Canada Needs an Inheritance Tax Now!
Your first link, and to some degree your second link, seem much less convinced than you that we need an inheritance tax now.
I don't see why anyone would object to an inheritance tax. After all, you are dead when you pay it. It is not as if you can use the money then. As for your kids, you spend all your productive years bringing them up and supporting them. As far as I am concerned, they can let the kids have $5,000-10,000 each and let the government take the rest. They can have a good party in my honour and then get the hell back to work.
You don’t pay it. Those who inherited do. Why should they get off tax free while someone working a low paying job has to pay.
So what if people give away or spend their wealth before they die to help their descendants reduce or avoid an inheritance tax? What are the unintended negative consequences of inheritance taxes? What's its impact on investment and productivity?
What impact on investment and productivity? As for giving it away, a gift tax with an exclusion of, say, $10,000 annually, as in the U.S., could be implemented in conjunction with the inheritance tax.
Wealth Concentration in Canada Since 1999
https://www.policyalternatives.ca/publications/reports/born-win
"Our failure to adequately address the growing gap in average income is producing outrageous fortunes among Canada's wealthiest family dynasties."
Rich and Tasty: Recipes for the New Class Warfare
https://boingboing.net/2011/10/10/rich-and-tasty-recipes-for-the-html
"This is the guide the 99% will turn to when the opportunity to feast on the fortunate presents itself..."
You don’t pay it. Those who inherited do.
The estate pays it. That's a legal distinction and it can also make a difference dollar wise, e.g. where the deceased and the heirs live in different jurisdictions.
That sounds like an estate tax, and I don't think Canada imposes an estate tax, outside of any tax arrears owing by an estate.
But perhaps Josh is only supporting an inheritance tax, in which case his claim could be amended to:
You [won’t] pay it. Those who [inherit your money will].
The only problem with an inheritance tax is that I think a lot of people want to believe that they can leave something for their children (notwithstanding those millionaires who leave their kids nothing to teach them a valuable lesson about hard work or whatever).
And the problem with an estate tax would be that it's a new tax on money you've already been taxed on, just because you went and died.
Perhaps a threshhold level should be set for when an inheritence tax kicks in. In this day and age, even an individual inheritence of $100,000 is not exactly establishing a wealthy elite but perhaps when individual inheritence is at a higher rate, some sliding scales should be used to tax those winfalls. Don't lottery winnings get taxed? I think inheritence is like a lottery win - unearned monetary windfall.
Lottery winnings are not taxed in Canada. I think an inheritance tax with a $500,000 threshold and a progressive scale after that would be a good idea. In my ideal world that money would go into a venture capital fund for worker owned production companies designed to encourage innovative local businesses.
That sounds like an estate tax, and I don't think Canada imposes an estate tax, outside of any tax arrears owing by an estate.
But perhaps Josh is only supporting an inheritance tax, in which case his claim could be amended to:
You [won’t] pay it. Those who [inherit your money will].
The only problem with an inheritance tax is that I think a lot of people want to believe that they can leave something for their children (notwithstanding those millionaires who leave their kids nothing to teach them a valuable lesson about hard work or whatever).
And the problem with an estate tax would be that it's a new tax on money you've already been taxed on, just because you went and died.
To you that might be a problem. Once again, “you” are not paying the tax. You are in the hereafter, or the ground. The people paying the tax are people who did not earn the money.
Lottery winnings are not taxed in Canada. I think an inheritance tax with a $500,000 threshold and a progressive scale after that would be a good idea. In my ideal world that money would go into a venture capital fund for worker owned production companies designed to encourage innovative local businesses.
Yes, a $500,000 threshold would be good. The purpose of the tax is not just to raise money, but to some extent break up large concentrations of wealth.
<And the problem with an estate tax would be that it's a new tax on money you've already been taxed on, just because you went and died.
If I work for a corporation, the money they pay me has corporate tax levied on it, then income tax (if they pay me enough). When I spend it, I then have to pay sales tax. Not to mention the taxes that were paid by the people who bought whatever the corporation produced, giving the corporation money to pay me, and on and on, in infinite regress back to Confederation. There's no rule saying a dollar can only be taxed once (or else it'd have to be taxed at the beginning, when the Bank of Canada prints it). Generally speaking, it gets taxed when it changes hands (except property tax, which you pay annually just for owning). When you die, and leave it to your heirs or beneficiaries, it's changed hands. I see no reason why inheritance should be less taxed than income.
Generally speaking, it gets taxed when it changes hands (except property tax, which you pay annually just for owning). When you die, and leave it to your heirs or beneficiaries, it's changed hands. I see no reason why inheritance should be less taxed than income.
OK. But then I think you're talking about an inheritance tax (levied on the lucky recipient) rather than an estate tax (levied on the estate of the unlucky one).
If they had 100% inheritance tax after say $10,000, the person would have a great incentive to enjoy their own money before they died. They could move into a better nursing home, maybe, or go on more trips. I think $500,000 is way too much. You are giving your own children incentive not to work, which is a very bad thing. Why would you want to do that to them?
Generally speaking, it gets taxed when it changes hands (except property tax, which you pay annually just for owning). When you die, and leave it to your heirs or beneficiaries, it's changed hands. I see no reason why inheritance should be less taxed than income.OK. But then I think you're talking about an inheritance tax (levied on the lucky recipient) rather than an estate tax (levied on the estate of the unlucky one).
Six of one, half a dozen of the other. Simply a matter of timing.
OK. But then I think you're talking about an inheritance tax (levied on the lucky recipient) rather than an estate tax (levied on the estate of the unlucky one).
What is unlucky about being dead? It is neither lucky nor unlucky. It is just dead. Can't come too soon...
Six of one, half a dozen of the other. Simply a matter of timing.
Not exactly, as I understand it. Suppose I die with $200K, and I will $100K to my child and the other $100K to a charity.
With an inheritance tax, my child would be taxed on their $100K.
With an estate tax, the full $200K would be taxed prior to being divided between my child and the charity.
In theory, yes. But estate taxes usually have exemptions that inheritances taxes don’t.
If I work for a corporation, the money they pay me has corporate tax levied on it
Nope. Taxable corporate income is after wages and all other expenses are deducted.
The usual dichotomy present here: those without inheritance favour an inheritance tax; those without a taxable estate favour an estate tax and those with nothing to steal don't concern themselves with identity theft.
In my opinion, any inheritance tax is only a component of the much larger issue of income inequality. If income inequality can be addressed, then equality of opportunity is also addressed leading to more productivity and better living standards.
While Mr Dressup can squander such additional tax income on vacations and empty virtue signalling with ease, don't expect the party that allowed the Eatons, Irvings, Bronfmans, ad nauseum to move their fortunes offshore tax free to do diddly about it.
A tax on excess wealth is a just and progressive tax because the more wealth grows, the less justification there is that it is 'earned'. Beyond a certain sustenance level for kith and kin, wealth is simply a self- sustained economic rent seeking mechanism that 'earns' nothing, produces nothing except minor management costs. The entire premise is based on leveraging the political and judicial system to protect 'wealth', not the populace.
An estate tax is a good idea, but at the same time it would make little difference in terms of income inequality or the deficit. It is one small part of a greater taxation system overhaul that Canada sorely needs.
Also an estate tax, if we take the American model wouldn't touch the vast majority of Canadians, only the very wealthy (I believe in the US everything under 5 or so million is exempt.) Maybe lower that to somewhere around 1 million (2 million if you want to be more conservative) for the entire estate including house and other assets as being exempt, everything above that tax at somewhere around 50%.
Maybe lower that to somewhere around 1 million (2 million if you want to be more conservative) for the entire estate including house and other assets as being exempt, everything above that tax at somewhere around 50%.
Most of the time that wouldn't really be contentious. But in some markets (e.g. Toronto, Vancouver) a fully detached house bought for (say) $42K in 1960 might be worth several million today.
Taxing that house at any time other than at the time of sale means that people who probably don't have a half-mil sitting in their savings account have to pay taxes on a resource that, to them, is primarily four walls and a roof.
Now that said, if you get $3M for the house your parents bought 60 years ago on one salary, I'm not averse to you paying substantial taxes on it because when you sell that home you ACTUALLY HAVE THAT MONEY. But being taxed more now solely because some investor would pay lots for your house seems a bit illogical. When it comes to income tax, for example, if you didn't work and earn money, we don't tax you on what some "estimator" estimates you could have earned if you'd only worked at the job they think you could have had.
Also, without an adequate threshold this would be a recipe for cash-poor farmers and ranchers and business owners (like homeowners) to be forced to sell to those who have that kind of cash on hand.
In effect, concentrating wealth even more, or at the very least forcing them to let some bank put a tap in their vein just to stay afloat. I think kropotkin was starting to push this into the range (with a sliding scale above that) where it needs to be. After all, the people this is really directed at are those who have hundreds of millions to billions.
This tax isn't really going to hurt them at all anyway, just even things out. But set it too low and you would wind up seriously hurting those who don't have the same resources.
Nowadays a million bucks will get you a really crappy vacant lot in Vancouver, if you are lucky.
Yes, the purpose is to prevent a hereditary financial oligarchy. Exclusion in the U.S. for primary residences is common. Very few “family farms” and businesses are touched.
It seems to me that in the countries that have them, inheritance taxes and/or estate taxes haven't done much to reduce inequality and haven't raised that much revenue. I'm not sure why.