Canadian Western Bank T.CWB

Buy more?

[FatherJack]

I went to bed last night dreaming of what I could buy with the proceeds if I sold my shares in a registered account.  Now I'm thinking of buying more since it's trading considerably lower than the implied value of the National Bank offer.  I'll probably be taking the shares in my cash accounts to my grave since nothing grieves me more than paying tax to the feds.

[packerdriver]

Question? Do you think there should be ANY tax on capital gains??? If so what % tax on a capital gain would be acceptable/fair in your opinion? Just curious.

[Mountainpose1]

The main problem in my opinion is that the capital gain is a "Ballon Payment" meaining all the tax hits in the year of the sale. The gains may have taken 15 years to accrue. I believe you should be allowed to spread the gains over a number of years but not less than 5 years if the holding was 5 years or more. Why the tax all in the same year? The increased tax rate will also force

[packerdriver]

So the problem is paying the tax in one lump sum??? There is a fix but I don't think ANYBODY would like it: a wealth tax every year on valuation...think of the nightmare accounting involved in that!!!! Your suggestion of spreading the gain over five years would be quite onerous as well. Would you even HAVE the money to pay the tax due in a couple of years if you had a big "life event"

[wkrpradio]

Many countries do not tax capital gains i.e the Bahamas, Barbados, Puerto Rico etc. Canada only introduced the tax in 1972.  I would say 50% , adjusted for inflation , would be acceptable. 

[packerdriver]

REALLY??? FIFTY?? Yikes, as it is now for a guy who makes 117k a year working....and he happens to report a 340k capital gains one year...even with the new 66% inclusion rate of amoounts over 250K this what he'll have to pay in federal tax: He'll pay 19,833 on his work income (17.7%) as usual....and then he'll pay another 53,607 because of the capital gain.....that 53,607 in extra tax

[packerdriver]

And I should have added....those are federal taxes only....provincial taxes are all different with different tax brackets....I used 117k of income because it's the top of the second federal bracket making easy to isolate the capital gain tax.... Yes, capital gains taxes were introduced in 1972...to replace/abolish inheritance taxes. (pick your poison I guess)....just like the GST was