Has B.C. crossed the Rubicon ?

[deadspace]

It was once the widespread belief of citizens in this country that the taxation of assets was off limits

This may no longer be the case

 

THis should be on everyones radar  -- its a relatively benign way to start off a process that could lead to a class war

After all - is that cash in your bank account off limits ?  Not many have the savings you do -- why cant you give a little bit more to help out ?

 

 

http://vancouversun.com/opinion/op-ed/elizabeth-murphy-b-c-taxes-need-a-second-look

[EliG]

It was once the widespread belief of citizens in this country that the taxation of assets was off limits

 

I have two words for you.

 

property taxes

[netnet]

two more words:

 

estate taxes

[rb]

There is no estate tax in Canada. But yes, property taxes are a form of capital taxes. Also not until long ago we had corporate capital taxes. So I don't think there's really a rubicon there to be crossed.

[RichardGibbons]

I'm not a fan of wealth taxes, but there are few alternatives. In BC, because of foreign capital, we've ended up in a situation where the people who own the most expensive houses are declaring the lowest income.

 

So, if you want to maintain your tax base, you have several options:

[*]Increase the taxes the asset-poor Canadians pay in order to pay for the infrastructure used by wealthy foreigners who declare little or no income

[*]Ban foreign investment & audit the heck out of people who buy expensive houses while declaring no income

[*]Add an asset tax that will hit people even if they don't declare an income

 

I think #2 is the most reasonable option, but #3 is far easier to do (and I think the NDP government would already be predisposed to doing #3.)

 

[DooDiligence]

We had an intangible property tax here in Florida which was legislated in 1999.

It was calculated using a crazy formula involving investments, interests in LP's & receivables, among other things.

 

I would receive a form every year, which I promptly threw in the trash.

Nobody ever came to dun me & it was finally repealed in 2007.

[netnet]

There is no estate tax in Canada. But yes, property taxes are a form of capital taxes. Also not until long ago we had corporate capital taxes. So I don't think there's really a rubicon there to be crossed.

More properly, estate tax the capital gains due on death.

 

[rb]

There is no estate tax in Canada. But yes, property taxes are a form of capital taxes. Also not until long ago we had corporate capital taxes. So I don't think there's really a rubicon there to be crossed.

More properly, estate tax the capital gains due on death.

I don't understand what you are trying to say? Should one not have to pay taxes on capital gains?

 

Also specifically tax arising from terminal returns there are ways to mitigate or avoid them all together. If one is looking at a large tax bill, then one has the resources to engage engage the services of competent estate planners.

[gokou3]

I read sometime ago that Richmond is one of the poorest communities in BC - ranked by income, of course.  Go figure.

 

There are people who live in $5+ million dollar homes and receive childcare benefits due to their "low incomes".  Their income may not even pay off their property tax.

 

Why would one support a system where people could bring their wealth to Canada, not work for a single day here and hence not pay any income tax, and be eligible automatically for all benefits (healthcare, infrastructure, etc), is beyond me.

[SharperDingaan]

I'm not a fan of wealth taxes, but there are few alternatives. In BC, because of foreign capital, we've ended up in a situation where the people who own the most expensive houses are declaring the lowest income.

 

So, if you want to maintain your tax base, you have several options:

[*]Increase the taxes the asset-poor Canadians pay in order to pay for the infrastructure used by wealthy foreigners who declare little or no income

[*]Ban foreign investment & audit the heck out of people who buy expensive houses while declaring no income

[*]Add an asset tax that will hit people even if they don't declare an income

 

I think #2 is the most reasonable option, but #3 is far easier to do (and I think the NDP government would already be predisposed to doing #3.)

 

All they need do is raise utility rates by neighborhood. Charge 2-3x the going rate to deliver utilities to the 'magic kingdoms' (water in, sewage out). Charge 4-5x the rate for septic tank 'approval', and 3-4x for truck delivery of water (road/wear, polution tax, etc). Publicly prosecute the first few trying to bribe their way out.

 

SD

 

[scorpioncapital]

One is not eligible for infrastructure, it just is for being there. Healthcare has no real additional cost. I mean countries in Europe serve anyone , you just pay cash or through private health insurance (also a pretty small fee). You can go to private clinics (but there are hardly any in canada and that is a criticism of the healthcare system not that the wealthy choose to come to a nation that has limited healthcare options) . I've lived in countries that had no capital gains tax and very low flat income tax. All medical is included in a small fee. What's wrong with that? They get capital flowing in which is spent around. Even investment in  real estate has benefits if the owner is living somewhere else. There is a fundamental mismanagement of resources I think in some countries versus others. Also I believe the issue is this wealth is coming but they are not declaring themselves as residents. Smartly so! Canada has a departure tax. If they became resident and their assets globally increased in value they would have to pay a departure tax when leaving even if they don't spend time in canada. Doesn't sound like a great deal so I would probably try to do the same. However I agree that collecting child benefits or gst credits is silly. They should just cross-index it against total assets. But I also believe they should stop charging exit taxes. It's not like there is some great privilege to using the roads. Every country in the world would laugh at the idea of charging for the use of day to day things, even more-so if one is spending more time abroad than domestically.

 

 

[SharperDingaan]

Quite agree, it's the smart thing to do.

 

But I'll also rapidly pay more - right now; if you simply cut off the water to my lot, and block my sewage outlet (infrastructure)!

And I cant get out of it unless I either pay up, or sell up!!

 

Welcome to the gilded cage.

 

SD

 

[gokou3]

One is not eligible for infrastructure, it just is for being there. Healthcare has no real additional cost. I mean countries in Europe serve anyone , you just pay cash or through private health insurance (also a pretty small fee). You can go to private clinics (but there are hardly any in canada and that is a criticism of the healthcare system not that the wealthy choose to come to a nation that has limited healthcare options) . I've lived in countries that had no capital gains tax and very low flat income tax. All medical is included in a small fee. What's wrong with that? They get capital flowing in which is spent around. Even investment in  real estate has benefits if the owner is living somewhere else. There is a fundamental mismanagement of resources I think in some countries versus others. Also I believe the issue is this wealth is coming but they are not declaring themselves as residents. Smartly so! Canada has a departure tax. If they became resident and their assets globally increased in value they would have to pay a departure tax when leaving even if they don't spend time in canada. Doesn't sound like a great deal so I would probably try to do the same. However I agree that collecting child benefits or gst credits is silly. They should just cross-index it against total assets. But I also believe they should stop charging exit taxes. It's not like there is some great privilege to using the roads. Every country in the world would laugh at the idea of charging for the use of day to day things, even more-so if one is spending more time abroad than domestically.

 

Infrastructure costs money to maintain... and in many cases their deterioration is inline with usage.. and sometimes the cost is not monetary, but in the declining level of service.  Vancouver has the second worst traffic jam in NA.

 

Healthcare has no real additional cost?  I am not sure how to respond to that.. in any case, I wouldn't want my tax dollars go to the treatments of abled people who just happen to be a resident and have never paid income tax because they are rich enough to not need to work.

 

And for departure tax... I actually never heard of them; not saying it doesn't exist, i just don't know.  Perhaps because I have never heard people paying them?  When someone decides to leave for good, I am not sure if they would have the appetite to pay for a departure tax.  Not like they would get stopped at the airport for not paying the tax...

[rb]

 

And for departure tax... I actually never heard of them; not saying it doesn't exist, i just don't know.  Perhaps because I have never heard people paying them?  When someone decides to leave for good, I am not sure if they would have the appetite to pay for a departure tax.  Not like they would get stopped at the airport for not paying the tax...

There is indeed something called a departure tax. It's not some fee that you need to pay in order to leave or anything like that. It arises from the fact that in Canada you can defer you taxes on capital gains until you sell the investment. So when you permanently leave Canada for another jurisdiction you trigger a deemed disposition and have to pay tax on outstanding capital gains. Which is totally fair btw, you don't get to avoid paying taxes on capital gains by skipping town.

 

Also in many cases you can't avoid paying the tax just by taking off. By virtue of tax treaties we have with many countries the tax authority in your new jurisdiction will collect the tax owing on behalf of the Canadian government. I don't think we have this agreement in place with China, but I'm not sure. If we don't I think we will in the not too distant future. China wants to collect on its taxes as well and given the level of wealth transfer between China and Canada I figure China is interested in the topic.