There is no question: lots of people who don't want to pay taxes on capital gains are folks who have been profiting from driving up the price of real estate and rent.
The capital gains inclusion rate id not a loophole. It’s the recognition that capital gains are “lumpy”, I.e. they occur in large chunks all at once, thus exposing someone to taxation at very high marginal rates, regardless of what their usual income is. Also, much of capital gains “income” isn’t even income because the adjusted cost base is not indexed to inflation. Holding an asset for a long time means paying tax on phantom gains. This change would big have been so bad had they not also changed the law to allow the adjusted cost base to be inflated to today’s dollar value to remove the phantom income from taxable income.
Excellent post. I would add though that as I suggested to the finance committee, the rate for commercial housing or real estate should be higher than for the other things which qualify for capital gains. That would induce investors to put their money in more productive activities then speculation on housing. Perhaps there are other ways to ensure capital gains qualifies only for productive investment. Far too much is also invested in things like Bitcoin.
The capital gains inclusion rate id not a loophole. It’s the recognition that capital gains are “lumpy”, I.e. they occur in large chunks all at once, thus exposing someone to taxation at very high marginal rates, regardless of what their usual income is. Also, much of capital gains “income” isn’t even income because the adjusted cost base is not indexed to inflation. Holding an asset for a long time means paying tax on phantom gains. This change would big have been so bad had they not also changed the law to allow the adjusted cost base to be inflated to today’s dollar value to remove the phantom income from taxable income.
Excellent post. I would add though that as I suggested to the finance committee, the rate for commercial housing or real estate should be higher than for the other things which qualify for capital gains. That would induce investors to put their money in more productive activities then speculation on housing. Perhaps there are other ways to ensure capital gains qualifies only for productive investment. Far too much is also invested in things like Bitcoin.