Support strong Canadian climate journalism for 2025
The parliamentary budget officer estimates the Liberals' increase to the capital gains inclusion rate will bring in $17.4 billion in revenue over five years.
That's two billion dollars less than the federal government projected in its spring budget.
The Liberal government proposed making two-thirds rather than one-half of capital gains — the profit made on the sale of assets — taxable.
The proposal was met with pushback from business groups as well as physicians who expect to be affected by the change.
Prime Minister Justin Trudeau has defended what is effectively a tax increase, arguing that it is about delivering generational fairness to young people who need the government to spend more on things like housing.
The increase to the inclusion rate came into effect on June 25, although legislation has yet to pass Parliament.
This report by The Canadian Press was first published Aug. 1, 2024.
Comments
L. Randall Wray is a Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY
http://neweconomicperspectives.org/2014/04/mmt-policy.html?utm_source=f…
"..a lot of progressives think we need to tax the rich in order to spend on the poor. That’s just wrong, we don’t need to tax the rich more to spend more on the poor, because our sovereign government can’t run out of money, it can always spend more on the poor without taxing the rich. You want to tax the rich because they are rich, you don’t tax them in order to give more to the poor. You tax the rich because they’re filthy rich and so you shouldn’t link the two in policy. In the public’s mind we need to do both, but they are separate policies. You set the tax on the rich not to equal spending on the poor. You set the tax on the rich and make it high enough so that they’re not rich. If that’s your goal – get rid of the excessive riches of the rich -you tax enough so they are not excessively rich. It’s an extremely hard thing to do politically. The final thing is rather than trying to do this with taxes, which is hard because once people have income, especially high income, they have an incentive to protect it, the means to protect it, the means to influence policy, and they are extremely powerful. In practice I think in the US, it is actually impossible to take away income from the rich through taxes because they buy off the politicians, they get special exemptions, they never pay high tax rates, they hide their income, they put it overseas, and so on. The only way that will work in a country like the U.S. is to prevent them from earning the income in the first place. You have to do something like set maximum pay for CEOs."