According to the Mother Ship (the CBC) Stephen Harper today promised to cut taxes on capital gains for individuals and companies that reinvest the money within six months.
If this is what I think it is, it's brilliant economics that will increase the net worth of Canada.
Here's why. Right now, people who hold long-term (appreciated) equities outside of an RRSP are dissuaded from selling them when market conditions warrant, because of the significant capital-gains hit, which would leave them with much less to re-invest. So they just hang on to them.
Any investment decision made because of "tax considerations" is a distorted decision. Far better to let the investor sell the asset, and use the money to buy another one.
The net result should be increased wealth for Canadians, and a market that more accurately reflects underlying economic realities.
I had thought of this very idea not a month ago, but never dreamed it would be considered.
Conservative Canada: where dreams come true.
I just hope I got it right.
3 comments:
In 12 years the only thing the LIberals could think of in terms of investment taxation was to make a grab for the Income trust disbursments.
The only thing they did that was actually good for the economy was a knee jerk policy announcement that they would not do this but rather level the playing field with Dividend paying equities by Lowering the tax on the capital gains.
Any and mean any person who knows how investment tax penalties hurt the economy can tell you how much is to be gained by measures like this.
But only a Conservative political leader would actually do it!
Thank you Stephen Harper.....
I'm glad you wrote on this. I just heard about it on CBC and I couldn't tell whether it was a good or bad thing.
"The only thing they did that was actually good for the economy"... The best thing the Liberals did, economically, was to leave the GST and NAFTA in place -- the modern foundations of Canada's economic prosperity, and both Conservative initiatives.
Please scroll down to my "Bread or Toast" post, if you've got a minute, for more commentary.
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