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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Land Shark who wrote (995682)	1/22/2017 6:22:26 PM
From: James Seagrove	2 Recommendations Recommended By FJB Mick Mørmøny Respond to of 1576230

The promos of Harpy Hillary The promises of Zero

To: Land Shark who wrote (995682)	1/22/2017 6:25:31 PM
From: James Seagrove	1 Recommendation Recommended By Mick Mørmøny Respond to of 1576230

Truth is you're going to be taxed in two countries and your glorious leader is about to hike capital gains. Foreign workers in the US might have a few surprises in store for too! Trudeau may tax more capital gains. What to do. Justin Trudeau. Source: Department of Defence. To gauge the implications and likelihood the cash-strapped Trudeau government may boost its tax haul from your capital gains - a widely speculated possibility ahead of the government's budget day next week - I spoke with CIBC's tax guru Jamie Golombek, Managing Director of Tax & Estate Planning, on Tuesday by phone. First the why. Why is the capital gains tax an easy - even smart - move politically speaking for Trudeau? (Which is not to say it's a good move for the economy. But that's a subject for another day.) "If you look at capital gains - who pays the capital gains tax and where that money comes from - you can see it's the wealthiest of Canadians that pay the majority," Golombek says. And a small slice of the wealthiest Canadians at that. "If you look at the latest stats that are available, there were $20 billion dollars of capital gains (last year) and 75% were generated by those making over $100,000 a year," Golombek says. "And that's the top eight percent of all tax filers. "And in fact if you look at just over half the total dollar worth of gains, they were really reported by those making over $250,000, which is not even the top 1% of earners." It makes for an attractive target for a voter-sensitive government running a large deficit, in other words. Because, if you rake in more from capital gains, how many people are you going to aggravate? Not the vast majority of Canadians that voted for you. Just a miniscule proportion of Canadians who invest. "So it seems like an easy thing for the government to go after," Golombek says. "It's not politically dangerous in terms of their voter base." In speaking with his colleagues, I asked Golombek if there was a sense an increased haul of capital gains was inevitable. The prospect has been raised in recent months with a government report flagging how much revenue it has missed out on with the current system - which 'only' taxes 50% of capital gains. And because it's clear the Trudeau government - left leaning - will be looking at ways to fill a growing budget hole. "No, I don't think so," Golombek says. "I think there's a fear." That said it is something lawyers and accountants are bringing up with advisers as something they should raise with clients. "We don't think it will necessarily happen," he says. But adds, "It's certainly a possibility." Which brings us to the nut of the issue ahead of the government budget, to be released next Tuesday: How do you react to the possibility? Do you sell investments in anticipation of a higher tax (and possibly buy them back thereafter.) Or do you sit tight? Golombek generally advises not to react rashly. "And at the end of the day what are you going to do about it?" he says. "Are you going to realize capital gains on purpose just in case? I think that's a foolish thing to do. Why would you trigger a tax loss liability right now when you have no idea if it will happen? It could be that a subsequent government decides to drop it again. So if it does go up on Tuesday and a subsequent government drops it, you've crystallized gains for no reason." There is at least one notable exceptions that Golombek points out. "The only time we're seeing people move on this, is where they already have a transaction anyway that's going to close sometime in 2016. And they say, 'You know what if I can somehow accelerate the transaction and close it before the budget date I may as well do it just to be sure.' Other people are saying, "Look, I can do an estate freeze transaction. I'm gonna freeze the value of my company anyway. I might as well do it before Tuesday, just in case." Otherwise Golombek suggests holding off. "For the average person, I'm not overly worried about it." You can only hope Trudeau doesn't touch the tax rule.