Capital gains tax changes spark concern from some middle-class Canadians

The vast majority of Canadians as individuals, do not pay capital gains. But many who do feel blindsided by higher taxes on future retirement incomes, on small businesses to be sold or passed on eventually, or on other investments. We don’t get tensions, We don’t get retirement funds, we don’t get insurance or sick days. We have to save up for our own retirement and for our own families. David Poon is a family doctor and says his professional corporation will be hit hard, while capital gains of $300,000 for individuals will see the tax rate rise from 50 to 67% on just 50,000 of that amount. Resulting in some $4500 in additional income tax owing. It’s steeper for professional corporations, even medium sized, the capital gains on $300,000, the taxable portion increases to 67%. On the entire amount, resulting in more than $25,000 in additional corporate taxes. This is essentially A retroactive tax on our savings. This is an affront to doctors. It is grossly inappropriate to lump us in with these ultra wealthy. Anytime a government increases taxes, someone somewhere is going to be paying more, Economist Trevor Tomb says. The government is making changes to the tax structure, but it’s also raising revenue and higher taxes will hit some harder than others. Any kind of prior financial arrangements that people undertook to take advantage of the fact that capital gains were preferentially treated? Yeah, no, those arrangements aren’t as attractive anymore. Changes are coming to other assets like a cottage and other second properties. If the value of a cottage has increased tenfold from 100,000 to $1,000,000 over time, when it’s passed on, it could hit the family with another $50,000 or more of capital gains taxes on top of what they plan for the increased tax hit. Will definitely exist and will need to be funded and if if they’re not enough, other assets in the estate. Cottage might very well need to be sold just because of the increased tax. In other words, more Canadians may find it harder to see their grandparents cottage stay in the family. Eric Sorenson, Global News, Toronto.