Canadian Politics Today

Yeah, you have any idea how small many of these stocks are and how easily they can be moved by people selling? You have any idea what market sentiment is like when momentum moves up or down? TD, one of the biggest, most widely held banks in Canada dropped over 5% Friday because of a CBC report that some tellers were pressured into deceptive practices. No one actually thinks this will have any impact on the profits of that bank, but it doesn't matter. You had people bailing in anticipation of other people bailing in fear of some sort of investigation.

As Benjamin Graham said: in the short run the market is a voting machine; in the long run it's a weighing machine.

I do not concern myself with the idiotic day to day changes in the market because those are based on noise and emotions and, oh, look, the guy on the tee vee said it's a dead cat bounce so lets sell the market short....

Sure, the market will have a little freakout. Then it will get back to normal as people realize that rationally it still makes sense to make money since taxes are a fraction of the income and if the fundamentals of the investment is sound then, meh, whatever, in the long run the invesment should generate a satisfactory return, or not, regardless of tax shenanigans.

Of course active traders will not be happy but most of them are freeloading tax evaders anyway so screw them.*

Now consider most stocks are far smaller than them.

Again, Canada is a small market, the raise in the inclusion rate would only effect Canadians with non-registered accounts and only when they sell.

But I do congratulate you on having the mentality of the Canadian Left. All the money people earn belongs to the government to be redistributed. Any they are permitted to keep to use as they see fit is the government being generous to them at the expense of others who don't earn (or pay) as much.

It is a matter of taxing income in a similar fashion.

Dividends are taxed at lower rates (personally) than wages/interest because of tax integration: since the CDN corp pays income taxes on the income then used to pay the taxable dividend to the individual shareholder the shareholder pays a lower rate.

Since the corp deducts interest and wages against income and saves corp taxes the individual pays a full rate of tax on wages and the bondholder on interest earned through a non-registered account.

But capital gains?  For some reason this deserves a tax subsidy because people are taking a risk and there may be an inflation component to capital gains.

Nevermind the fact that the investor should be taking those into consideration prior to investing, but, oh no, the taxpayers must incentivize the stock investor by giving them a tax break of 50%.

Utter BS.

And in this case, if the government only taxes them once on earnings and then half again on the investments they make off what remains, that is the government being outrageously generous. Why, there are so many freeloading leaches who need that money! Tax it! Tax it!

You do realize that it is only gains that get taxed right?

I sell my time as labour and I pay tax.

I buy a bond and get my coupon then I pay tax on the income earned and on any gain if, say, interest rates fall so I sell my bond for more than I paid for it.

I buy a stock low, earn a dividend, and then sell it high: only taxed on the dividend income and the increase in value of the stock and not taxed on the original principal.

None of this "taxed again" BS.

If you don't understand how principal works as the cost base for an investment then there is little point continuing this discussion.

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* Lets talk of freeloaders: if one actively trades an account, and especially if one is a Bay Street broker, then your non-registered (and even registered accounts) are considered business income.

This means the AT (active trader) is supposed to pay tax on 100% of the gains.

In the past few AT's did this and got away with it. 

Now? Not so much as the government gets reports to help it weed put these tax evaders and make them pay tax.

From this point of view, raising the inclusion rate to 75% is helpful as it brings these leaches closer to the taxes that they should be payng even if they manage to slip through the review/audit net that is being implemented to catch them.

Ordinary Canadians should cheer this as it will help keep their taxes lower.

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And, with this, I will pickup my award for single longets post on this forum to date (at least until Rue finds this forum).