weekends, and holidays in the ER. I’m the Ant— I’ve worked hard, lived within my means, saved and invested since finishing my residency close to two decades ago. Since completing my training, my spouse and I have income split (still able to do so as she is a healthcare professional who did contract work that was deposited into the corp). We’ve each lived off approximately $80k per year/$160k total as this was the sweet in our province in terms of not getting killed by hitting the next marginal tax bracket. Because of diligent savings and investing, we’re now at the point where we could both dial things down and live off of our passive investments. Any future work (the real kind) is just going to knock us into a higher bracket. I have no plans to quit (due to work ethic) but the incentives are clearly there telling me I’m a fool if I keep working hard. Unintended consequences… Canada is short MDs— tax policies which encourage folks like me to walk off the court early need to questioned. Unfortunately, the trust fund boy and his friend Richie Rich will carry on with tgeirctheme of class warfare.

#26 just a dude on 04.08.19 at 5:24 pm

Garth,

Two particularly awesome posts in a row. Thank you Sir!

Imagine how much further ahead we would be as a society if more of us took responsibility for ourselves and for our actions.

Of course we must help those in need amongst us when needed. This is what a civilized society must do. But there are limits. Surely, those who have decided to take on stupid amounts of debt to keep up with the Jones’ have breached these limits. The fix is easy: don’t spend money you don’t have on things you don’t need. Period.

#27 Guy in Calgary on 04.08.19 at 5:25 pm

Is I get older, the nice flashy things become less important, not that they were ever that important to me to begin with but I digress.

If your happiness is linked to your income, you’ll never be happy because it will never be enough. When I get older and start looking back, it will be the experiences that will make me smile not my MTR or rate of return. Life is about balance.

#28 Mike on 04.08.19 at 5:27 pm

.
We want our home equities bump NOW!!

So, we want drug money laundering NOW!!

So, we want Kristy Clark back NOW!!

#29 Rick on 04.08.19 at 5:28 pm

“But politicians will lie every inch of the way. ”
I agree.

#30 MF on 04.08.19 at 5:28 pm

#9 Smoking Man on 04.08.19 at 4:54 pm

“Ontario Schools are full of communist teachers and activist students. Not going away, and will get stronger.

If your a 1% er. Get the hell out while you still can.”

-I’m guessing you haven’t spent much time on US college campuses lately?

If you think our system is communist, I’ve got some real bad news for you..”

MF

#31 ZERO. 0. Nada. None. on 04.08.19 at 5:31 pm

Oh, so news out of BC today is that there has been no money for federal policing in British Columbia for financial crime investigations. Will Ottawa please start to invest in BC? Canadians in BC deserve the benefit of the rule of law and protection too.

German points to loss of dedicated fin crime teams around 2013, move of resources to anti terrorism, as reasons for lack of federal funded AML officers.

Look at the real estate price charts in BC and connect the dots here: 2013 was when real estate in BC turned a corner for some of the biggest price discovery/gains in history that peaked out in 2016/17.

#32 Calling it. on 04.08.19 at 5:32 pm

Public inquiry on route. This has BC Liberals written all over it and you know the timing of the inquiry will come at the precise time to do the most damage to the BC Liberals ensuring they are not elected.

Grab some popcorn. This is going to be a good one.

#33 Yukon Elvis on 04.08.19 at 5:33 pm

The beacons are lit! The West will answer! Muster the Rohirrim !! Tonight the Men of Westernesse will ride East to Mordor and crush the Dark Lord in his Tower. For Freedoooom !

#34 Randy Randerson on 04.08.19 at 5:33 pm

>Yes, the pooch-infused GF household does okay

For a minute I thought you meant your girlfriend’s household, then I realized it stands for Greater Fool.

No doubt politicians want to tear high income people down, thus I’m planning my exit to a jurisdiction with lower tax.

#35 Captain Uppa on 04.08.19 at 5:34 pm

Where do you people find these Audi hoarding, Property Brothers forever home loving “kids” that have a better home than their parents?

The truth is that life is vastly more expensive now than it has ever been and wages have not kept up, not even close.

Mortgage/rent, food and transportation (car or public) are the big three. Then add kids and it’s tough. Please no “it was tough in my day” speeches, it was never easy… we all know that.

Clearly “The Poor Engineer” didn’t open any minds on this forum. I’m surprised no one accused him of having an avocado toast addiction.

#36 Long Branch Apprentice on 04.08.19 at 5:35 pm

Smokey tried to tell you people, but you just wouldn’t listen. There are avowed Marxists behind the scenes pulling the strings.

https://www.osstf.on.ca/about-us/what-we-stand-for/social-justice.aspx

But when you expect your first house to be better than your parents’ last one, want new wheels plus two vacas a year and get pickled in debt to grab them, you’ve rolled the dice.

You nailed it there Garth, most young people are pretty well hooped, unless they get a sizeable inheritance, WHICH, many boomers have already squandered in the form of a HELOC.

https://www.youtube.com/watch?v=0DxWBXOZ9PM&t=121s

JBP eloquently explains, perhaps, why the income is growing so rapidly. And no, it’s not the only cause, so don’t @ me.

Peace.

#37 MF on 04.08.19 at 5:36 pm

#12 JacqueShellacque on 04.08.19 at 4:55 pm

-Not entirely a bad thing. Let me explain:

The boomers’ parents fought in WW2. After the war was over, they wanted to give everything to their families. Their babies were coddled and given all the opportunities to thrive. The boomers grew up in a period of post war expansion. Yes there were some hickups, but they generally had good opportunities.

Then they had kids (we millennials, gen x and y).

We grew up watching our parents go to school, get jobs and start careers, buy houses (profit handsomely), and start families.

Now that we are older, having been lucky enough to never experience war like our grandparents did, and having watched our boomer parents achieve success…it’s only natural for us to try to mimic our parents.

This is no one’s fault. It’s just that the wealth gap is being created by outside forces (automation, globalization, demographics).

I don’t blame younger generations for wanting homes and cars. This is what peacetime is all about.

MF

#38 Vancouver Real Estate Update on 04.08.19 at 5:36 pm

Isn’t Bandit already a part of the security team at the Bank of Garth?

#39 yvr_lurker on 04.08.19 at 5:38 pm

I have much respect for people who now have a large income from their own initiative, either through years of schooling to get some advanced skills, building a business from the bottom up etc. If they are now reaping in the benefits of their hard work and effort all the good. There is a limit though on how much marginal tax is imposed; and 50% at 206K is certainly near the threshold.
However, I have zero respect for corporations who hide assets overseas from some loopholes avoiding paying their fare share (all the file off-shoring many jobs in IT etc..), from corporations seeking Gov’t bailouts when they go astray (Bombardier, SNC, cars), from the rampant corruption of indviduals finding loopholes to flip and speculate on properties, money launderers, tax cheats (satellite families, Panama types), and rich foreigners buying up and flipping houses in our major cities, making things more unaffordable. I am not a fan of this type of “globalism”, which is mostly parasitic in nature.
Make it a more level playing field for LOCAL people and let everyone have some chance to get somewhere through their own hard work and initiative. Super-difficult for high-achieving people in YVR say to get ahead, paying their 50% marginal, when someone from overseas paying a flat tax rate of 15% (i.e. Hong Kong) or China to snap up condo towers, and bidding SFH through the roof. Close the border to this type of activity please. If this is xenophobic I don’t give a *&(**^&.

#40 Leo Trollstoy on 04.08.19 at 5:41 pm

If you make $300k from a job you’re part of the Working Worried

If you make $300k passively, you don’t care what they call you

#41 Textbook Canadian Leadership on 04.08.19 at 5:41 pm

Regardless of what happens, poor leadership and the dirty money saga is going to flat-line real working people who bought into the hype (it is already happening). Those who didn’t have already been punished and/or moved away from Vancouver for good.

Thanks to all of this drama unfolding in BC (or rather becoming mainstream) dirty money is setting its sights on Ottawa and Montreal right now.

But don’t worry East Coast, Vancouver style home prices is good for the economy and you will love how it transforms your society.

#42 SunShowers on 04.08.19 at 5:42 pm

“Meanwhile a survey by Canada’s accountants suggests that outside of four major cities (Toronto, Montreal, Calgary & Vancouver) the income gap doesn’t really exist.”

————————

I was curious, so I looked at the study. The numbers they use to report income distributions specifically exclude capital gains. Why on earth would those be excluded? Capital gains are a HUGE part of income inequality. Seems to me that the whole study is bogus because of this.

#43 The real Kip (Ret) on 04.08.19 at 5:42 pm

None of the above will come to pass politically in Canada. Worst case scenario for politics in Canada is we throw the Libs under Trudeau out and put in Scheer with his Cons. Those two are so close to the centre politically they might as well be twins.

Does anyone really believe the Cons under Scheer will reverse current taxation rules brought in by the Libs? If yes, I have a bridge I’d like to sell you.

#44 Dusty on 04.08.19 at 5:42 pm

Bandit, how dexterous are your paws? Have you thought about being a refrigeration mechanic? 100k a year after a four year apprenticeship! that’s more than an engineer with 10 yrs experience.

#45 GreaterFool on 04.08.19 at 6:15 pm

“…and between generations (people get wealthier as they age).”
Not if they are millennials, they get pooer and homeless as they age.

#46 E Scott on 04.08.19 at 6:18 pm

this is in response to yesterdays blog.
Who needs to figure out what to do with “extra” cash? I do. After many years of scratching and saving to keep paying off debt, (including a mortgage), I finally did just that- now, in my late 50s i am starting to accumulate some savings. I have never had extra cash that wasnt somehow spoken for, so i have never figured out what the most effective way of saving/ investing etc was.
Thanks Garth for shining a light. Now if I can just live long enough I might be able to retire with a shred of dignity.

#47 jess on 04.08.19 at 6:19 pm

A new report suggests cleaning up all of the old and unproductive oil and gas wells in Alberta will cost between $40 billion and $70 billion.

The Alberta Liabilities Disclosure Project (ALDP) — a consortium that includes landowners and scientists — came up with the figure using data obtained from the Alberta Energy Regulator (AER).

The figure is much higher than an AER estimate, which pegs the anticipated cleanup cost of all oil and gas infrastructure at $58.65 billion. The AER’s number includes pipelines and other facilities, while the ALDP only looked at oil and gas wells.

The ALDP released the report in Calgary on Monday morning.

https://www.cbc.ca/news/business/orphan-wells-alberta-aldp-aer-1.5089254

#48 AGuyInVancouver on 04.08.19 at 6:22 pm

#31 ZERO. 0. Nada. None. on 04.08.19 at 5:31 pm
Oh, so news out of BC today is that there has been no money for federal policing in British Columbia for financial crime investigations. Will Ottawa please start to invest in BC? Canadians in BC deserve the benefit of the rule of law and protection too.

German points to loss of dedicated fin crime teams around 2013, move of resources to anti terrorism, as reasons for lack of federal funded AML officers.

Look at the real estate price charts in BC and connect the dots here: 2013 was when real estate in BC turned a corner for some of the biggest price discovery/gains in history that peaked out in 2016/17.
– – –
What a coincidence, 2014 was when Macau cracked down on all the money being laundered from Asia through their casions.
https://www.theglobeandmail.com/opinion/article-to-disrupt-money-laundering-canada-should-consider-a-different/

#49 KitsCanuck on 04.08.19 at 6:22 pm

The reality to 50% marginal tax rates at 206k is just like what BC_DOC points out. Its simply not worth the effort to keep making a high income only to turn half of it over to T2 to mis-spend it on a vote grabbing budget. I’m in a similar situation and its just too tempting to take time off and reduce stress levels from work. Sure that means that both T2 and I will get ~50k less per year and I’ll be another low productivity Canadian but thats the line that gets crossed. I’m sure the lefties would rather the govenment get less as long as there are less 1%ers.

#50 HH on 04.08.19 at 6:24 pm

“Bandit gets a job”. I like that. I tried to get Baxter (he’s my cat) a job with Purina. They told me he had to be trained and he needed an agent. All I wanted was to slap a picture of his furry little face on a bag of their cat food. What training do you need for that? Anyway, he didn’t get the job. He costs about $150 a month. Just one cat costs $150 a month. Must be inflation.

#51 Smoking Man on 04.08.19 at 6:32 pm

30 MF on 04.08.19 at 5:28 pm
#9 Smoking Man on 04.08.19 at 4:54 pm

“Ontario Schools are full of communist teachers and activist students. Not going away, and will get stronger.

If your a 1% er. Get the hell out while you still can.”

-I’m guessing you haven’t spent much time on US college campuses lately?

If you think our system is communist, I’ve got some real bad news for you..”

MF
……

Dont matter. Got the Suprime Court and the Senete to back stop and commies. Senate 2 seats per state. Lots of fly over senators.

Canada is vulnerable to commie take over. It’s not if it will happen but when.

#52 Debtslavecreator on 04.08.19 at 6:35 pm

The wealth divide is primarily caused by the junk monetary policy and government subsidies of the credit system
Over time, assuming there’s enough demand for the artificially priced credit that grows more than the net amount paid off and defaulted , the rate of growth in credit drives asset prices (mainly RE and stocks) artificially higher, much higher than what the economy’s organic growth would ever support
The persistent negative or very low real rates of interest, created by the BofC when they step in and liquify the system, prevents the healthy and necessary corrections / recessions to occur. Hence assuming the BofC and Govt bond and currency markets avoid the inevitable loss of confidence, and assuming the demand for the cheap credit exceeds the credit destroyed , the debt levels and nominal asset prices remain artificially elevated and continue to rise far in excess of the inflation adjusted wages
While it feels like prosperity the fake credit driven prices create a false sense of wealth driving even more credit driven inflation of asset prices which results in temporarily inflated spending / GDP growth and income
The public , especially the lower income classes, get angry as the take home pay falls increasingly short to pay the fast rising property taxes, rents, insurances etc
This eventually ends with one last money printing binge and crack up boom then the crash and burn where most of the fake “wealth “ is destroyed by currency depreciation and government taxation and probably war
90% of our wealth divide is caused and driven by the bank of Canada (preventing rates from staying where they should to help correct booms and printing to buy bonds and government bonds at inflated prices to help suppress real rates artificially low and hope for cheap credit to be taken and “invested” to inflate asset priced artificially higher” and government (CMHC/Securitization)
As if the government and its corrupt central bank will fix a problem they create

#53 Millennial Realist on 04.08.19 at 6:36 pm

” We all have the same tools for making, keeping and growing money.”

“The income gap will not be narrowed. No more than the gender gap. Not in this lifetime.”

It is so sad to read these status-quo-justifying hopeless words from you, Garth.

They sound too much like other self-righteous bleatings of Paleo Boomers born on third base, thinking they’ve hit a triple.

You have no idea of the change that is coming, I really get it now.

To your peers, then:

Boomers, be part of the change.

Or be run over by it.

#54 expat on 04.08.19 at 6:37 pm

What socialists never understand is that some ARE! more equal than others and rightly so.

The hard working, clear thinking, idea driving person who works 80 hour weeks while the sloths and the socialists smoked dope is what made our country great.
Sadly this new generation has not know poverty. Everyone is a winner without even breathing hard due to a bubble.

A socialist steals wealth because of envy – not sadness for the poor.

Socialists hate success. They crave the welath of the hard working because they were failures life.

Thus the wealth creators leave to find regions that appreciate hard work and great ideas and create environments where you keep your wealth.

Sadly those places are becoming fewer as slobbering poltical elites realize the giving party of the last 50 years has come to and ned the bill is due.

And the coffers empty. They huddle – sweaty palmed int eh back alleys of government town dreaming of new ways to extract wealth.

And lo and behold they create climate change. Not just another boring natural cycle. Nope

Real climate change and pay a few well placed broke scientists into fat grants and POOOFF!!! – the stupids all bought it…..

Lets create a tax says the sweaty palmed oligarchs. The stupids will rejoice….
And they have.

But alas, the smart person always finds a new home to create and protect the wealth they earned with blood, sweat, and tears. One free of the climate tax scam, the real estate transaction tax scam, the power bill solar tax scam, etc etc etc

Capital flight is real
My friends and I know this….
We took flight.

And will move again.

#55 Linda on 04.08.19 at 6:37 pm

I have never understood why anyone would count on an inheritance. Like fairy gold, it too can vanish. So planning a financial future on something that may not exist down the road seems like setting oneself up for failure. As in ‘I don’t have to save/plan for the future; open an RRSP/TFSA/diversified portfolio because I will receive….’ There might be a payoff, but I wouldn’t want to bet on it. Best to have a backup plan in case that inheritance is a fistful of debts instead of dollars.

#56 HH on 04.08.19 at 6:41 pm

#12 – When my father returned home from the war my parents built a little house as they had the money. No mortgage or loans. They did not own a car at that time either. It had one bathroom – not three. It was a tiny house in Saskatoon. It was slowly completed as they had the money and it was by no means fancy. Eventually, they put a one- bedroom suite in it and rented it. Would you buy house like that today and go without a car until you could afford one?

#57 Dolce Vita on 04.08.19 at 6:46 pm

People in the lending and investment sectors, like you Garth and Dalio just can’t help themselves for themselves.

When a nations economy is highly dependent on wealth creation from the above (and I include RE in that since Canadians have turned that into a speculative financial asset) no good has come from it:

US Trusts turn of the 20th Century
Great Depression
Great Recession
Housing Bubbles…
and the Current Recession + Burst Housing Bubble in the making

Yet these people, you & your fellow Blog authors, Dalio, FIRE (the Banks, RE) et. al. are rewarded with a DISPROPORTIONATE amount of national income for what they do – the usury and accretion of money and no more.

You produce nothing tangible. The financial illiteracy of the population is preyed upon in the worst case.

Look at the 2 Canadian GDP Components:

Services Sector $1.37 trillion
Goods Sector $0.57 trillion

70% of the economy is based on trading services to each other. I ask you how long can that go on before imploding? China was booming in GDP when they made stuff until the last few years where they decided to switch their economy over to the Service Sector, RE, etc.

Low and behold, their GDP growth has stalled (by their measures). Coincidence?

Look at what brings money into Canada (see Exports Chart):

https://atlas.media.mit.edu/en/profile/country/can/

Crude, cars, mining & metals and some agriculture. That’s where the excess money into Canada comes from – the wealth engine of Canada.

In the above look at what we spend money on from Foreign sources, Imports:

Tech. stuff, Cars and Crude.

Dalio and you cannot see the above as you are surrounded in the midst of what you do; hence:

Neither can see the forest for the trees.

Canada makes its money from HEWING AND DRAWING and not from financial speculation incl. RE.

The sooner SOMEBODY in Government realizes this then we can change the Progressive Bull Shit plaguing the nation at present. Their attempts at siphoning money from people like you Garth are stupid, I agree…like a shot in the dark.

Nothing more than attacking an OUTCOME and forgetting to fix the ROOT CAUSE.

I’m a LEFTY but even I cannot ignore the obvious and the BIG PICTURE numbers of the economy.

By the way, your GIG economy, the darling of the Canadian MSM, here is its GDP contribution:

$86.9 Billion out of $1.94 Trillion and we have been at for near 30 years now. Do not expect nor delude yourselves for miracles from this sector.

Canada needs to get its head screwed on correctly or the wealth gap will only get worse. Focus on hewing and drawing and do not impede that: rather, grow it.

THEN AND ONLY THEN when wealth comes from tangible assets and not from usury, accretion and speculating will the wage gap narrow.

The Left in Canada has FORGOTTEN where its money came from and having become a bunch of spoiled little rich kids for it, now worries about things that to the average person matter little.

Just look at whose running the country for that and their HALLMARK policies. Either they matter little to the average person OR attack outcomes and not the root cause.

They guilt Canadians into voting for them.

APOLOGIES Garth but sometimes we cannot see what is right under our nose.

#58 Dl on 04.08.19 at 7:13 pm

AOC?

#59 Dolce Vita on 04.08.19 at 7:20 pm

PS:

The one reason why I love you Garth and your Blog so much, besides your disarming humour, is because of this:

The financial illiteracy of the population is preyed upon in the worst case.

You battle against this every day and try to fix it for the average Canadian by what you write about in your Blog.

Do I like how you and Dalio make your money and the disproportionate amount of rewards from Biblical usury, NO, HELL NO.

Do I love that both of you have a conscience and sound alarm bells when Capitalism gets out of whack, YES, HELL YA.

Why you 2 are the ONLY USURY DUDES whose BARDS I actually make the time to read.

Ciao d’Italia and Buonanotte Garth. Keep being you & unsinkable.

#60 AK on 04.08.19 at 7:22 pm

“As you know, the T2 gang’s first act was to slap a new surtax on the 1%ers (above $206,000), which takes another $1.5 billion from the 274,000 people in this category.”
=====================================

These Socialists need to be voted out in October.

#61 Sebee on 04.08.19 at 7:29 pm

#10 Jay Currie

Molten Salt Reactors are around the corner, promising cheap safe nuclear power running basically on current generation nuclear plant waste. Amazing stuff really. Anyone investing into current/past generation nuclear power plants that always run double or triple the budget is nuts. Only governments are that stupid to build those now

#62 crowdedelevatorfartz on 04.08.19 at 7:31 pm

@#18 BC_Doc

Yep, total agreement.

What the morons dont get is….. rich people can move elsewhere that they are appreciated, slow down working, stop working, etc etc etc.

As Garth says, “But politicians will lie every inch of the way. Surely you have noticed.”

And the angry sheeple still dont understand why they cant get ahead.
But that new $1000 Tat is awesome dude!

#63 akashic record on 04.08.19 at 7:31 pm

If you can’t avoid to give up 50% of your income you are not really a 1%-er.

#64 AK on 04.08.19 at 7:32 pm

“Social advocates (like Jagmeet and AOC) say we need more Robin Hood economics”
=====================================

It looks like Jagmeet and AOC are Communists. The current Liberal party of Canada has overtaken NDP’s previous policies.

#65 VPD on 04.08.19 at 7:35 pm

VPD: is ‘thank goodness’ we have civil forfeiture, because with the R v. Jordan findings, we can’t criminally prosecute money laundering in BC.

#66 Shawn Allen on 04.08.19 at 7:36 pm

Don’t Bother Cleaning Up Alberta?

#46 jess on 04.08.19 at 6:19 pm said:

A new report suggests cleaning up all of the old and unproductive oil and gas wells in Alberta will cost between $40 billion and $70 billion.

******************************
It’s okay, now that burning fossil fuels is becoming socially unacceptable, Alberta can empty out of population and no one will care if it is ever cleaned up?

#67 crowdedelevatorfartz on 04.08.19 at 7:38 pm

@Millennial Surrealist
“Boomers, be part of the change.
Or be run over by it.”

++++
Yawn, same old same old.
You and Apocalypto should tied together in a sensory deprivation tank.
Ya got to get some new material or better script writers.

One question before I crack a $250 bottle of Highland Park and toast the “good life”…

Will the “run over” vehicle be electric or a paleo gas guzzler?

#68 the ryguy - In cabo on 04.08.19 at 7:45 pm

#57 Dl on 04.08.19 at 7:13 pm
AOC?
——————————–

Oh you’ll love her. Alexandria occasional cortex or something like that. House representative in NY. Read her “green new deal” proposal if you need a laugh. Trains to Hawaii and capping cow farts.

Her embarrassing lack of knowledge regarding how tax credits work cost the state 20000+ jobs.

Substitute Drama teachers and 28 year old bartenders..lol, and people have the gall to whine about Trump.

#69 Diharv on 04.08.19 at 7:49 pm

If the swamp has been drained in DC , it has been refilled from the sewer effluent from every Trump property.

#70 Dolce Vita on 04.08.19 at 7:53 pm

#66 crowdedelevatorfartz

You forgot the Ayahuasca that goes very well with a sensory deprivation tank, it’s actually transformative.

For other such tank tips for Millennials, watch:

https://www.imdb.com/title/tt0080360/

As for the Highland Park, save the money and toast using a good Barolo, Amarone, Brunello, Prosecco, Picolit or a 100 other libations Italia makes that skates circles around what the “Don’t know shit from clay” American hamburger, mangia cake, eaters make.

Besides, recesione tecnica Italia’s GDP is in more need of your big Canadian dollars than the Yankie Dogs.

#71 not 1st on 04.08.19 at 7:55 pm

I have told my high priced accountant I don’t want Trudeau taking an extra dime from me. He is all over it. I am going to duck and weave every hair brained Marxist socialist scheme there is.

#72 T-Rev on 04.08.19 at 7:58 pm

I don’t get it Gartho. Every “broke” person I know has a cellphone, cable TV streaming to their bigscreen, 30lb they could lose, at least a couple hours a day of non monetized free time wasted in front of a backlit screen of some sort, a roof over their head, and access to the same schools and healthcare my family gets. What more do people want? Oh yeah, I forgot it’s 2019: external validation of their victimhood and specialness. Well, you’re not.

Shut up and work. Leave your pompous life in YVR swimming with the orcas or instagramming your food in the big smoke behind and live somewhere you’re wanted, instead of wanting to live somewhere you’re not. Get a real problem.

#73 Nonplused on 04.08.19 at 7:58 pm

The problem with “taxing the rich” is that they don’t have any money, they have assets or valuable labor. Thus, income and wealth taxes, along with other taxes, get reflected in prices paid for goods and services.

When you get your car fixed at your favorite, or shall we shall we say “least hated” repair shop, your mechanic does not pay his income taxes, you do. The shop owner does not pay his income taxes, you do. The landlord does not pay his income taxes, you do. It’s all in the hourly rate they charge and it’s why a mechanic earning $35 an hour costs you $140 and hour. The mechanic, shop owner and landlord are simply points of collection for taxes you invariably pay.

Thus, to the extent the market can bear it, any new or raised tax simply raises the price of things. It has to. It’s the only place the money can come from. Thus, in the end of the day, we all pay the same tax rate, it’s just for the 99% the tax is baked into the prices they pay for goods and services from the 1%.

However, if only taxes were so benign as that. They aren’t. Because they distort prices, they distort the economy. Higher prices reduce demand. Reduced demand tends to lead to reduced supply. Less things get done because people simply cannot afford to buy as many goods and services as they would with a lower tax burden.

I won’t use doctors as an example because in Canada that is mostly an infinite feedback loop as the people taxing the doctors are the same people paying them (the government). Let’s look at your typical corporate manager instead. His employees on average let’s say make $100,000 a year. No bad. Most people don’t want to be the manager for free, managing people is a lot of hassle because people are assholes. So the manager wants $20,000 a year more. But since his marginal tax rate is 50%, to get $20,000 a year more the company has to pay him $140,000 a year. This, folks, is what drives the pay gap to such extremes. Every dollar of take home pay a top earner receives must be matched by 2 dollars from his/her employer.

This causes all kinds of dislocations in the labor market. Since it makes managers so darn expensive for employers they try and get by on less managers than they probably need, which causes inefficiency. When times get tough the “corporate memory” (those with the most experience) are the first to get fired. Incentives to do things like climb the ladder or work overtime are reduced, since you only get to keep half of any additional effort anyway. The most productive members of our society are actively being discouraged from making a full effort. When this happens we all lose.

Ok, says AOC, Pocahontas, and Uncle Bernie, we’ll go the route of “wealth taxes”. Well, they have that already it’s called a capital gains tax. But no, the new idea is an annual tax on your holdings, much like a property tax. Well, that is going to be a bureaucratic nightmare. How much is Bill Gates worth? If he and the other billionaires have to pay a 2% wealth tax every year, where is he going to get the money? (Remember, he has Microsoft shares, he doesn’t have any cash.) Does he sell 2% of his holdings every year? If he and the rest of the wealthy are selling 2% of their holdings every year, who is going to buy them? And now extend that down to everybody who is supposedly wealthy. And who is wealthy? Is it $1 billion? $50 million? $2 million? $500,000? Yikes what a nightmare! The only way to raise the cash would be to raise prices and thus profits, but profits are already being taxed! These are people that can’t think. They can see the trees, but not the forest. And this does not even include the fact that you cannot accurately gauge what anything is worth until you sell it. I just read about a rapper who took an 80% haircut on a mansion he just sold. $20 million one day, $4 million the next. This is why capital gains taxes have been the preferred route. Sure, the government has to wait until divestment to get their cut, but at least you know the purchase and sale price and there is now cash in the bank to pay the taxman.

We have to stop electing people who have 6th grade math skills. Actually it would be great if we could stop letting them vote too. That is why when the formerly great republic of the USA was originally established, only land owners could vote. You didn’t need a lot of land, but the idea was that if you didn’t have any in a country where they were literally giving it away for free just so someone would look after it, how much sense did you have? Our current democracies have no such literacy test for voters. So now fully 50% of our voters have below average intelligence. And as AOC and Trudeau have shown, so soon will our leaders.

* All numbers are illustrative, actual marginal tax rates vary.
** Don’t get me going on the “average intelligence” thing. If there is such a thing as intelligence and it is in any way measurable, by statistical definition 50% of the population must be “below average” if the distribution is “normal” in the statistical sense. It could maybe be log-normal, but the news there is even worse because it would mean that more than 50% of the population is below average and there are only a few really smart people roaming around out there, skewing the average up. Have some humility. If you didn’t do well at school in any subject, you are probably below average intelligence. You can blame the school if you like, but it’s probably just you. They had a lot of courses for you to chose to excel at, not just math and science. If you couldn’t even do auto mechanics well, you are probably the problem, not the school.

#74 Vanrenter on 04.08.19 at 7:58 pm

We were lucky to sell our overpriced home in July 2016. But we were smart enough to become lowly renters and not buy back in. My realtor said “you don’t want to be out of this market” He was wrong. We are really enjoying watching what we want to buy drop by $20,000 a month. I’m thinking 2020 will be a good time. Love the dog pics and advice Garth.

#75 Pfft on 04.08.19 at 8:00 pm

@#66 crowdedelevatorfartz on 04.08.19 at 7:38 pm
@Millennial Surrealist
“Boomers, be part of the change.
Or be run over by it.”

++++
Yawn, same old same old.
You and Apocalypto should tied together in a sensory deprivation tank.
Ya got to get some new material or better script writers.

One question before I crack a $250 bottle of Highland Park and toast the “good life”…

Will the “run over” vehicle be electric or a paleo gas guzzler?
_______________________________

pot meet kettle.
you guys are two different sides of the same coin.
I do enjoy reading the nonsense though.

#76 not 1st on 04.08.19 at 8:04 pm

Maybe I will go Galt. I can pull up stakes to my farmland, grow my own food, pop up some panels, spend winters in Trumpland. Trudeau can go give some elses money away.

#77 William R Drury on 04.08.19 at 8:05 pm

Guess were doomed. 12 years . When extrapolating
doesn’t work something changes to fix it.

#78 Joe on 04.08.19 at 8:05 pm

Speaking of taxes. Why is it that when you retire and make a certain amount of money CRA sends out a notice to you to pay your taxes via Installments every quarter vs at the end of the year like you used to when you were working full time and if you do not pay those installments on time CRA charges you interest.

Why cant retired people pay their taxes at the end of the year vs every quarter?? The financial wizards keep talking about how the elderly have saved little money to retire on meanwhile if i have to pay my taxes in installments every quarter that money could be used for investments to make money vs the government having this money and making interest on my money.

CRA say we do this so there is no hardship at the end of the year to pay your taxes. Was there hardship in paying my taxes when i was working full time? Doesnt make sense.

#79 theoryAndPractice on 04.08.19 at 8:05 pm

#62 akashic record on 04.08.19 at 7:31 pm

If you can’t avoid to give up 50% of your income you are not really a 1%-er.
——–

Why? There may be multiple streams of income. The author is only referring to the earned one…

#80 Smoking Man on 04.08.19 at 8:12 pm

Bannon sums up how Trump won, why the pollsters got it wrong and how it’s going to be hell for Trump going forward. He also praised AOC hard work to get elected.

It long but gives you a great understanding of the culture war.

https://youtu.be/EqrjaUC3oak

#81 not 1st on 04.08.19 at 8:16 pm

So I am confused Garth, why isn’t someone like you living off divis which are untaxed to $100k with a spouse and 15-29% after that and then park all your RJ cash in a company at 12% tax rate.

I am a capitalist who supports social programs, not socialism, but why does a company like Amazon get away with paying no tax? They are making billions using the postal service and transportation systems while eating retail outlets alive.

Why does Galen Weston deserve to get 12M dollars today?

https://www.bnnbloomberg.ca/loblaw-receiving-12m-in-federal-funds-to-retrofit-refrigeration-systems-1.1241220

#82 Bruce MacLachlan on 04.08.19 at 8:21 pm

I guess wages have just stagnated because of supply and demand. And of course outsourcing.
Wouldn’t this be a good staring point for wealth distribution instead of taxation.
I know it sounds like government interference again.
But sheesh wages need to meet ability to live.
I’m talking the below middle class earners

#83 crossbordershopper on 04.08.19 at 8:24 pm

nice warm day as always in georgetown, cayman islands ,30 degress celcius
bring your money and your bathing suite. and dont concern your self with all that canadian stuff.

#84 Basil Fawlty on 04.08.19 at 8:27 pm

26 billionaires own as much as the bottom 50% of humanity. Quick, look away, blame government and the socialists.

How many jobs have the 26 created, supporting how many families and economies? – Garth

#85 tccontrarian on 04.08.19 at 8:29 pm

Main problem is fiat money. The endpoint is nearing, so prepare:

https://www.amazon.ca/Everything-Bubble-Endgame-Central-Policy-ebook/dp/B0794RLM8R

TCC

The author is a bullion licker. Like you. – Garth

#86 Old Man Too on 04.08.19 at 8:33 pm

So, I ‘m a man with a spouse and a dog. But older and not as rich.
I just filed my income tax. In 2018 I made 5% less than in 2017, but I have to pay 16% MORE tax. Thanks to T2 and Rachael. It’s not easy becoming a 1%er.

#87 No more permit money on 04.08.19 at 8:40 pm

No more free money for Vancouver.
Issuing permits used to be so lucrative.
But no more:

https://biv.com/article/2019/04/greater-vancouver-building-permits-break-billion-dollar-streak

I wonder what the Province of B.C. will do when property transfer tax revenue comes to a near halt.

I’m sure the province has become addicted to that easy money, and will be in major trouble soon. Maybe they can sell some pipelines from the Pacific coast to Alberta, if that province has any funds left.

#88 Millennial drivel on 04.08.19 at 8:43 pm

#52 Millennial Realist on 04.08.19 at 6:36 pm
” We all have the same tools for making, keeping and growing money.”

“The income gap will not be narrowed. No more than the gender gap. Not in this lifetime.”

It is so sad to read these status-quo-justifying hopeless words from you, Garth.

They sound too much like other self-righteous bleatings of Paleo Boomers born on third base, thinking they’ve hit a triple.

You have no idea of the change that is coming, I really get it now.

To your peers, then:

Boomers, be part of the change.

Or be run over by it.

Whoa dudette … wait’ll ye find out some pigs are more equal than others…

#89 Shawn Allen on 04.08.19 at 8:45 pm

Who Pays Taxes

When you get your car fixed at your favorite, or shall we shall we say “least hated” repair shop, your mechanic does not pay his income taxes, you do. The shop owner does not pay his income taxes, you do. The landlord does not pay his income taxes, you do. It’s all in the hourly rate they charge and it’s why a mechanic earning $35 an hour costs you $140 and hour. The mechanic, shop owner and landlord are simply points of collection for taxes you invariably pay.

Thus, to the extent the market can bear it, any new or raised tax simply raises the price of things. It has to. It’s the only place the money can come from.

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

That’s pretty circular. We all pay each other’s taxes then?

Money is just an intangible construct that greases economy.

The mechanic is providing a real and valuable service and gets to take home only part of that value while a part goes to the tax man. He most assuredly pays taxes. So too, by the way, do government workers.

I would agree that in general a new tax should raise prices. So why did the huge tax cut in the U.S. fall almost entirely to the bottom line? So much so that I heard not a peep about ANY of it being forced to be passed along as lower prices due to competition. That tells me that there is not a lot of competition at least for the products the S&P 500 companies sell.

#90 Loonie Doctor on 04.08.19 at 8:50 pm

I think that the uber-rich (usually inherited to some degree) like JT and Mourneau are pretty clever in how they have framed the problem and targeted people. The working wealthy like professionals, business owners, or employees that put in extra hours are the ones who get whacked. The uber rich simply use other vehicles to shift their money elsewhere. They are untouched while looking like they are targeting the 1%. It also makes moving from working wealthy up to the elite wealth club virtually impossible and protects their status.

At the other end of the spectrum is the poor side of our wealth gap. Not long ago, poor in Canada meant an outhouse, no TV, maybe a phone attached to a wall, and no trips ever. With advances in technology and the competition driving that, we now have much more accesible affordable luxury. Other than the most poor in Canada, most people now have indoor plumbing, TVs, cellphones, healthcare, free basic education, policing, etc. Much of the world still doesn’t have plumbing or electricity.

Looking at that spectrum, I think the global wealth gap is huge, the gap between the uber rich and the rest is huge. Both gaps seem almost insurmountable. In contrast, the gap between a working wealthy person in Canada and a middle class one doesn’t seem so wide in terms of our quality of life. Yet, this is what our politicians are targeting. Divisive and misguided I think, but we readily compare ourselves to others. We see the working wealthy amongst us. The uber wealthy and global poor aren’t as visible. A no-brainer relatable political target. Too bad it is the wrong one.
-LD

#91 NoName on 04.08.19 at 8:51 pm

Now that we speaking of taxes, carbon taxes especially.

Dude i work with over the last daughter earned similar amount as my daughter, both kids live at home with parents. Both kids are students.

Dudes daughter got x-amout of carbon tax rebate, my daughter got nothing back. Only difference is that one daughter is older 2 yrs than other. Family income very similar.

Does anybody knows why is that?

#92 -=jwk=- on 04.08.19 at 8:56 pm

@#5 In 2009 the feds employed a total of 274,300 people. In 2018, ten years later(ish) they employed a total of 273,531. That’s ten yeas of zero growth. I’ll bet you are the first person to throw a fit when the street isn’t plowed after a snow storm.

The only thing we really control is our attitude. Adusting yours might do you some good.

#93 Shawn Allen on 04.08.19 at 8:57 pm

Nova Scotia versus Ontario marginal tax rates

I was just looking it up and was surprised that Nova Scotia’s marginal tax rate is not much higher than Ontario. 54% top rate Nova Scotia and 53.53% in Ontario.

Even with some bigger differences at incomes under $210k, Nova Scotia is fairly competitive with Ontario.

Alberta’s top rate is 48% and is generally noticeably lower than Ontario and Nova Scotia at various income levels. Not a great feature when Nova Scotia tries to attract its spawn back home when they retire from building Alberta.

#94 Basil Fawlty on 04.08.19 at 9:00 pm

“How many jobs have the 26 created, supporting how many families and economies? – Garth”

Great, let’s get it down to one billionaire controlling as much as the bottom 99.9999%

Jeff Bezos employs 566,000 people. Now tell me again how the wealthy are bad. – Garth

#95 Ace Goodheart on 04.08.19 at 9:01 pm

Consultants who get paid millions in commissions to arrange government financial aid for native reserves (and that money is tax money).

Dodgy operations that accept govt funds for purposes like helping needy people, then the cash disappears and no needy people are helped.

Millions gone missing. Given out in government programs with no oversight where money is just handed to anyone who can hire and pay for the right inside Liberal operative.

If you thought previous Liberal governments were corrupt messes you ain’t seen nothin yet.

The extent to which billions of our tax dollars have been literally given away is just starting to come out.

There is no honesty in socialism.

The more entrenched it is, the more corrupt it is.

We need to drain our own swamp.

#96 Deplorable carbon on 04.08.19 at 9:03 pm

#90 NoName on 04.08.19 at 8:51 pm
Now that we speaking of taxes, carbon taxes especially.

Dude i work with over the last daughter earned similar amount as my daughter, both kids live at home with parents. Both kids are students.

Dudes daughter got x-amout of carbon tax rebate, my daughter got nothing back. Only difference is that one daughter is older 2 yrs than other. Family income very similar.

Does anybody knows why is that?.
….
Hmm.. who knows… but this carbon scam is pure wealth redistribution…. I pay it on my heating bill then T2 turns around and gives it to my millennial kids as a rebate….while employing a bunch or bureaucrats to do it… spectacularly stupid stuff .. no wonder millennials don’t know what a commie is

#97 eightlock on 04.08.19 at 9:04 pm

“when you expect your first house to be better than your parents’ last one”

I make twice the median income in BC and I don’t think I could even buy a 1 bedroom condo an hour away from Vancouver. Garth I love your blog but stuff like this makes you look out of touch.

A society has an obligation to provide its citizens with housing. This is not some commy-ndp-eat the rich insistence. Working people deserve to have some sort of shelter over their heads.

You conflate people who want the cost of shelter to go down with a being far-left ndp supporters.

How about this country puts the needs of it’s citizens ahead of people who demand their real estate holdings increase 15% year over year until the end of time?

Get out of YVR and see what I mean. Shelter may be a human right. Real estate is certainly not. – Garth

#98 Adrian on 04.08.19 at 9:06 pm

Who can afford a vacation? Most of us are just trying to pay rent. Rigged? You could say that:

“Reuters exposes the real character of the post-2008 “economic recovery.” It is a recovery for the rich at the expense of the living standards of the majority of working people. While the stock market has surged to astronomical heights, and the wealth of the millionaires and billionaires has surged alongside it, the majority of the American people are substantially worse off than they were prior to the financial crisis…

“Data from Reuters shows that… between 2012 and 2017, the income of the top 20 percent increasingly outpaced its expenses. On average, the top 20 percent of the population makes $188,676 and spends $112,846. This layer makes more money than all of the other income quintiles combined.”
https://www.wsws.org/en/articles/2018/08/03/econ-a03.html

And:
“Forty years ago, the top 1 percent of earners took home 10.5 percent of the total national income, and the bottom half earned 20 percent of it. By 2014, those percentages effectively flipped, with the top 1 percent earning a 20 percent share and the bottom half dropping to 12.5 percent.”
https://www.nytimes.com/interactive/2016/12/16/business/economy/nine-new-findings-about-income-inequality-piketty.html

(This is why the bottom pays little income tax: they barely earn any of the national income!)

Meanwhile, I know the Right likes to focus on personal responsibility, but how about some acknowledgement of how inequality creates intensely stressful status anxiety that causes physical and mental health problems for everyone, including the wealthiest households:
https://www.theguardian.com/books/2018/jun/03/is-rising-inequality-responsible-for-greater-stress-anxiety-and-mental-illness-the-inner-level

Also, living in *relative* poverty, as well as having parents with mental health problems, hurts children:

“Rates of child abuse and neglect are 5 times higher for children in families with low socio-economic status compared to children in families with higher socio-economic status.”
(CDC link below.)

And this creates less healthy, less functional adults:

“For example, exposure to violence in childhood increases the risks of injury, future violence victimization and perpetration, substance abuse, sexually transmitted infections, delayed brain development, reproductive health problems, involvement in sex trafficking, non-communicable diseases, lower educational attainment, and limited employment opportunities.

“Chronic abuse may result in toxic stress and make victims more vulnerable to problems such as post-traumatic stress disorder, conduct disorder, and learning, attention, and memory difficulties.”
https://www.cdc.gov/violenceprevention/childabuseandneglect/fastfact.html

Extreme inequality is bad, mmmkay?

None refers to Canada. – Garth

#99 Shawn Allen on 04.08.19 at 9:08 pm

No thanks to Inheritance

#54 Linda on 04.08.19 at 6:37 pm said:

I have never understood why anyone would count on an inheritance. Like fairy gold, it too can vanish.

*************************************
Agreed, a guy I knew in 1988 was talking about how he would get a share of his father’s wealth. He thought he was entitled to it. Both of his parents are still living.

Most people with money will live into their 80’s. Planning on getting an inheritance is not a great plan when many or most people will be seniors or close to it by the time their parents both pass away. And the parents may need all of their money for care and comfort in their final years.

#100 Mr White on 04.08.19 at 9:11 pm

In the past year or two me and my business associate have tripped over the highest tax rate. Working long hours on a challenging project became a lot less fun when each hour resulted in nearly 50 % going to the government to spend on stupid stuff.

#101 Sydneysider on 04.08.19 at 9:23 pm

As I see it, the high income tax rates are for public consumption only. Wealthy people live off dividends and capital gains that are taxed at much lower rates. Until tax rates rise above 100%, they won’t be affected critically.

Most 1%ers are employed professionals or run businesses. There is a profound difference between wealthy and high-income. Learn it. – Garth

#102 for flop on 04.08.19 at 9:24 pm

#7 West Slam on 04.08.19 at 4:49 pm
1144 Ottaburn Rd in West Vancouver was assessed at $2.87M in 2018 and $3.44M in 2017. It probably could have got close to $4M in Spring 2016. It was listed close to $3M 115 days ago and sold for … wait for it … $1.75M.
*************

wow, flop styled report!
is flop back?

#103 Corporate tax on 04.08.19 at 9:37 pm

Garth paid 50% personally but what did his holding company pay, 12% on first 500k then goes up from there. I will stick to paying myself 60k per year and the rest of it just pay 12% then put in my holding company and invest in stocks and etf’s
What pay all that tax personally unless u need it asap

National securities regulations prevent fee-based financial advisors from incorporating. All professional income is personal, fully taxed. – Garth

#104 Shawn Allen on 04.08.19 at 9:46 pm

They say “money can’t buy happiness”.

But most people would be willing to take the chance to prove that for themselves.

#105 Buster on 04.08.19 at 9:53 pm

Garth,
I do think your are an amazing salesman and apologist for a grossly distorted and unequal system. For about 40 years now, our country has been taken over, thanks to soft & hard-headed politicians who have collectively followed a brutish form of neoliberalism. This tsunami of Hayekian-Friedmanism, which is relentlessly proselytized by stink-tanks like the Frazer inst, Mont Pelerin Society, the heritage foundation…pick a country, these tanks are everywhere!), is basis of many of our societal and environmental problems today.

Sadly, we find ourselves in a golden age of Hi-tech-robber-barons, and ologopolists whose surveillance and price fixing (Canada see: Weston Family, Walmart Soby’s, Bell Rogers, Telus…et al), write law (regulatory capture), and extract rents. The system is now a nasty mix of the old rentier and precarious giggy-neofeudalism. This nightmarish scenario is playing out across the Western world. The only lever left for the great unwashed, a.k.a the 95ish%, is to put the heat on the ruling classes.

Populism is the “Canary in the Coal mine” and will only intensify as we head into the next recession. The peeps at the top made a fatal error by bailing out corrupt and insolvent bankers without doing the same for “main streeters”. A lot of good capitalism is when you have a tonne of debt and desperate masses.

Who left the damn gate open? – Garth

#106 crowdedelevatorfartz on 04.08.19 at 9:53 pm

@#101 for Flop
“wow, flop styled report!
is flop back?”

+++++

Shhhhhhh.

#107 Bob on 04.08.19 at 9:56 pm

#19 yycnotretired on 04.08.19 at 5:14 pm

I’m willing to bet garth does pull in 7 figs, so you have a moot point?

That’s certainly possible, but not my point. Garth continually refers to the “tax rate” without qualification. When he writes that “the tax rate for higher-income earners is now over 50% in seven provinces” he suggests that all those in the top income bracket fork over 50% of their income. This isn’t even remotely true.

If you want evidence of the confusion around how graduated taxes actually work, look no further than this comment:

#25 BC_Doc

Any future work (the real kind) is just going to knock us into a higher bracket. I have no plans to quit (due to work ethic) but the incentives are clearly there telling me I’m a fool if I keep working hard.

This sentiment is patently absurd. You will never earn less by moving into a higher income tax bracket. There is no disincentive in our income tax system to earn more.

Unlike you, apparently, I give readers enough credit to understand how income taxes work. Next time I will use crayon. – Garth

#108 crowdedelevatorfartz on 04.08.19 at 9:56 pm

@ #75 Pffft
“I do enjoy reading the nonsense though.”

++++

I’m not surprised.

Your “name” is the sound I make on crowded elevators….

:)

#109 eightlock90 on 04.08.19 at 9:59 pm

“Get out of YVR and see what I mean. Shelter may be a human right. Real estate is certainly not. – Garth”

A system where a small amount of people own all the real estate and the rest rent from them, I think that has a name. Anyone?

Feudalism.

Sorry old timers’ but I’ll be voting for any political party that says they will lower the cost of housing. I don’t care if an entire generation is leveraged up on housing and has every last nickle they own riding on it. Go bankrupt and try again.

#110 bellyrubs on 04.08.19 at 10:00 pm

Most 1%ers are employed professionals or run businesses. There is a profound difference between wealthy and high-income. Learn it. – Garth

If you’ve ever spent a summer afternoon with a few good friends and a few good dogs at a swimming hole, then you’ve hit the top wealth bracket.

#111 NoName on 04.08.19 at 10:06 pm

#96 Deplorable carbon on 04.08.19 at 9:03 pm

There is a carbon tax calculator and it does “shows” that 16 yro don’t qualify under same conditions for rebate ad 19 yro. I always thought tha discrimination based on age is iligal, but again iam just mediocre electrician…

#112 Sydneysider on 04.08.19 at 10:13 pm

“Most 1%ers are employed professionals or run businesses. There is a profound difference between wealthy and high-income. Learn it. – Garth”

Are you referring to 1% salary or 1% assets? There is a profound difference in public perception of the two groups’ value to society.

Filling out my tax return today, it was marvellous to see how much real money vanished from the tax man’s view under the guise of capital gains. If the average factory worker really understood that magic there would be a revolution.

#113 Moniker on 04.08.19 at 10:14 pm

My girlfriend is a doctor. She works bloody hard. Is academically brilliant. Did 12 years of post secondary schooling, went into debt 200k and gave up her twenties to study.

The government is taxing her so aggressively it doesn’t make sense for her to work more hours. So let me ask you this- is society better off when she chooses not to work more because of massive taxes? People cannot get a family doctor, line ups outdide walk in clinics, big waits in hospital waiting rooms. Is taxing the hell out of her and creating a disincentive to work a little more worth it?

#114 Slowly Boiling Frogs on 04.08.19 at 10:16 pm

#20 BlogDog123 on 04.08.19 at 5:14 pm
Imagine all those Canadian folks who acquired Information Technology skills in the 1990’s, tried their best to keep up-to-date, yet had their jobs outsourced to India anyway (banking, finance, etc…). Accept a lesser local job for less pay or uproot the family and move. IBM now has 50% of their IT payroll in India.

Would you tell you kids to become software programmers, only to have these once lucrative, skilled and high-paying jobs get easily shifted to another office halfway around the world?

The most under-reported story of the last 15 years:
———————————————————-

Been living through that for the last few years at CGI.

Every few months more Canadians are let go and the company even tries to screw them out of their severance packages.
Then they start bringing in hundreds of workers from India through inter-corporate transfers or send the work to India.
These Indian workers are about 10% good and 90% incompetent, but it doesn’t matter since they are one third the cost.

CGI, Tata, Infosys, Accenture, IBM Consulting all do this as part of their new business model.

The CBC, Global TV, G&M or Toronto Star refuse to do stories on it since it might make them look racist, yet it is worse than GM’s closing of the Oshawa plant because in this case these are workers still great at their jobs being culled for cheap labour, but GM just has to deal with products that nobody wants to buy.

Mothers, don’t let your children grow up to be coders.

#115 Sydneysider on 04.08.19 at 10:17 pm

#105 Buster

Don’t forget the Irving family that runs NB.

https://www.nationalobserver.com/2016/06/06/news/what-have-irvings-done-new-brunswick

#116 Doug in London on 04.08.19 at 10:22 pm

If you’re looking for some good reading on this topic I recommend Chrystia Freeland’s book Plutocrats: The rise of the super rich and fall of everyone else.

Without getting into a long debate on this subject what else, other than redistribution of wealth, can be done about this nagging problem? Premier Doug Ford insists that the Ontario education system needs to be restructured. A good place to start is a mandatory course in finance and managing money in Grades 11 and 12. Yes, even with such education many people will still make bad decisions but let’s at least give some guidance to the wise who actually pay attention.

#117 Remembrancer on 04.08.19 at 10:22 pm

Jeez, all this and its still 11 days before the next full moon…

#118 Millmech on 04.08.19 at 10:29 pm

#53
I have two millennials(tradesmen) sons both with SO that have high paying careers(nursing), both couples make well over 200k combined.
They live in small town BC owning houses that cost them under two years wages that they will have paid off in under five years.The hate they get from their friends on the coast who live payday to payday has gotten to the point they no longer talk to them.
Their friends could easily leave the coast and have a great stress free life but choose to stay on the coast living with their parents and keep falling behind.My kids don’t get it,why stay somewhere where it’s so hard to get ahead?
My kids have it way easier than any other generation with great paying careers, cheap housing where they live,lots of time to enjoy themselves and have great social circles(just exclude the bitter coastal people).They figure they will be financially independent by 45 with houses paid off, not something my generation will have(gen x).
They chose well paying careers from the get go and paired up with like minded GFs alas they can’t figure out why there is so many whiny people from their generation who can’t make good life skill choices( careers,partners,friends etc)

#119 jeff on 04.08.19 at 10:30 pm

Hey Garth,

Why don’t you do a spot on Canada’s top 20 wealthiest, and find out whether or not they are in the Panama Papers, or how much money they have hiding in foreign tax havens….why do they get off scott free? you know who they are

Worry about yourself, not 20 other people. – Garth

#120 Genbizx on 04.08.19 at 10:39 pm

I don’t like labels…populist, lefty, deplorable..too much of this incessant labelling. People are not neat little packages of unified ideas. Life is more complicated than that. It’s such a bully tactic. Think like us or you’re a populist. Agree with all forms of immigration, or you are a hateful racist. Be rich and successful or you’re not trying and not worthwhile….empty thinking

#121 Lead Paint on 04.08.19 at 10:40 pm

#73 Nonplused on 04.08.19 at 7:58 pm

I enjoyed your comment. While I’m not supporting it, government could tax assets annually but not get paid cash annually. He would have to transfer 2% of his shares to the IRS who would presumably grow a nice big portfolio quickly, selling and taking profits as a insurance company would.

Not in favour, but definitely doable.

#122 Sold Out on 04.08.19 at 10:48 pm

While I agree with Garth that we shouldn’t conflate “well-paid” with “wealthy”, I don’t believe that there is equality of opportunity for Canadians to be successful. You have to be lucky to be good, and good to be lucky in this world. Mill. Realist is quite correct, that most people who were born on 3rd base think they hit a triple; most of those who rose to success from humble origins will cheerfully admit that they are the luckiest mofos in the ballpark. I am among the latter, and may be biased. If the recipe for success is just hard work and personal sacrifice, why are so many people dutifully following the steps, but getting further away from the goal?
I’m a first-year (1965) Gen X’er, so I had some advantages common to Boomers when it came to education and jobs, but lost that edge when I was injured out of a well paid gov’t job with a DB pension, after 24 years of climbing the ladder. At that point, I had to re-enter the workforce on the bottom rung, armed only with the crappy retraining provided by our friendly WCB. The wages being offered were actually lower than what I earned in the private sector in the early 90’s. This is the reality facing today’s Millenials, but they are forced to shop at the inflated asset prices caused by CB policies. It’s not just in bubble cities; the simple math is there are a lot more people, paying way more for their education, competing with the rest of the world for fewer and fewer high-paying jobs.
It seems pretty clear that anyone who doesn’t come from money, and is under 40-45, is operating at a distinct disadvantage. If it weren’t for this gas-bag of a housing bubble, I would still be working for peanuts; my success is solely due to being born at the right time to afford a SFH in YVR (and sell at the right time, too). I don’t “deserve” my good fortune anymore than mills deserve to be screwed by the economic bait and switch game that they were born into.
The present economy has pre-determined winners and losers, and gov’t has to pander to someone. It looks like the losers out-number the winners, so the low hanging fruit is to tax the lucky bastids and give it to the those who aren’t.

#123 Vampire Studies on 04.08.19 at 10:52 pm

106 Bob – never been close to the max tax bracket have you?

The sentiment can also be described as “diminishing returns”. Ever want to buy the “best” of something?
You get to a point where the next dollar/$100/$1000 etc doesn’t get you a noticeable difference. The time and effort you put forth for that extra money is better
spent on a slightly lesser product leaving more time
available to enjoy it.

But if you’re qualified, you can come work for me. $220 for an 8 hour day, or $230 for ten hours. Your call.

#124 the ryguy - In cabo on 04.08.19 at 10:57 pm

#73 Nonplused on 04.08.19 at 7:58 pm
———————————————-

Excellent comment..top notch sir, I’d send you a gold star if I could.

Treat yourself to a scotch tonight Garth, even I think the comments are a little extreme tonight..thats saying something :)

#125 Stan Brooks on 04.08.19 at 11:02 pm

#52 Debtslavecreator on 04.08.19 at 6:35 pm

Yes, it is a legalized theft, this is how law, banking and monetary system works in this former British and currently banker’s debt slaves colony.

Private banks create money through debt. They even record loans in ‘other deposits’ on their balance sheets creating fake liabilities, i.e. the loan is both asset (backed by collateral of the loan) and liability so half-educated idiots can state that every loan is backed by savings.

The problem is not that we have excessive savings that justify low interest rates. The problem is that we have no savings combined with excessive loans that creates huge distortion in the economy. Low rates destroy savers, while banks produce ‘credit’ that further increases assets prices and the taxes on it, the cost of living skyrockets so the sheeple has to sell assets and get deeper in debt just to survive.

In the process as the jobs are outsourced we are left with increasingly fake hollow credit driven consumption economy.

The money to pay back the interest on loans does not exist. Boc serves the banking cartel.
The real estate ‘industry’ is just the ticks on the corpse of the economy.

The paper house ‘wealth’ is the smoke and mirrors in this great organized theft/magician trick (depending on your angle). The mafia has far more integrity than the current banking system.

As for the media it just serves to redirect the attention to idiot corrupted politicians and their scandals, these are just the puppets in the big play.

The end result of course will be the equalization of standard of living world wide, aligning with third world countries who have the advantage of actual grow, are productive and have no debt.

The owners of this place pretty much decided on milking the sheeple do death, then slaughtering it and skinning it (with taxes), replenishing it with fresh young stock elsewhere.

#126 Basil Fawlty on 04.08.19 at 11:11 pm

“How many jobs have the 26 created, supporting how many families and economies? – Garth”

Great, let’s get it down to one billionaire controlling as much as the bottom 99.9999%

Jeff Bezos employs 566,000 people. Now tell me again how the wealthy are bad. – Garth”

My point was not that the wealthy are bad. My point is that wealth inequality has never been greater. Are you saying that’s good?

#127 SWL1976 on 04.08.19 at 11:34 pm

Fantastic post Garth

Wanted to comment yesterday, but was too busy. I am by no means part of the 1% but thanks to this blog and a little elbow grease (most younger millennial’s might not know what that is) I have found ways to generate income 7 days a week and lower my taxes, while still paying more than my fair share

I really appreciate all that you do and always look forward to the daily wisdom served with a delicious side of humor and wit

#128 Leo Trollstoy on 04.08.19 at 11:35 pm

#84 Basil Fawlty on 04.08.19 at 8:27 pm
26 billionaires own as much as the bottom 50% of humanity. Quick, look away, blame government and the socialists

See? Poor ppl aren’t very smart

That’s why they’re poor

#129 Paul on 04.08.19 at 11:48 pm

109 eightlock90 on 04.08.19 at 9:59 pm
“Get out of YVR and see what I mean. Shelter may be a human right. Real estate is certainly not. – Garth”

A system where a small amount of people own all the real estate and the rest rent from them, I think that has a name. Anyone?

Feudalism.

Sorry old timers’ but I’ll be voting for any political party that says they will lower the cost of housing. I don’t care if an entire generation is leveraged up on housing and has every last nickle they own riding on it. Go bankrupt and try again.
————————————————————————————————
I don’t know what you do for a living, but if you think you will be fine in that scenario good luck. You may need to work harder!

#130 Jay Currie on 04.09.19 at 12:11 am

Sebee – Totally with you on molten salt reactors. Canada is actually doing very good work on small reactors. Built in factories and transported to site. We need to be doing more of this and trying to make our electricity costs the lowest in the world. We have the resources and the expertise.

#131 Ponzius Pilatus on 04.09.19 at 12:15 am

#84 Basil Fawlty on 04.08.19 at 8:27 pm
26 billionaires own as much as the bottom 50% of humanity. Quick, look away, blame government and the socialists.

How many jobs have the 26 created, supporting how many families and economies? – Garth
————–
How many jobs?
Please provide numbers, Garth.
I don’t have the numbers, but I guess most of them are minimum wage jobs.
Remember, you don’t become rich by being generous.
Jim Pattison, for instance, gutted all the high paying wages.
And now most of his workers are on minimum wage.

#132 Adrian on 04.09.19 at 12:22 am

“None refers to Canada. -Garth”

That’s not really arguing fair, now is it, Garth? Adverse Childhood Experience (ACE) scores don’t depend on nationality, and neither do status-anxiety related mental illnesses. I’ll grant you Canada’s inequality is less bad, but that just explains why populism hasn’t exploded across our country to the same extreme, yet. Do you really want to wait until we have Albexit, or elect our own Trump, or have months of continuously disruptive yellow vest protests?

Canadian data on inequality (the last paragraph is a gem):


In the first decades of the 20th century, high income earners held a significant share of Canada’s income. From 1920 to 1940, the top 1% of taxfilers received no less than 13% of all income, with this figure peaking at just over 18% in 1938. However, this share declined during the social and economic upheaval of the Second World War. By 1944, the top 1% of earners received 10% of all income, a drop of more than 8 percentage points in six years.

Income concentration among top earners continued to fall—albeit less dramatically—until 1978. From 1944 to 1978, the share of income earned by the top 1% gradually declined from 10% to just under 8%.

However, the trend began to reverse itself in 1978. The share of income earned by the top 1% edged up to just over 8%, remained steady until the mid-1980s, and then rose sharply from 1988 to 2007, with brief dips around economic downturns in 1991 and the early 2000s. At its peak in 2007, the share of income earned by the top 1% was almost 14%, still below levels seen in the 1920s, but representing an increase of 75% over 30 years.

After 2007, the proportion of income earned by the top 1% (and higher brackets of earners) decreased somewhat to the levels of the late 1990s.

As income became more concentrated among the top earners in Canada, the lower half of income earners saw their share of earnings decrease. From 1982 to 2014, the proportion of market income earned by the bottom half of earners fell by 28%. Meanwhile, the share earned by the top half increased by 5%. The largest gains were made in the highest earning brackets. The top 1% saw their share of income rise by 53%, the top 0.1% by 90% and the top 0.01% by 133%.

https://www150.statcan.gc.ca/n1/pub/11-630-x/11-630-x2016009-eng.htm

#133 Ponzius Pilatus on 04.09.19 at 12:29 am

#95 Ace Goodheart on 04.

There is no honesty in socialism.

The more entrenched it is, the more corrupt it is.
,—————
Buddy,
Canada has just been declared one of the most corrupted country in the World on par with Russia, China and Columbia.
You can thank good ol capitalist Harper for that.

#134 Lorne on 04.09.19 at 12:32 am

#83 Basil Fawlty on 04.08.19 at 8:27 pm
26 billionaires own as much as the bottom 50% of humanity. Quick, look away, blame government and the socialists.

How many jobs have the 26 created, supporting how many families and economies? – Garth
…..
Ah, the continuous mantra of the right…..trickle down economics. But is that an actual fact or a dream?

https://medium.com/datadriveninvestor/trickle-down-economics-doesnt-work-so-why-do-republicans-keep-trying-it-3987459108b5

#135 Al on 04.09.19 at 12:43 am

Any one who is serious about exploring the history and possible answers and explanations relating to the income and wealth gap should read Capital in the 21st Century. I suggest our host does as well if he hasn’t done so already. Lots of tax talk, a little dry in many parts but would be right the alley of our host and guest bloggers.

#136 Nonplused on 04.09.19 at 12:43 am

I expected a lot more feedback on my statement that if you didn’t do well at school then you probably aren’t all that smart than I got (which was zero). Maybe those people don’t follow Garth. Could it be that you can only help the people who don’t actually need much help?

Anyway, idiots, if you couldn’t even get a good mark in drama class please stop voting. Although I am not really worried about it because you can’t probably tell where you are supposed to vote or what day it occurs.

#137 DON on 04.09.19 at 12:49 am

#105 Buster on 04.08.19 at 9:53 pm

Garth,
I do think your are an amazing salesman and apologist for a grossly distorted and unequal system. For about 40 years now, our country has been taken over, thanks to soft & hard-headed politicians who have collectively followed a brutish form of neoliberalism. This tsunami of Hayekian-Friedmanism, which is relentlessly proselytized by stink-tanks like the Frazer inst, Mont Pelerin Society, the heritage foundation…pick a country, these tanks are everywhere!), is basis of many of our societal and environmental problems today.

Sadly, we find ourselves in a golden age of Hi-tech-robber-barons, and ologopolists whose surveillance and price fixing (Canada see: Weston Family, Walmart Soby’s, Bell Rogers, Telus…et al), write law (regulatory capture), and extract rents. The system is now a nasty mix of the old rentier and precarious giggy-neofeudalism. This nightmarish scenario is playing out across the Western world. The only lever left for the great unwashed, a.k.a the 95ish%, is to put the heat on the ruling classes.

Populism is the “Canary in the Coal mine” and will only intensify as we head into the next recession. The peeps at the top made a fatal error by bailing out corrupt and insolvent bankers without doing the same for “main streeters”. A lot of good capitalism is when you have a tonne of debt and desperate masses.

Who left the damn gate open? – Garth
***********************

It was me!
I let Buster in.
I did it on purpose I tell yah…just to shake up the place, chum the waters so to speak.
After all, he has a canned dog food brand named after him.

Down Buster…stop snipping at Garth.

The one thing I do agree with is that with a recession the protests will come…1960-70s all over again.

#138 DON on 04.09.19 at 12:50 am

@ Dolce

Well said on your back to back posts. Objective analysis.

#139 DON on 04.09.19 at 12:56 am

@crowded

I think the younger poster was chumming the waters.

And caught you!

LOL – you beat me to it.

Millens may be larger in pop than Boomers (in Corruptanada) but more Boomers vote. Buy the time the shift happens millens will be boomers – lol (maybe not but funny nonetheless).

#140 Nonplused on 04.09.19 at 12:56 am

#89 Shawn Allen

Government workers do not pay taxes. They get paid out of taxes. It’s all just to make it look alike. If the government pays you $80,000 a year and then claws back $20,000 in taxes, what would the difference be if they just paid $60,000 a year tax free? It’s a round trip, for optics only. There is no reason to tax government employees, other that optics. You can just pay them less and it all works out the same. All it is is more paper work.

#141 DON on 04.09.19 at 12:58 am

#102 for flop on 04.08.19 at 9:24 pm

#7 West Slam on 04.08.19 at 4:49 pm
1144 Ottaburn Rd in West Vancouver was assessed at $2.87M in 2018 and $3.44M in 2017. It probably could have got close to $4M in Spring 2016. It was listed close to $3M 115 days ago and sold for … wait for it … $1.75M.

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

Could be the guy/gal on Twitter FlippingFlops.
*************

wow, flop styled report!
is flop back?

#142 Vampire Studies (post grad) on 04.09.19 at 1:26 am

4 Vancouver Victoria Langley Montreal (did I miss any?)

“…those who wait out the bubble are always rewarded with years of opportunity to buy a property at a fraction of the cost – with maximum price appreciation potential.”

Ah, so that is what this is all about. You want to
catch the next bubble.

#143 Al on 04.09.19 at 1:40 am

Fun facts:

income from capital exceeds income from labor for the top 1/1000, or the 0.1% percenters.

In terms of average incomes, among the top 1% those without a certificate, diploma or degree (no high school diploma) had the highest average income ($405,100) of any educational attainment group.

#144 Smoking Man on 04.09.19 at 1:45 am

DELETED

#145 Smoking Man on 04.09.19 at 1:57 am

DELETED

#146 Where's The Money Greedo Weston? on 04.09.19 at 2:53 am

Re: #81 not 1st on 04.08.19 at 8:16 pm
So I am confused Garth, why isn’t someone like you living off divis which are untaxed to $100k with a spouse and 15-29% after that and then park all your RJ cash in a company at 12% tax rate.

I am a capitalist who supports social programs, not socialism, but why does a company like Amazon get away with paying no tax? They are making billions using the postal service and transportation systems while eating retail outlets alive.

Why does Galen Weston deserve to get 12M dollars today?
+++++++++++++++++++++++++++++++
Another one of his scams. Wouldn’t believe a word of it. He’ll just fake the replacements, just like he faked running a REAL BANK!
I would just like him to pay the $320 million+interest he owes Canadians via the CRA. You see he started up a bank and wrote off at least $480 million in taxes (that’s what CRA was suing him for initially, but I guess they gave him a break of $100 million).
You see CRA says he owes this money because that bank he set up only had 1 customer…..him…..All found out through the panama Papers.
So now his phalanx of lawyers have appealed this decision from August 2018.
Any odds the lawyers go for a DPA, what’s a slap on the wrist and a tedious $100,000 in change to a charity when you’re the almighty grocer to the plebes!
That guy should be in the slammer, but will he ever even step inside a courtroom in Canada. Not in my life of gov’t DPAs.
It’s become decorum in the past 15 years in this 3rd world, banana payoff republic.
And still no decision on what part owner of the Calgary Flames, and major shart-holder of Imperial Metals (Murray Edwards-14TH richest Canadian) should get for letting their Mount Polley spew poison down major waterways in BC with nary a slap of the hand.
In fact, he was greeted with open arms and given a place to stay in England, along with another cream of the drop politico in the name of Guido Gordon Campbell, and forced to dine on scallops and caviar at taxpayers’ expense.
I guess it could be worse, but Campbell stopped in Ontario to “not recognize” the province, just like he promised in BC, and you see what happened.
You Ontarians are in a world of hurt when Campbell gets done with you.

#147 Hey Joe on 04.09.19 at 3:31 am

We who do well should probably be careful if we are part of the top 1%. Probably too if top 5%. We live in a democracy… the lower 95% will get to vote on what happens. To suggest that income redistribution or wealth tax wont occur is naive. The money has to come from somewhere.

#148 earthboundmisfit on 04.09.19 at 4:00 am

#57 AOC? Chiquita Khrushchev

#149 Gravy Train on 04.09.19 at 6:04 am

#112 Sydneysider on 04.08.19 at 10:13 pm
“Filling out my tax return today, it was marvellous to see how much real money vanished from the tax man’s view under the guise of capital gains. If the average factory worker really understood that magic there would be a revolution.” If I had to have my capital gains fully taxed, I’d insist that the adjusted cost base of the items disposed of be indexed for inflation (just as income tax brackets are indexed); in fact, I might just be better off. :)

#150 Captain Uppa on 04.09.19 at 6:42 am

>>Jeff Bezos employs 566,000 people. Now tell me again how the wealthy are bad. – Garth>>

Garth, why must everything be either/or? Things can be two things at once. While Bezos deserves a hefty fortune for his entrepreneurial accomplishments, how much is enough?

Mr. Bezos is worth 152 billion running a 1 trillion dollar company. Median pay for employees is a paltry $28,446. Now of course the mail room guy shouldn’t get paid 152 billion, but surely we can reason a better wage median to meet cost of living and in fact thrive above it.

People like Bezos with companies like Amazon need to raise wages so that their employees can raise families, add to the economy, and top up all their TFSAs and RRSPs and 401Ks. This makes a better and more peaceful society for everyone. I am using Amazon as an example, but there are many, many more companies like this.

So how much is enough?

Take more from Bezos and he loses the incentive to invest, take risks, innovate and expand. Ergo, fewer new jobs for families that need them. The logic here is abysmal. – Garth

#151 Captain Uppa on 04.09.19 at 6:54 am

>>How many jobs have the 26 created, supporting how many families and economies? – Garth>>

Again, that is understandable. No one should be calling for the evil that is socialism. But what is very questionable is the increasing wage/income gap. If companies are making all these record profits which you say keeps the markets soaring, why not share a bigger piece with the loyal, hardworking guy on your shop floor who is scraping by because of how expensive everything is.

I recall a very rich CEO on 60 Minutes a year or two ago who said he didn’t even know how much money he had (that’s how much he had).

#152 Howard on 04.09.19 at 6:55 am

#104 Shawn Allen on 04.08.19 at 9:46 pm
They say “money can’t buy happiness”.

But most people would be willing to take the chance to prove that for themselves.

————————————

That belief is a myth. Partly, anyway.

More money has been empirically proven to produce a greater sense of happiness, but only up to a certain point. A person making $100K will on average be happier than a person making $50K, partly due to the decreased stress and increased security that comes from greater financial flexibility.

However, a person making $200K is only marginally than the $100K person, if at all.

#153 Captain Uppa on 04.09.19 at 7:00 am

Just one last thing;

CEOs make 361x what an average employee makes. Would even 150-200x be the end of capitalism? Give me a break. Dalio knows this and others like him have said the same.

Enough with the US stats. Meaningless here. – Garth

#154 Ace Goodheart on 04.09.19 at 7:09 am

RE: #119 jeff on 04.08.19 at 10:30 pm

“Hey Garth,

Why don’t you do a spot on Canada’s top 20 wealthiest, and find out whether or not they are in the Panama Papers, or how much money they have hiding in foreign tax havens….why do they get off scott free? you know who they are”

The wealthy don’t pay taxes. Neither do the poor. The upper middle classes, who either work for a salary or income somehow, or who run a small business, pay all the taxes.

Re: Panama papers: This scam has been going on for years, and continues to go on. It’s relatively simple: If you run a large business, you can tax deduct “consultant fees”.

So you head down to the BVI for a nice little vacation. You find that this little island chain contains more corporate head offices than Toronto and Vancouver combined. What do all these companies, that are really just mailboxes at various law firms, actually do?

Answer: They collect consultant fees.

If you open a company, in a blind trust, held by a BVI law firm (or a law firm in the tax haven country of your choice), and the law firm cannot reveal the identity of the person or company that actually owns the company in the blind trust, due to solicitor/client confidentiality rules, then you can send a lot of money to this company, held in trust by your chosen law firm, and you can tax deduct that money back home, from the earnings of your company state side (or Canada side as the case may be).

You then just head down to BVI with a suitcase. You can cross a border with a certain amount of cash without declaring it (don’t go over the limit).

Or better yet, buy a yacht, an island, and live down there in the winters.

Tax deduct up here, and collect your “consultant fees” down there. Perfectly legal (they don’t have any tax codes in tax haven countries, so you don’t have to declare the income). Technically, you didn’t earn it (because your company is in a trust, held by a law firm, so you don’t actually own it). The only illegal part is when you go and collect the cash and either bring it home or spend it abroad.

Then it becomes “undeclared income” and people can get in a lot of trouble for that.

Unless, of course, you are from Canada, and you have good government connections.

Then, as we have seen in the News over and over again, nothing will be done……

#155 Figure it Out on 04.09.19 at 7:11 am

“So there’s no fix for this. […] Millions of people looking at governments to even out wealth will be disappointed. They cannot and won’t do it. […] The income gap will not be narrowed. […] Not in this lifetime.”

This is exactly the kind of bullshit that the second estate was spouting right up until the third estate set up guillotines and set to work ‘fixing’ things. “Corporations are people, my friend.”

If you’re espousing violence to make up for your own economic failure, you need help. And you’re not welcome here. Adios. – Garth

#156 Howard on 04.09.19 at 7:18 am

#43 The real Kip (Ret) on 04.08.19 at 5:42 pm

Does anyone really believe the Cons under Scheer will reverse current taxation rules brought in by the Libs? If yes, I have a bridge I’d like to sell you.

——————————————–

They might bring back the $10,000 TFSA at the very least.

#157 Stan Brooks on 04.09.19 at 7:23 am

DELETED

#158 Tater on 04.09.19 at 7:55 am

#140 Nonplused on 04.09.19 at 12:56 am
#89 Shawn Allen

Government workers do not pay taxes. They get paid out of taxes. It’s all just to make it look alike. If the government pays you $80,000 a year and then claws back $20,000 in taxes, what would the difference be if they just paid $60,000 a year tax free? It’s a round trip, for optics only. There is no reason to tax government employees, other that optics. You can just pay them less and it all works out the same. All it is is more paper work
—————————————————————-
If we had a flat tax system with no deductions this would make sense. Since we don’t though, it’s complete nonsense.

#159 The Great Gazoo on 04.09.19 at 8:00 am

“Superpower Dogs” opening at the Ontario Science Centre IMAX theatre on April 12th.

https://www.ontariosciencecentre.ca/imax/film/68/

“Join an immersive IMAX adventure to experience the life-saving superpowers and extraordinary bravery of some of the world’s most amazing dogs. In this inspiring true story, our best friends are also real-life superheroes. Journey around the globe to meet remarkable dogs who save lives and discover the powerful bond they share with their human partners. Follow Halo, a rookie puppy training to join one of the most elite disaster response teams in America. Meet Henry, an avalanche rescue expert in the Canadian Coast Mountains; Reef, a Newfoundland lifeguard with the Italian coastguard; Ricochet, a Californian surf legend helping people with special needs and the Bloodhound brothers, Tipper and Tony, who are leading the fight to save endangered species in Kenya. As we discover the incredible abilities of dogs and the astonishing science behind their superpowers, we’ll never look at our best friends the same way again.”

#160 Tater on 04.09.19 at 8:01 am

#154 Ace Goodheart on 04.09.19 at 7:09 am
RE: #119 jeff on 04.08.19 at 10:30 pm

“Hey Garth,

Why don’t you do a spot on Canada’s top 20 wealthiest, and find out whether or not they are in the Panama Papers, or how much money they have hiding in foreign tax havens….why do they get off scott free? you know who they are”

The wealthy don’t pay taxes. Neither do the poor. The upper middle classes, who either work for a salary or income somehow, or who run a small business, pay all the taxes.

Re: Panama papers: This scam has been going on for years, and continues to go on. It’s relatively simple: If you run a large business, you can tax deduct “consultant fees”.

So you head down to the BVI for a nice little vacation. You find that this little island chain contains more corporate head offices than Toronto and Vancouver combined. What do all these companies, that are really just mailboxes at various law firms, actually do?

Answer: They collect consultant fees.

If you open a company, in a blind trust, held by a BVI law firm (or a law firm in the tax haven country of your choice), and the law firm cannot reveal the identity of the person or company that actually owns the company in the blind trust, due to solicitor/client confidentiality rules, then you can send a lot of money to this company, held in trust by your chosen law firm, and you can tax deduct that money back home, from the earnings of your company state side (or Canada side as the case may be).

You then just head down to BVI with a suitcase. You can cross a border with a certain amount of cash without declaring it (don’t go over the limit).

Or better yet, buy a yacht, an island, and live down there in the winters.

Tax deduct up here, and collect your “consultant fees” down there. Perfectly legal (they don’t have any tax codes in tax haven countries, so you don’t have to declare the income). Technically, you didn’t earn it (because your company is in a trust, held by a law firm, so you don’t actually own it). The only illegal part is when you go and collect the cash and either bring it home or spend it abroad.

Then it becomes “undeclared income” and people can get in a lot of trouble for that.

Unless, of course, you are from Canada, and you have good government connections.

Then, as we have seen in the News over and over again, nothing will be done……
—————————————————————-
All those billionaire, moving their money out of BVI shells in cash 10K at a time. Yep, that’s how they do it.

This debate is evolving into deplorativity. Pulling the plug soon. – Garth

#161 not 1st on 04.09.19 at 8:02 am

Corporate welfare is a problem Garth and its turning people against true capitalism. This is not an illusion.

Blackberry got $40M dollars a few weeks ago. You know how much has been dumped into Bombardier.

There is but one reasons government choose to support corporations: jobs. Argue against that. – Garth

#162 Elcheapo on 04.09.19 at 8:07 am

Regarding Jeff Bezos; Geez Garth you would have had a major hate-on for Henry Ford. He purposely overpaid his employees so they could afford things, namely his products!

#163 Remembrancer on 04.09.19 at 8:13 am

#154 Ace Goodheart on 04.09.19 at 7:09 am

Not condoning illegal tax evasion, but if you happen to be in BVI like for you know, whatever, Foxy’s on Jost is definitely recommended…

#164 Captain Uppa on 04.09.19 at 8:35 am

>>Take more from Bezos and he loses the incentive to invest, take risks, innovate and expand. Ergo, fewer new jobs for families that need them. The logic here is abysmal. – Garth>>

I agree with you on that point, however I do not understand how the above is being bandied about as being impossible without the sacrifice of wage cuts and pension decreases (among other employee concessions) Is there not enough for both?

And yes, innovation steams ahead and new jobs are created via corportations’ vast wealth, but those newly employed will struggle all the same.

Record profits. Record market highs. And yet pensions are going the way of the dodo.

I believe Dalio is implicitly asking the question; how much is enough?

#165 maxx on 04.09.19 at 8:41 am

“Financial stress and anger make people do extreme things, vote for ‘none of the above’ and want instant change. As mentioned yesterday, all this emotion is often a substitute for taking personal action to change things. We all have the same tools for making, keeping and growing money. But when you expect your first house to be better than your parents’ last one, want new wheels plus two vacas a year and get pickled in debt to grab them, you’ve rolled the dice. Don’t expect a vote will fix such recklessness.”

All true. However, underpinning this financial stress and anger is the pain of endless worry about the future, as in it seems like it can only get worse: recency bias of a very negative sort.

Pain makes people do extreme things.

It is complicated: the post WW2 industrial boom has morphed into a system that has, over the past 30-odd years seen C-suiter types reap orders of magnitude more than their predecessors and the lower tiers less. Far less. Because life happens at an ever-increasing velocity, billions have had a chance to see all of this unfold……repeatedly.

Smart phones and other devices expose people to the obscene wealth of the highly privileged and it is impossible for them not to want at least a taste of that.

The tools are most definitely there, but not that many pick them up, just as they don’t pick up on saving, RSPs and TFSAs. Just this last weekend, I told someone about the TFSA and they had no idea.

Incredible, but it is pervasive.

#166 Remembrancer on 04.09.19 at 8:47 am

#116 Doug in London on 04.08.19 at 10:22 pm

Premier Doug Ford insists that the Ontario education system needs to be restructured. A good place to start is a mandatory course in finance and managing money in Grades 11 and 12.
——————————————————-
Right direction, but not sure DoFo can raise above his (no) buck-a-beer, corner store tailgating, messing with Toronto’s Choo Choos and redesigning Ontario’s stationary distractions. Instead of dogmatic Health curriculum tweak announcements that are more tuned to the “base’s” various stripes of fundamentalist dark fantasies then reality, yes, someone needs to be looking at math, finance, accounting and economics – and maybe, just maybe (shutter) even one less mid-20th century American social commentary novel study along with a lesser Willy Shakes play replaced by resume / cover letter / interview skills unit somewhere in the 4 years of High School English at every class level…

#167 crowdedelevatorfartz on 04.09.19 at 8:48 am

@#133 Ponzie Pilot
“Buddy,
Canada has just been declared one of the most corrupted country in the World on par with Russia, China and Columbia.
You can thank good ol capitalist Harper for that.”

+++++

Errrr, nooo.

I think the BC Liberals also shut down investigations into money laundering, drugs , etc.
As a matter of fact they disbanded the entire task force looking into money laundering when it was about to go public with its findings.
And just yesterday we have the NDP BC Attorney General questioning why there are zero….. zero federal police in BC investigating money laundering.

Apparently Canada has 25 positions available on the RCMP payroll for forensic financial auditors and they only have 8 people in those positions for… all… of… Canada.
Harper?
How long has Trudeau been at the helm before he wears some of this blame?
The person reporting these pathetic facts also reported that rather than press charges and go to Court these 8 auditors hand over their findings to the Civil Forfeiture ( proceeds of crime) agencies in each Province.

Its easier.
Send the local cops and Revenue Canada after them to seize property and the onus is on the person to prove they earned the money legally…..
But there are no criminal convictions.
And the Fentynal keeps flowing…..
The cash keeps rolling in.
The casinos keep washing money.
The condos keep getting built.

#168 Russ on 04.09.19 at 8:51 am

Nonplused on 04.08.19 at 7:58 pm

The problem with “taxing the rich” is that they don’t have any money, they have assets or valuable labor. Thus, income and wealth taxes, along with other taxes, get reflected in prices paid for goods and services.

When you get your car fixed at your favorite, or shall we shall we say “least hated” repair shop, your mechanic does not pay his income taxes, you do. The shop owner does not pay his income taxes, you do. The landlord does not pay his income taxes, you do. It’s all in the hourly rate they charge and it’s why a mechanic earning $35 an hour costs you $140 and hour. The mechanic, shop owner and landlord are simply points of collection for taxes you invariably pay…
================================

Hey Nony,

Very good point.

I do my own brake servicing on the old Toyota and Ford F-150. The after-tax considerations of this activity is huge!

And it’s been a while since we talked about fixing own own brakes.

Cheers, R

#169 Figure it Out on 04.09.19 at 9:16 am

Geez, Garth, I’m not espousing violence AT ALL. Five days ago I posted “Evolution or revolution — and I’m hoping for the former.

But history shows that when the gap between the rich and the poor gets too wide, the poor often take it upon themselves to narrow it. Here’s what a couple of billionaires have to say about it:

https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014

https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-parts-1-2-ray-dalio

And no, I don’t consider myself an economic failure. My net worth has all the commas in it that it will ever have. It is plenty, and it is enough.

There will be no revolution. They’re too busy texting. Cool your rhetoric. – Garth

#170 Gravy Train on 04.09.19 at 9:18 am

#140 Nonplused on 04.09.19 at 12:56 am
“Government workers do not pay taxes. They get paid out of taxes. It’s all just to make it look alike. If the government pays you $80,000 a year and then claws back $20,000 in taxes, what would the difference be if they just paid $60,000 a year tax free? It’s a round trip, for optics only. There is no reason to tax government employees, other that optics. You can just pay them less and it all works out the same. All it is is more paper work.” Are you saying that public servants have no value? Would you ban public services, if you had even a modicum of power? Is there no need for schools, libraries, police stations, squad cars, hospitals, ambulances, buses, etc., in your little world? I can certainly see why you’d dispense with libraries, since you don’t read books. :P

#171 The real Kip (Ret) on 04.09.19 at 9:30 am

“#156 Howard on 04.09.19 at 7:18 am
#43 The real Kip (Ret) on 04.08.19 at 5:42 pm

Does anyone really believe the Cons under Scheer will reverse current taxation rules brought in by the Libs? If yes, I have a bridge I’d like to sell you.

——————————————–

They might bring back the $10,000 TFSA at the very least.”

Oh you mean the $10,000 election plum that lasted a few months while Harper was wooing us to vote for him? Dream on Howie, not gonna happen!

#172 Grantmi on 04.09.19 at 9:33 am

No dedicated federal anti-money laundering police officers working in B.C.: report

https://globalnews.ca/news/5141963/no-dedicated-federal-anti-money-laundering-police-officers-working-in-b-c-report/

You can’t make this stuff up…..

#173 crowdedelevatorfartz on 04.09.19 at 9:41 am

@#137 Don.
“The one thing I do agree with is that with a recession the protests will come…1960-70s all over again….”

++++
Hordes of angry 60 and 70 year old Boomers throwing their dentures and canes at Trudeau because their pensions were reduced to pay for Millennial’s free laser tattoo removals …..
I…. cant….. wait.

#174 Basil Fawlty on 04.09.19 at 9:49 am

Ray Dalio on 60 minutes two days ago. He is a hedge fund manager worth $18B and says that wealth inequality in the US, is a national emergency.

https://www.cbsnews.com/news/ray-dalio-capitalism-needs-reform-wealth-inequality-is-a-national-emergency-60-minutes/

#175 Midnights on 04.09.19 at 9:53 am

#36 Long Branch Apprentice on 04.08.19 at 5:35 pm
——————————
Thanks for the YouTube clip…

#176 Shawn Allen on 04.09.19 at 9:57 am

Yes, Government Workers pay Taxes

#140 Nonplused on 04.09.19 at 12:56 am responded:
#89 Shawn Allen

Government workers do not pay taxes. They get paid out of taxes. It’s all just to make it look alike. If the government pays you $80,000 a year and then claws back $20,000 in taxes, what would the difference be if they just paid $60,000 a year tax free? It’s a round trip, for optics only. There is no reason to tax government employees, other that optics. You can just pay them less and it all works out the same. All it is is more paper work.

*********************************
In the example, the government worker is providing what is deemed to be $80,000 worth of labour. She gets to keep only $60,000 of the value she produces and $20,000 of the value of her labour goes to taxes.

In substance, she trades her labour for $60,000 “dollars” which are intangible “claim checks” that can be used in the private market to purchase what others have produced and contributes $20,000 of her labour to the collective cost of government services that the population requires.

The same thing applies to a private sector worker making $80,000 and paying $20,000 taxes.

Both pay income taxes.

#177 Babou on 04.09.19 at 10:01 am

Hey Garth, what about doing a post about universal basic income? This is an idea which I have been hearing about more and more these days as a way to address automation/AI taking over the job market and allow technology to live up to its original purpose of our making lives easier and better instead of making us work longer and harder. So far it is the only idea that I have seen put forward. Any thoughts?

#178 Not So New guy on 04.09.19 at 10:01 am

We keep hearing about taxes but that never changes much.

What about debt…at all levels!? Why does the financial media never talk about the elephant in the room but rather choose to point us at each other and the amount of taxes each of us pays? Are they all in the pockets of the banks?

We owe debt at the national, provincial, business and personal level! This drives the price of EVERYTHING up!

Without extreme sacrifice, you can no longer buy a house, start a business, buy a car or even get a good education without going into hock. This gums up EVERYTHING economically. THIS is the problem the financial media should be focused on

To start, we should demand the federal government put itself on a mortgage to pay off the federal debt COMPLETELY. There is no rational excuse for the federal government to owe a dime. That is the money of future taxpayers and we have no right to put our stinking paws on it

#179 D on 04.09.19 at 10:03 am

There is no justification for a billionaire, simply because no one needs a billion. Humans are selfish, animals do a better job of sharing a kill, humans would say i killed it, i own it.

#180 Phylis on 04.09.19 at 10:18 am

Garth, when is the last time you took a vac, particularly from the blog? I recommend one, you’ve earned it. It has to be wearing at times. Leave the daily post blank, have the blog comments setup so that they automatically echo back to the poster that posted the comment and not visible to others so that they can still hear themselves. This would also provide the posters an opportunity to reflect a little.

#181 Dan on 04.09.19 at 10:22 am

Has capitalism failed?

No, it’s turned into socialism like it always does. When socialism fails, like it always does, we’ll be back to capitalism. And on goes the cycle. I guess you could say capitalism always fails too … wow.

#182 Citizen on 04.09.19 at 10:34 am

Thankful you aren’t a politician anymore but are able to make things clear for us Garth!

#183 n1tro on 04.09.19 at 10:41 am

Has capitalism failed? Big hedge fund dude Ray Dallio has suggested so (he’s worth $17 billion), saying that without reform there’ll be conflict reminiscent of the 1930s – when ‘strong leaders’ (you know who) emerged to create order from chaos.
—————————
I could have sworn the second coming of “H” is already here in the form of Trump. That’s what the lefties keep telling me anyways.

#184 IHCTD9 on 04.09.19 at 10:49 am

#168 Russ on 04.09.19 at 8:51 am

Hey Nony,

Very good point.

I do my own brake servicing on the old Toyota and Ford F-150. The after-tax considerations of this activity is huge!

And it’s been a while since we talked about fixing own own brakes.

Cheers, R
____

Aye, combining the Labour and tax savings along with a vast sea of dirt cheap new/used parts online these days – you save HUGE every where you look when you do the work yourself.

Then there are the mechanics I know who moonlight at 50.00/hr Cash.

The higher taxes go – the more tax revenues will shrink. Why? Because more folks will be prodded into doing their own brakes or hire Joe down the road to do it for a stack of bills.

$130.00 in tax revenue on a 1000.00 repair bill just turned into $0.00 tax side deal, no income taxes on the labour either. Everyone wins except the government.

#185 Eks dee Siple on 04.09.19 at 10:58 am

#122 Sold Out… you worked for 24 years as a wage slave and with all the advantages of the boomer era, and still could not save up enough or create anything of value to the world in order to secure an income beyond your employment to be free. And at that point you were injured unfortunately. You don’t see the failure, here? You’re not even at step 1 yet. See my post from yesterday.

I’m sorry if it sounds harsh, but you are the one complaining. And I’m simply pointing out the answer.

I agree with raising minimum wage. Always have. That’s where I started $4. I hate the Conservative party in Canada with a passion. Biggest hypocrites and criminals ever. I agree young people have a hard time these days. I’ve lived through the 80s, 90s, 00’s, but the brutal truth is that young people have always had it tough (yes, even the boomers when they were young). Think and read more.

I have raised 4 kids, Gen X. Started from the bottom. Worth 8. I’ve given away my wealth three times to the cause of humanity and worked it right back again. Yes, all while taking care of my children, my wife, my parents and extended family. I just work harder than the average bear. That is the secret to true happiness. Realizing that money isn’t actually real. You will NEVER become wealthy clipping coupons or saving on taxes, or hating on other people. It begins at step one, realizing that there is a problem and that problem is YOU.

YOU not understanding how money really works. The commercial banks (run by about 15-20 private families in Canada) buy newly created money from us (central bank) at near 0%, then lend it back to us at usurious rates, creating wealth from thin air. Even a child can see this? They then use this extracted wealth to buy lobby groups, protract their reach into consumer goods, retail, media, telecoms, railways, airlines, etc… offering the illusion of choice (TurnerNation understands this).

The war is for your mind. Did none of you ever realize that a jet aircraft simply cannot carry enough fuel at its claimed rate of fuel consumption to make it to its destination? Do the math and you’ll see. They actually run on some kind of compressed air technology hidden from the general public, the jet fuel is only required for take-off and landing. (I used to fuel aircraft at Pearson, so I know how many litres went into even the largest aircraft). There’s your daily dose of conspiracy theory. Cheers.

#186 Eks dee Siple on 04.09.19 at 11:07 am

Most of the bread at the supermarkets in Canada is made at facilities owned by a Mexican conglomerate Bimbo. Most of the oil industry in Canada (crude production because we have no significant refining capacity) is owned by the Chinese CNOOC. Most of retail is owned by foreigners in Europe and the US. The auto pact way back when ensured that the auto sector is owned by foreign entities (mostly the US). Beer and alcohol is a racket run by a handful of foreign producers.

Canada was a post-nationalist state some 50 years ago. This politician or that politician has no power to change anything for you or your families… Why are people in general so misinformed? The media of course. Guess who owns it? Ha.

#187 dharma bum on 04.09.19 at 11:09 am

#73 Nonplused

Most people don’t want to be the manager for free, managing people is a lot of hassle because people are assholes.
——————————————————————–

Hahahaha!

So true.

I was a corporate manager for most of my working life.

It was a painful existence, primarily because of having to deal with people (i.e., employees). A never ending nightmare. Like being the orderly in an insane asylum.

Thanks to the availability of financial educational materials like this blog, books, good advisors, and the will to get out of the corporate slave rat race as soon as possible, I was able to escape the endless trauma of that horrible life.

Working income = Perpetual Misery.

Passive Income = Blissful Harmony.

#188 Eks dee Siple on 04.09.19 at 11:09 am

I won’t touch on healthcare, utilities, employment agencies, or the hedonists in Ottawa today. I’m tired. Have a great day. – XD

#189 IHCTD9 on 04.09.19 at 11:14 am

#176 Shawn Allen on 04.09.19 at 9:57 am

In the example, the government worker is providing what is deemed to be $80,000 worth of labour. She gets to keep only $60,000 of the value she produces and $20,000 of the value of her labour goes to taxes.
In the example, the government worker is providing what is deemed to be $80,000 worth of labour. She gets to keep only $60,000 of the value she produces and $20,000 of the value of her labour goes to taxes.

In substance, she trades her labour for $60,000 “dollars” which are intangible “claim checks” that can be used in the private market to purchase what others have produced and contributes $20,000 of her labour to the collective cost of government services that the population requires.

The same thing applies to a private sector worker making $80,000 and paying $20,000 taxes.

Both pay income taxes.
____

It doesn’t matter what the rate of pay of pay is or how much she gets to keep. The point was that the amount, no matter what is written on her paycheque; is funded by the taxpayer 100%.

#190 n1tro on 04.09.19 at 11:22 am

#78 Joe on 04.08.19 at 8:05 pm

Why cant retired people pay their taxes at the end of the year vs every quarter??
——————-
It’s harder for the government to collect taxes if you up and die. Quarterly…reduces the risk…because they care.

#191 tccontrarian on 04.09.19 at 11:28 am

#85 tccontrarian on 04.08.19 at 8:29 pm

Main problem is fiat money. The endpoint is nearing, so prepare:
https://www.amazon.ca/Everything-Bubble-Endgame-Central-Policy-ebook/dp/B0794RLM8R

TCC
——–
The author is a bullion licker. Like you. – Garth
//////////

Ok, the author (Graham Summers), may be a ‘bullion licker’ and you are definitely a bullion ‘hater’. Both are irrelevant.
Only thing that matters is whether his research (outlined in the book above), is correct.
I’d rather be a ‘bullion-licker’ (or more accurately, ‘holder’), than a ‘fiat-slave’, BTW.

TCC

#192 tccontrarian on 04.09.19 at 11:38 am

Maybe it’s time for GF to get a little up to speed on the role of Gold in monetary policy:

Trump’s Fed Picks Have Fond Memories of the Gold Standard

“…Cain is all-in for gold. In an op-ed for the Wall Street Journal that he wrote in 2012 after he had dropped out of the race for the Republican nomination, in part over accusations of sexual harassment, he wrote: “Gold is kryptonite to big-spending politicians. It is to the moochers and looters in government what sunlight and garlic are to vampires.” Moore, who holds a master’s degree in economics, is less of a gold bug than Cain. In a 2015 interview, he said he would prefer to peg the dollar to the value of a basket of commodities, not just gold. But he did say a gold standard would be “a lot better than what we have now.”

https://www.bloomberg.com/news/articles/2019-04-05/stephen-moore-and-herman-cain-are-warm-toward-the-gold-standard

TCC

Cain is an anachronism who says he wold never hire a Muslim and thinks the gold standard should be reinstated. He will never be confirmed as a Fed governor. Trump is losing it. – Garth

#193 Gravy Train on 04.09.19 at 11:57 am

#189 IHCTD9 on 04.09.19 at 11:14 am
“It doesn’t matter what the rate of pay is or how much she gets to keep. The point was that the amount, no matter what is written on her paycheque, is funded by the taxpayer 100%.” Is a public servant not permitted to engage in tax planning (so as to reduce the amount of tax otherwise payable)? Does it make sense to you that a paycheque to a public servant should just be an amount net of taxes? What does that even mean?

It didn’t make any sense to me—or even to Tater, for that matter. Here’s what Tater said: “If we had a flat tax system with no deductions this [argument] would make sense. Since we don’t though, it’s complete nonsense.” I tend to agree! :P

#194 n1tro on 04.09.19 at 12:01 pm

#134 Lorne on 04.09.19 at 12:32 am
#83 Basil Fawlty on 04.08.19 at 8:27 pm
26 billionaires own as much as the bottom 50% of humanity. Quick, look away, blame government and the socialists.

How many jobs have the 26 created, supporting how many families and economies? – Garth
…..
Ah, the continuous mantra of the right…..trickle down economics. But is that an actual fact or a dream?

https://medium.com/datadriveninvestor/trickle-down-economics-doesnt-work-so-why-do-republicans-keep-trying-it-3987459108b5
—————————–
Actrually, true right mantra is for poor people to just die already. Less strain on the system while true left would be to make everyone equal whether they deserve it or not.

Trickle down may not a poor person’s dream but at least it gives them a fighting chance. Life isn’t fair. Deal with it or just drop dead because no one will notice either way.

Nice link to op ed from such a revered source as Medium though. :P

#195 millmech on 04.09.19 at 12:09 pm

#128
Exactly you could redistribute all the wealth equally and I guarantee that all that wealth would be back in the hands of the same type of people in a generation or two.
Just wait as the housing meltdown happens and this becomes the underwater mortgage peoples cry. They “had” to buy that million dollar townhouse because they “needed” a place to live. Real estate is the best asset that never goes down in price and they would have to be an idiot to not own is what they believed.
Those heavily burdened by debt will blame the “shyster realtors”, the “banksters”, the “sleazy “mortgage brokers” for their own financially self inflicted seppuku.
People I know spend more time planning the family vacation, paid out of the HELOC of course than doing effective tax planning or investing for their future. To become financially competent and capable only takes 10 minutes a day while having your morning coffee. Yet for many this is too much effort, there is way too many funny memes to look at, keeping up with/ upstaging people on Facebook that you never see in person and just looking at stuff that you have no control over online and letting it affect you.
We could do this over and over again with the same results. Poor people are poor because they make poor people choices.

#196 Ace Goodheart on 04.09.19 at 12:15 pm

Interesting developments RE: T2 versus JWR.

T2 kicked JWR and Philpott out of Caucus.

He was required to get the vote of all 90 members of Caucus in order to do this. He apparently did not (he just personally ejected these two ladies, on his own initiative).

This is just getting worse and worse for the former drama teacher who used his Dad’s coat tails to climb to power.

Maybe Harper was right. He was just not ready…

#197 Dogman01 on 04.09.19 at 12:18 pm

Garth caused me to look for a summary of Capital in the 21 Century.

Taxes Matter
“The rise in the top-percentile income share in 13 countries was almost perfectly correlated with declines in top marginal tax rates in those countries. It’s also interesting that this huge rise in relative income inequality has brought no discernible economic benefit. Yes, the U.S. economy has grown a bit faster than those of other developed economies, but that’s purely because of population growth. Per-capita economic growth has been almost identical in the U.S. and Western Europe since 1980, and because of the skew towards the top here, U.S. median income has actually lost ground relative to other nations.”

https://hbr.org/2014/04/pikettys-capital-in-a-lot-less-than-696-pages

But Garth is right, you can’t beat them…so join them, make capital accumulation rather then consumer spending your goal.

#198 Shawn Allen on 04.09.19 at 12:29 pm

#189 IHCTD9 on 04.09.19 at 11:14 am argues:
#176 Shawn Allen on 04.09.19 at 9:57 am

It doesn’t matter what the rate of pay of pay is or how much she gets to keep. The point was that the amount, no matter what is written on her paycheque; is funded by the taxpayer 100%.

*********************
You are a very smart and practical man. That has been well demonstrated.

But you are wrong on this. Money has no tangible value other than a way to keep score and divide up the real value of goods and services created in the economy.

Government workers create value and trade part of that value for part of the what the private sector produces. And part of the value created by both groups is witheld by government as taxes. Both groups need what the other produces. An economy without government would be anarchy.

If it pleases you, you may consider that the government workers pays taxes through her efforts if not in money. If she works 8 hours and gets net pay for 6, how it that not tax? Oh yes, under your view her whole pay is a gift from you?

It is simply wrong to suggest that, for example, a utility worker employed by a government utility pays no taxes while a similar private sector utility worker does.

But no matter, your view is convenient and many share it. And your success in life is not changed by this erroneous view, so it is not a big deal anyhow.

#199 Dogman01 on 04.09.19 at 12:37 pm

My solution is a higher income tax rate on those with X amount of Wealth……so if you are broke but “movin on up” in a productive manner then a lower rate. When you have “made it”, say 2 Million in assets, only then a higher rate on income. This may cause some wealthy people to leave the income workforce but in today’s environment there is no problem filling good positions.
If I recall Tony Clement floated an idea of no income tax on your first $500,000. Interesting idea.

The gap I suspect is more related to wealth then income. Where with a Fibonacci sequence your wealth just keeps growing.

Garth is correct with Globalism and GATT, world Trade etc., free market Labour is now from a supply pool of Billions and that has lowered the value of labour, there are smart guys more hungry than North Americans all over the world.

It does seem WWI, the Depression and then WWII all reset the distribution patterns. We are rapidly going back to the unequal distribution problem and a modern reset like the previous cycle is unthinkable.

#200 miketheengineer on 04.09.19 at 12:47 pm

Garth et al:

I have to put my 2 cents in here. The government is increasing taxes, carbon tax (which is complete bull poop) because it is the easy thing to do.

What they need to do, Federal, Provincial, Municpal….is go into and look at the waste, excess people and excess benefits that the government has, and start to cut the fat. I would start with expenses of all these people in at all levels. The senator scandal a few years ago, along with this SNC thing is showing us that there is money in the system, it is not being used correctly

But this takes alot of hard work, and a set of steel cylindrical objects in a set of pants to do it, make it a mandate, and to actually do the work….because it will be work. Waving a hand and creating a new tax is not what the average Joe in Canada needs. We need to cut the fat in the system, eliminate the “fishy” stuff going on, come back to a fair and “just” system….where if you do something wrong, you need to do the time.

I have heard the arguments….I can’t cut this department…so and so’s son / daughter / spouse / cousin etc works there…..and the problem gets worse.

The more the government takes money from the working people, the more it decreases the “velocity of money” circulating in the economy. The carbon tax will kill the economy….period. Bravo government….bravo!

Have a great day Garth…the spring is here….

#201 PoorEngineer on 04.09.19 at 12:57 pm

First of all, thank you Garth for this blog. (I apologize for forgetting to thank you yesterday). It has really changed the way I look at life. If it wasn’t for this blog, I would be an amateur landlord fool and probably have a summer toy as well. Instead, we drive beaters and invested into what really matters in life: our family.

Second of all, I would like to thank all of you dogs that have responded. Just to clarify some things: we are not using our parents as “babysitters.” They simply live with us and for the days we both work (I am full time, wife is part time and switches as many shifts to the weekend as she can so this way WE raise our children), which is basically 4-7 days per month, they look after my little ones. They are all healthy and it’s no burden for them. Also, we don’t use them in any other way (they keep all the money they get, and don’t contribute to anything – we don’t let them to), and often take them with us when we go on vacation (we pay). In other words, we really try our best to honour them as they dropped everything to come to this country for us, and we feel honoured to be able to show our appreciation. Wife and I were never raised to feel entitled. In fact, we were the good kids all of our lives, and worked hard our entire lives. Our siblings did what they wanted with their lives (and continue doing so) and never helped their parents or never took them on any vacation. Yet they will expect their portions – divided evenly – when the old folks pass away…
The main reason they live with us is because they don’t drive anymore (I think they could be a liability) so we need to drive them wherever they need to go. Also, their English is not good enough to understand what the doctor tells them, so we need to take them to the doctor. And believe me, there are A LOT of visits (people get sick when they age…). Also, living close to their grandchildren will help them live longer.

So selling the house and rent would not be an option as we need a big enough place to fit everybody (and their different personalities – which there are lots). Renting such a “big” place will not be too different from my mortgage as rents are super expensive. I would probably save $1,000 per month but have the insecurity of being kicked out anytime and then having to change the addresses for many people and move the kids to other schools, and move furniture for three families; it’s too much of a headache. And old people don’t like change… Plus, my wife doesn’t like the idea of renting, at all…

Why am I still here? Well, we are worried what will happen to our parents as our siblings won’t care for them and fully gut them of money (which they probably still do, behind our backs, but not aggressively) as they are lazy leaches.

And no, I am not trash-talking Canada. It gave us a good education, and safety for my family. I am simply stating there is very little one can do to get ahead (legally). And caring for so many people doesn’t allow me to do something risky (like start a business); too many people depend on me.

No, I don’t want to make myself a victim here. I simply want to show my scenario, where two professionals with two kids (and parents) don’t have much money left over to invest, yet we are very good with our money. I know grass is not always green in the states; I’ve been there quite a bit and have family down there. But I see a lot more opportunities there now and a brighter future.

Also, what do you dogs think about this: does it make sense to remortgage my house into a 30 yrs mortgage, when my renewal is due? I would invest the difference into a diversified portfolio….

#202 IHCTD9 on 04.09.19 at 1:19 pm

#193 Gravy Train on 04.09.19 at 11:57 am
#189 IHCTD9 on 04.09.19 at 11:14 am

“It doesn’t matter what the rate of pay is or how much she gets to keep. The point was that the amount, no matter what is written on her paycheque, is funded by the taxpayer 100%.”

Is a public servant not permitted to engage in tax planning (so as to reduce the amount of tax otherwise payable)? Does it make sense to you that a paycheque to a public servant should just be an amount net of taxes? What does that even mean?

It didn’t make any sense to me—or even to Tater, for that matter. Here’s what Tater said: “If we had a flat tax system with no deductions this [argument] would make sense. Since we don’t though, it’s complete nonsense.” I tend to agree! :P
______

I don’t give a rip if a Public Service worker gets paid gross or net. I suppose being paid gross is more fair and apples to apples though.

My point was that no matter what is done, no matter the dollar values, no matter anything – the taxpayer funds it all 100% in cash.

Therefore – a Public Service worker does not enrich the Government with tax revenues like a Private Sector worker does.

#203 n1tro on 04.09.19 at 1:46 pm

#201 PoorEngineer on 04.09.19 at 12:57 pm
…remortgage my house into a 30 yrs mortgage, when my renewal is due? I would invest the difference into a diversified portfolio….
—————————-
1st. Sounds like you have a rotten family (siblings that is). How the same parents can raise 1 child with values and the other without is beyond me. Only thing I’m thinking is your siblings are younger and born here.

2nd. Why remortgage when you can sell at a profit. Wife doesn’t like renting? Well tough. LoL. Jokes aside, don’t like renting? Why not sell and pick a place cheap to live ie. Sell in Toronto and move to London. Bank the difference in portfolio making passive income. You are a professional, get a new job. Same goes for your wife, especially part time. Hell, depending on the industry, work from home.

3rd. Take your parents with you to the bigger, cheaper house in the new city. It’s a 1 time headache and sit back and enjoy your kids growing up while being with your folks before their lights go out.

#204 Figure it Out on 04.09.19 at 1:52 pm

“Thus, to the extent the market can bear it, any new or raised tax simply raises the price of things.”

This is what I call the “cost plus” fallacy — that most businesses figure out their costs, add a reasonable profit margin, and set prices there. They don’t. The smart ones are already charging what the market will bear. Does this look like a Cost Plus world?
https://www.yardeni.com/pub/sp500margin.pdf

“However, if only taxes were so benign as that. They aren’t. Because they distort prices, they distort the economy. Higher prices reduce demand. Reduced demand tends to lead to reduced supply. Less things get done because people simply cannot afford to buy as many goods and services as they would with a lower tax burden.”

This is the “government taxes me and burns the money” fallacy. If the federal government is running a $10 billion a year deficit, then it is spending $10 billion more in the economy than it is taking out in taxes. We spend a little on foreign aid and foreign military hardware (but so do other countries), but all the rest is spent in Canada. Government deficits are private sector surpluses.

“Most people don’t want to be the manager for free, managing people is a lot of hassle because people are assholes. So the manager wants $20,000 a year more. But since his marginal tax rate is 50%, to get $20,000 a year more the company has to pay him $140,000 a year.”

This isn’t how the labour market works.

“Ok, says AOC, Pocahontas, and Uncle Bernie, we’ll go the route of “wealth taxes”. Well, they have that already it’s called a capital gains tax.”

Yeah, no. In the US, you are only taxed when you sell. And if you die first, no tax is due and your legatees inherit, but with a new cost base equal to the value at the date of death.

“fully 50% of our voters have below average intelligence.”

It’s worse than that. An intelligent person doesn’t line up to vote in a riding where the result is preordained.

So sad that so many people agreed with you. Ask yourselves: Why does Garth work? What is his marginal tax rate? How does he set the price for his services? Why does he live where he does? The economy in microcosm, unlike what the above poster thinks.

#205 tccontrarian on 04.09.19 at 1:56 pm

Trump is losing it. – Garth

/////

OK, so you hate Gold and you dislike Trump, we know.

You were wrong about Trump’s chances of winning in 2016 and you’re going to be wrong about gold in 2019.
I try to learn from my mistakes (and I’ve made a few) – it’s one of my strengths.

I don’t see how financial ‘professionals’ don’t see that we’re in worse shape than in 2007/8. If ‘too much debt’ was the cause of the GFC, as CBs have now created more debt on Global scale, how is it going to turn out ok?
In light of this situation, the next ‘crisis’ HAS TO be worse than last one, IMO.

Time will tell, of course. I’ve got some yellow metal as ‘insurance’.
When the SP500 is 50-60% lower than current levels (I said ‘when’ not ‘if’ for a reason), many financial people will looking for other employment. I’m sure you’ll be ok though…

TCC

#206 IHCTD9 on 04.09.19 at 2:28 pm

#198 Shawn Allen on 04.09.19 at 12:29 pm
#189 IHCTD9 on 04.09.19 at 11:14 am argues:
#176 Shawn Allen on 04.09.19 at 9:57 am

It doesn’t matter what the rate of pay of pay is or how much she gets to keep. The point was that the amount, no matter what is written on her paycheque; is funded by the taxpayer 100%.

*********************
You are a very smart and practical man. That has been well demonstrated.

But you are wrong on this. Money has no tangible value other than a way to keep score and divide up the real value of goods and services created in the economy.

Government workers create value and trade part of that value for part of the what the private sector produces. And part of the value created by both groups is witheld by government as taxes. Both groups need what the other produces. An economy without government would be anarchy.

If it pleases you, you may consider that the government workers pays taxes through her efforts if not in money. If she works 8 hours and gets net pay for 6, how it that not tax? Oh yes, under your view her whole pay is a gift from you?

It is simply wrong to suggest that, for example, a utility worker employed by a government utility pays no taxes while a similar private sector utility worker does.

But no matter, your view is convenient and many share it. And your success in life is not changed by this erroneous view, so it is not a big deal anyhow.
___

Ok, I see what you are trying to say, but let’s just keep it simple with a question:

Where did the money on her (the Public Servant) paycheque come from?

You should be able to answer in one short sentence where you do not require a page worth of explanations to be understood.

So just answer it – and keep it SHORT. The tougher you find it to keep it short – the more reason you have to think twice about your answer.

I can answer with two words, I encourage you to do the same.

#207 Al on 04.09.19 at 2:41 pm

Just saw this tweet by John Pasalis:
@JohnPasalis
“I know for a fact, in our small brokerage, a few of our agents –and outside a lot more– they did not pay their taxes, their HST. They have huge problems with CRA because they don’t have income.” …
“Some are driving Uber because they can’t make ends meet”

#208 Sovavia on 04.09.19 at 2:48 pm

The after-tax income gap can be narrowed meaningfully in Canada.

According to the OECD, the latest Gini coefficient for household disposable income (the higher, the more unequal) were the following:

Mexico 0.459
USA 0.394
UK 0.358
Canada 0.322
France 0.294
Germany 0.292
Sweden 0.281
Norway 0.252
Denmark 0.254

http://www.oecd.org/social/income-distribution-database.htm

#209 NoName on 04.09.19 at 3:01 pm

@eks de scpile

You were doing so good until you put concpiracy and jet engine. You are correct it is compressed air, basic principles of bernulis principle, mechanical design and fuel. When you consider that gog airplane ises 10-12 tons of liquid fuel for an hour flight its not that much considering how much distance it covers vs speed va gross weight.

http://ffden-2.phys.uaf.edu/webproj/212_spring_2014/Joseph_Ofeldt/Joseph%20_ofeldt(2)/basic_thoery.html

And bonus illusion of choice, my favorite.
https://www.visualcapitalist.com/wp-content/uploads/2016/07/consumer-brands-full-size.html

#210 n1tro on 04.09.19 at 3:21 pm

#205 tccontrarian on 04.09.19 at 1:56 pm

I don’t see how financial ‘professionals’ don’t see that we’re in worse shape than in 2007/8. If ‘too much debt’ was the cause of the GFC, as CBs have now created more debt on Global scale, how is it going to turn out ok?
————————
Correct me if I’m wrong but the GFC wasn’t created by too much debt. It was created from debt back with shit mortgages, resold as AAA grade investment. Lots of people gorged on housing at the time because banks were giving out liar loans because they could wrap it up in a AAA rated debenture and resold where even more people gorged on that. The “crisis” was the label used to justify bailing out the banks as they threaten to stop lending given the massive amount of losses they would have to take. This scare tactic was further justification to print (more precisely enter more zeros with a computer) money to buy garbage paying government bonds to keep interest rates super low which is now slowly unwinding.

I think the game can be kept going as long as there is a coordinated slooooow unwinding which CBs around the world are doing thus making gold as a hedge for inflation (from the printing) not practical to hold.

Despite this, I still like my gold. Makes me feel like a rapper in one of those MTV videos.

#211 Bagged Dogs on 04.09.19 at 3:26 pm

Rules are meant to be broken!

https://twitter.com/WillSCourtney/status/1115023465050968064/video/1

#212 Doug in London on 04.09.19 at 3:27 pm

Lots of people look at the income gap, conclude the system is rigged against them, and vote for people who say they’ll burn it down.
—————————————————-
Comical, isn’t it? Many of them voted for Donald Trump, who gave big tax breaks to corporations and ultimately helped people like me who own stocks of U.S. companies and diddly squat, zip, zero, zilch for the poorer people who voted for him.

@Remembrancer, post #165:
You’re one of a small minority who actually gets it. Changes are necessary to the education system in this modern world where many of the good jobs are going to educated knowledge workers and even more so in years to come. As for high school English, I learned more about good writing skills in a college one semester technical writing course than in all those years in high school. Serious education reform from this government? Don’t bet more than a nickel on it.

#213 IHCTD9 on 04.09.19 at 3:54 pm

#150 Captain Uppa on 04.09.19 at 6:42 am

Mr. Bezos is worth 152 billion running a 1 trillion dollar company. Median pay for employees is a paltry $28,446. Now of course the mail room guy shouldn’t get paid 152 billion, but surely we can reason a better wage median to meet cost of living and in fact thrive above it.
___

Bezos pays himself about 82K per year.

His entire 152 Billion net worth (ie Amazon stock) divided by his total number employees works out to a great big one time payout of 275.00 each. Then there’s nothing left for the year after that.

Amazon’s success is built on selling for less, and making it easier than going to the Mall. If he starts handing out real raises that actually make a difference – it might bring Sears back to life if you know what I’m saying.

#214 Blacksheep on 04.09.19 at 4:12 pm

IHCTD9 # 206

I agree with Shawn on this.

The government has a park and the grass needs to be mowed, once a week.

Two most obvious options:

1) A government employee, use gov. owned mower and cuts the grass weekly.

2) A private contractor, uses her privately owned mower and cuts the grass weekly.

Both 1) & 2) provide needed services.
Both 1) & 2) are compensated for their services, via government revenue.

“Where did the money on her (the Public Servant) paycheque come from?”

The argument that because, service # 1) is directly employed by the gov and thus creates no value, doesn’t hold water, as both services are a 100% cost of running a gov and both create equal value (lawn gets mowed) just by different sources of labour.

The real difference that potentially costs the public more dollars:

A common made argument / complaint made is because service # 1) is an employee of the gov, she will very likely be less efficient at performing the job, as she does not have the market pressures to complete the task within a fixed time, like the private sector does.

Because service # 2) is contractor that must compete with other contractors, in an free market ‘bid’, the cost of the service provided, will very likely be lower than service # 1) due to the efficiencies forced by said free market.

Old joke,

Q: “What’s orange and white and sleeps three comfortably?”

A: “A municipal Surrey works truck”

#215 not 1st on 04.09.19 at 4:15 pm

Garth, maybe some time away from Toronto is what you need. You aren’t seeing whats going on in the country.

Maple Leaf Foods To Open Plant-Based Protein Facility In Indiana, After Announcing Canadian Job Cuts

https://www.huffingtonpost.ca/2019/04/08/maple-leaf-foods-indiana-plant-based-protein_a_23708231/

#216 n1tro on 04.09.19 at 4:22 pm

#213 IHCTD9 on 04.09.19 at 3:54 pm

His entire 152 Billion net worth (ie Amazon stock) divided by his total number employees works out to a great big one time payout of 275.00 each. Then there’s nothing left for the year after that.
————————
Even less. Jeff’s getting a divorce…$152 divided by 2 is his net worth.

#217 Penny Henny on 04.09.19 at 4:58 pm

#213 IHCTD9 on 04.09.19 at 3:54 pm
#150 Captain Uppa on 04.09.19 at 6:42 am

Mr. Bezos is worth 152 billion running a 1 trillion dollar company. Median pay for employees is a paltry $28,446. Now of course the mail room guy shouldn’t get paid 152 billion, but surely we can reason a better wage median to meet cost of living and in fact thrive above it.
___

Bezos pays himself about 82K per year.

His entire 152 Billion net worth (ie Amazon stock) divided by his total number employees works out to a great big one time payout of 275.00 each. Then there’s nothing left for the year after that.
//////////////

I think it’s time to change the batteries on your abacus

#218 Gravy Train on 04.10.19 at 6:30 am

#206 IHCTD9 on 04.09.19 at 2:28 pm
“Ok, I see what you are trying to say, but let’s just keep it simple with a question: Where did the money on [the public servant’s] paycheque come from?” Let’s keep it even simpler with this question: Will you be paying taxes for the rest of your life for the provision of public goods and services? Answer: Yes! :P

#219 Gravy Train on 04.10.19 at 6:43 am

#214 Blacksheep on 04.09.19 at 4:12 pm
“The government has a park and the grass needs to be mowed, once a week.” What you and others haven’t mentioned is that the private sector has no (monetary) incentive to provide pure public goods (such as national defence and public infrastructure) since such goods are non-rivalrous and non-excludable, and consumers can always understate their preferences for them. Hence the need for government and taxation. QED :P
https://en.m.wikipedia.org/wiki/Public_good
https://en.m.wikipedia.org/wiki/Free-rider_problem
https://courses.cit.cornell.edu/econ335/out/samuelson_pure.pdf