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Article Archive: Taxes

A historical analysis of tariffs
04/27/25   Taxes
"Our analysis suggests that, over the long-term, tariffs have had relatively minor impacts on GDP, inflation, and equity markets. Perhaps most surprisingly, they've had relatively minor impacts on trade imbalances. Perhaps the best way to think about tariffs, then, is simply as a tax like any other."

Tariffs will not make america great
01/27/25   Taxes
"Unfortunately cutting taxes and replacing them with higher tariffs simply will not work. The only fiscally sustainable way to reduce the tax burden on working Americans is through spending cuts. Hiking tariffs in order to slash other taxes will do nothing to improve the plight of ordinary Americans and will almost certainly exacerbate their problems. Tariffs did not make America great and they will not make America great again."

Trading arguments
12/08/24   Taxes
"Deadweight losses can occur under a variety of circumstances. Among them: when tariffs are imposed."

Norway shrugged
12/01/24   Taxes
"Norway's entrepreneurs are now indeed disappearing from society. In the past two years alone, a staggering 100 of Norway's top 400 taxpayers, representing about 50% of that group's wealth, have fled the country to protect their businesses."

Debt and taxes
09/01/24   Taxes
"the argument to avoid a higher marginal rate today to pay an expected lower effective rate tomorrow is sound if tax rates don't go up much in the future. But that's a huge 'if' that doesn't seem promising given the U.S. government's current fiscal situation."

Whose tax is it anyway?
05/09/24   Taxes
"I think it's easy to judge the rich and their tax avoidance strategies from the outside looking in, but much harder once you are in their shoes."

The myth of the mobile millionaire
04/21/24   Taxes
"The notion that rich taxpayers will flee if the state comes for their money is mostly fiction."

Gains from corporate tax cuts
06/04/23   Taxes
"Goods producers increase their capital expenditure and employment in response to a cut in marginal corporate income tax rates or an increase in investment tax credits. In contrast, companies in the service sector mostly use any tax windfall to increase dividend payouts. We base our conclusions on a novel measure of U.S. firm-specific tax shocks that combines changes in statutory tax rates faced by each firm with narrative identified legislated U.S. federal tax changes between 1950 and 2006."

Spiderwebs
07/07/22   Taxes
"After receiving an erroneous tax notice, Remy is convinced that the IRS is ghosting him." [video]

Superpower of mini-retirement
02/13/22   Taxes
"These steps allow the mini-retiree with low or no income to make massive changes to the amount of future taxes owed, all because they have planned ahead a little bit. This is not 'cheating' the (U.S.) tax code - it is making smart decisions and paying only the taxes due and not a dollar more."

Billionaire tax
10/26/21   Taxes
"I am constantly amazed by the capacity of legislatures to write bad tax law, but this one takes the cake as perhaps the worst thought-through and most ineffective attempt ever, at rewriting tax code."

ETF taxation in the crosshairs
09/19/21   Taxes
"The real damage will be done to anyone who's had the temerity to do a little investing outside their 401(k). ETFs have been an incredible boon for smaller investors, giving them access to the same funds, the same fees, and the same tax advantages wealthy investors have so many other ways to access."

A wealth tax will disappoint
08/21/21   Taxes
"Such a tax would be an exercise in futility. And this isn't simply conjecture - wealth taxes have been tried. In 1990, 12 European countries had a wealth tax. By 2018, that number dropped to four"

Capital gains planning to save tax
01/10/21   Taxes
"There's a difference between good tax planning, and tax evasion. Claiming your parrot as a dependant won't work, unfortunately. The good news? There are some legitimate planning ideas you might want to consider in the short term. Today, I want to talk about capital gains."

CPP premiums go up
01/03/21   Taxes
"For next year, the earnings ceiling, known as the yearly maximum pensionable earnings or YMPE, was supposed to be $60,200, an increase of $1,500 from the 2020 limit. But the actual amount is going to be higher at $61,600."

Simple fix for those facing CERB repayments
12/19/20   Taxes
"Self-employed CERB recipients who have filed their 2019 taxes should be able to easily amend their return by filing a T1-ADJ form on which they can reduce the expenses they claimed so that their net income rises above the $5,000 eligibility threshold, Rotfleisch says."

Relief for RDSP holders
12/05/20   Taxes
"The federal government has affirmed its timeline for removing the limitation on the period that a Registered Disability Savings Plan (RDSP) may remain open after a beneficiary becomes ineligible for the disability tax credit (DTC)."

A work-from-home tax
11/14/20   Taxes
"One economist thinks there are negative externalities and even net costs to the individual in working from home; the other thinks it is an inarguable optimum"

Moving in a canoe
11/16/19   Taxes
"A teacher who relocated for work by loading his belongings into a canoe and paddling up the Rideau Canal to Ottawa has convinced Canada's tax agency to allow him to claim his moving expenses."

Tax-loss harvesting alpha
04/13/19   Taxes
"We find that a tax-loss harvesting strategy yields a geometric average of 51 basis points per year from 1926 to 2018. However, this tax alpha is highly variable: over four successive 23-year periods, the tax alpha ranged from 26 to 88 basis points per annum"

A leader in tax compliance
03/11/19   Taxes
"Then there's Greece, where economists have struggled to even calculate a VCR. According to the International Monetary Fund, more than half of Greek households pay zero income tax. Indeed, tax evasion is practically a national sport. Take the swimming-pool trick. After the 2008 recession, the government placed a luxury tax on private pools. When only 324 residents in the ritzy suburbs of Athens admitted to having one, tax collectors knew they were being swindled - but didn't know how badly until Google Earth photos revealed the real pool count: 16,974. It's now common to conceal chlorinated assets with floating tiles, army nets, and pool interiors painted to mimic grass."

Tax reform
01/28/19   Taxes
"We have to do better, not just for the sake of convenience, but for reasons of fairness. As things now stand, the staggering amount of red tape discourages people from applying for credits they deserve. In 2018, a Senate committee discovered that fewer than 40% of the adults who were entitled to the disability tax credit in 2012 succeeded in claiming it, in large part because of the daunting amount of paperwork required. The question is how to reform a system that has sprawled in every direction"

Bad economics
01/08/19   Taxes
"A top marginal income tax rate of 70 percent is bad economics and even worse politics."

After-tax alpha
01/01/19   Taxes
"The costs of our active strategies are high enough without paying Uncle Sam. Capital gains taxes, when combined with transactions costs and fees, make indexing profoundly advantaged, I am sorry to say."

A warning to home buyers
09/10/18   Taxes
"So, the onus is now on the buyer of real estate to not only collect taxes on behalf of the CRA when a non-resident is selling a property, but to also make a judgment on when to investigate further the tax residency of the seller - as though a layperson is qualified to know when and how to make that inquiry."

Appalling problem for small businesses
01/22/18   Taxes
"The income the 'passive-income' proposal would hit may be far from passive and the rate on taxable capital gains will often exceed 100 per cent"

Passive income changes create big concerns
12/11/17   Taxes
"The proposed measures around passive income will apply only to Canadian-controlled private corporations. What about public companies? Or foreign-controlled private companies? It hardly seems fair to put Canada's private business owners at a disadvantage here. If revisions are made to affect public and foreign private corporations, how will the changes impact foreign investment in Canada? The issue gets a lot more complicated - and political - than even the Liberals were expecting."

CRA gives taxpayers wrong info
11/27/17   Taxes
"The Canada Revenue Agency's call centres blocked more than half the calls they received and gave taxpayers the wrong answers to their questions nearly one third of the time, the federal Auditor-General says."

Tax-avoiding whales swim free
10/07/17   Taxes
"We know for certain, however, that when it comes to tax neutrality, owners of private corporations are mere tiny fish swimming among the tax-avoiding whales. Millions of Canadians use equivalent passive-investment vehicles to duck billions in taxes on personal and investment income every year. They're called pension plans."

Tax bill higher than 90 per cent
09/23/17   Taxes
"On $8-million of total income, this is a tax rate of just more than 93 per cent. You might believe that these proposed tax changes are fair because business owners should pay their fair share. But how high a tax rate is fair?" [$]

A 93% tax rate
08/07/17   Taxes
"Small business owners across the land are still reeling from last month's announcement by Finance Minister Bill Morneau targeting private corporations and fundamentally changing the way businesses and incorporated professionals are taxed."

Capital gains tax is already unjust
03/19/17   Taxes
"the current Liberal government's rumoured plan to increase the capital gains tax can be expected to hammer another nail in the coffin for Canadian investments, particularly at a time when our economic outlook is already relatively weak."

Tax court justice seen at KPMG-linked party
03/12/17   Taxes
"The Canadian Judicial Council began the review following the documentaries that showed two judges attending evening social events during a KPMG-sponsored tax conference in Madrid last fall. A third judge, the chief justice of the Tax Court of Canada, was revealed making a speech in which he promoted drinking alcohol with the tax industry."

A taxing trend
02/12/17   Taxes
"The odds of a federal budget that targets investors with higher taxes on capital gains or even dividends are rising."

Trump's tax break
10/09/16   Taxes
"The prevailing wisdom that has emerged in the past week among accounting experts is that Trump was able to use more than $900 million in paper losses to reduce his taxable income via a loophole in the code that allowed losses of private businesses registered as S-Corporations to flow to their owners, even when they didn't put an of their own cash into the companies, which is where the name double dip comes from."

Apple took tax game too far
09/04/16   Taxes
"When the corporate structures you devise cross the line from frugality into utter absurdity - and a 'head office' with no employees or premises is pretty absurd - you are asking for trouble."

RBC fund became a tax headache
03/19/16   Taxes
"RBC had triggered the capital gain - and a related one in 2014 - when it sold the fund's individual stocks and bonds and replaced them with RBC's own mutual funds."

Consider the last great tax shelter
01/09/16   Taxes
"Self-employment is the last of the great tax shelters."

The impact of taxes
12/26/15   Taxes
"Consider the financial options of a high net worth individual living in California. She can choose to hold her wealth in shares of Berkshire and pay no tax at all on the returns unless or until she needs to consume out of them, at which point she will be able to monetize them at a preferential long-term rate, or she can own fixed income securities - say, a 30 year treasury bond - and pay a whopping 56.7% tax rate on the earnings. In the case of the 30 year bond, at a 2.90% yield, her after-tax yield would be a paltry 1.26%. Unless equities were in an outright bubble, with extremely low imputed returns, what reason could she possibly have, as a long-term investor, to choose the fixed income option?"

Clarity on TFSA contribution limits
12/13/15   Taxes
"Earlier this year, the Conservative government increased the annual contribution limit to $10,000. The Liberal government confirmed on Monday, however, that it will be rolled back to $5,500 in 2016. Going forward, the limit will be indexed to inflation, as it was prior to this year's increase."

TFSA criticisms miss key points
03/14/15   Taxes
"The TFSA isn't just a popular savings instrument among Canadians, especially for many middle-income Canadians facing retirement. It is also an economic tool, generating economic growth, jobs - and ultimately government revenues. Anyone examining the 'costs' of TFSAs must also look at the benefits."

Claiming a loss
01/18/15   Taxes
"It makes sense, then, to segregate any day trading activity (sometimes considered on income account) into a separate account from your buy-and-hold securities."

Give to charity and get back
12/20/14   Taxes
"The First-Time Donor's Super Credit (FDSC) makes it possible to donate a lot of money to charity - with a much lower overall cost."

Buffett's tax plan
04/12/14   Taxes
"Allowing companies to split into separate parts, tax-free, is a long-accepted practice. But now it seems that practice has been twisted into a very effective tax-dodge."

Boost after-tax returns
04/05/14   Taxes
"If you happen to be an investor, you're no doubt looking for ways to increase your returns. Look no further than your own tax return. If you can achieve tax savings related to your investments, this will increase your after-tax returns. So, consider the following ideas when filing your tax return this year."

Moguls shelter wealth forever
12/29/13   Taxes
"In the past four years, the amount of money administered by South Dakota trust companies like these has tripled to $121 billion, almost all of it from out of state. The families needn't actually move to South Dakota, or deposit their money at a local bank, or even touch down in the private jet. Little more than renting an address in Sioux Falls is required to take advantage of South Dakota's tax-friendly trust laws."

Accidental tax break
12/29/13   Taxes
"Federal law requires billionaires such as Adelson who want to leave fortunes to their children to pay estate or gift taxes of 40 percent on those assets. Adelson has blunted that bite by exploiting a loophole that Congress unintentionally created and that the Internal Revenue Service unsuccessfully challenged."

Where will the boot land next?
11/17/13   Taxes
"But there is another kind of political risk: the temptation for governments of all political colours to change the rules, whether they relate to tax, the way that companies operate or how markets behave. And that risk has increased significantly since the 2008 crisis."

IRS: not good at math
05/11/13   Taxes
"About a half-hour into a conference call with reporters Friday afternoon, senior Internal Revenue Service official Lois Lerner said something she will regret. 'I'm not good at math,' she confessed as she tried to summon a statistic."

G rard Depardieu, the heroic exile
12/22/12   Taxes
"Over 45 years, Depardieu said, he had paid 145 million euros in tax, and to this day employs 80 people. Last year he paid taxes amounting to 85 per cent of his income. 'I am neither worthy of pity nor admirable, but I shall not be called 'pathetic',' he concluded, saying that he was sending back his French passport."

Income malaise complicates tax talks
12/13/12   Taxes
"If the two parties fail to come to a deal by Jan. 1, taxes on the average middle-income family would rise about $2,000 over the next year. That would follow a 12-year period in which median inflation-adjusted income dropped 8.9 percent, from $54,932 in 1999 to $50,054 in 2011."

How Apple avoids paying billions in taxes
11/10/12   Taxes
"Thanks to a complex network of offshore accounts and cleverly named subsidiaries, Apple, the world's most valuable company, paid just $713 million on its $36.8 billion in foreign earnings last quarter. That amounts to a rate of just 1.9 percent, a figure that makes Mitt Romney's 14.1 percent effective tax rate look downright generous. And believe it or not, Apple actually reduced its foreign tax rate by nearly 25 percent as the company's market cap soared to new heights this year. According to the Associated Press, it was 2.5 percent at this time in 2011. Did Apple get a tax cut? Nah, it just got better at avoiding the IRS."

Sponging boomers
10/19/12   Taxes
"The IMF estimates that fixing America's fiscal imbalance would require a 35% cut in all transfer payments and a 35% rise in all taxes - too big a pill for a creaky political system to swallow."

The long arm of Uncle Sam
10/06/12   Taxes
"New U.S. laws targeting overseas tax cheats have not only left a million Canadians facing the potential of financial ruin, but have put local credit unions in an impossible bind."

Tax amnesty offered to Americans in Canada
06/27/12   Taxes
"The United States has announced details of a long-promised amnesty program for the millions of Americans living in Canada and offshore - many who haven't filed taxes for years."

McGuinty's high-income tax
04/24/12   Taxes
"The new, higher marginal tax rate proposed comes dangerously close to the psychological threshold of 50 per cent where individuals become extremely frustrated with the prospect of paying more to the government than they keep for themselves. Mr. McGuinty is only fooling himself if he thinks that wealthy Ontarians will do nothing about it."

Art donation scheme raises questions
12/17/11   Taxes
"The biggest and longest-running financial fiascos in Canada have been 'donate low, deduct high' charitable donation tax-credit schemes. These schemes are all variations on the same theme: The donor purchases something for 'x' dollars and then donates it for 'x plus y' dollars, generating a tax credit that exceeds the original out-of-pocket costs. One of the most outrageous was the art-donation scheme. The participant would, for example, buy a piece of art for $10,000, get it appraised for $30,000, and then donate it to a university or hospital. The donor would receive a tax credit equal to 43.7 per cent of the appraised value, or $13,110, which was $3,110 more than his original cost. Problem is, Canada Revenue Agency has consistently rejected such schemes. To date, it has disallowed a stunning $4.5 billion in donations claimed by more than 130,000 Canadian taxpayers on account of these dodgy deals."

U.S. taxman to go easy
12/03/11   Taxes
"Americans living in Canada who've neglected to pay their U.S. taxes are getting a big break from Uncle Sam. The U.S. Internal Revenue Service is poised to waive potentially massive penalties for Americans who agree to come clean and don't owe any taxes, The Globe and Mail has learned."

Why taxing the rich won't help
11/23/11   Taxes
"It's tempting to look to our millionaires and demand they pay more in taxes, but the same inconvenient truth applies. When you add up all the money made by all the people who earn more than $1 million a year, it amounts to around $700 billion. But since the millionaires already pay close to $200 billion in taxes, the government would have to increase rates to nearly 100 percent - which is about the worst idea ever - for it to have any real impact."

More corporate tax won't help
11/23/11   Taxes
"A tax rate is one thing. Tax collected is another. Indeed, in Canada progressives like to point out that there's no need for corporate income tax cuts, since the rates in the U.S. are much higher. But no one pays the posted rate in the U.S."

Tax math
10/19/11   Taxes
"Let's consider two key areas of the tax code, where "first-stage thinking" allows Buffett to conclude that he's paying a lower tax rate than his secretary. Once we view the picture from the proper perspective and engage in "second-stage thinking," you'll see that Buffett's effective tax rate is much higher than it seems."

A Short History of the Income Tax
10/08/11   Taxes
"The other pernicious consequence of the separate corporate and personal income taxes has been a field day for demagogues and the misguided to claim that the rich are not paying their 'fair share.' Warren Buffett recently claimed that he had paid only $6.9 million in taxes last year. But Berkshire Hathaway, of which Mr. Buffett owns 30%, paid $5.6 billion in corporate income taxes. Were Berkshire Hathaway a Subchapter S corporation and exempt from corporate income taxes, Mr. Buffett's personal tax bill would have been 231 times higher, at $1.6 billion. Just as in the late 19th century, the tax code is now hopelessly arbitrary and unfair. It requires a complete overhaul."

Buffett on taxes
09/30/11   Taxes
"Warren Buffett, the billionaire who runs Berkshire Hathaway Inc., talks about the need for the ultra-rich, who 'make money with money' to pay more in taxes."

There's no free lunch
09/14/11   Taxes
"It's widely known in tax circles that only 50% of the cost of meals and entertainment, when incurred as a legitimate business expense, is tax-deductible. What's not as well-known, however, is the rationale for this rule. A recent Tax Court decision deals with this rule and delves into the fascinating yet underappreciated world of statutory interpretation."

A response to Buffett and Obama
08/23/11   Taxes
"Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country? Do we really need all the regulations that put an estimated $2 trillion burden on our economy by raising the price of things we buy? Do we really need subsidies for domestic sugar farmers and ethanol producers? Why do we require that public projects pay above-market labor costs? Why do we spend billions on trains that no one will ride? Why do we keep post offices open in places no one lives? Why do we subsidize small airports in communities close to larger ones? Why do we pay government workers above-market rates and outlandish benefits? Do we really need an energy department or an education department at all? Here's my message: Before you 'ask' for more tax money from me and others, raise the $2.2 trillion you already collect each year more fairly and spend it more wisely. Then you'll need less of my money."

Buffett misses mark
08/18/11   Taxes
"The United States needs to get out of its box of low growth. Current proposals for tax increases are the wrong medicine. Instead, a rate-reducing cum base-broadening tax reform would be more powerful by reducing the economic cost of taxation. Buffett pays too little tax, not because he's so rich but because the U.S. tax system is so poor."

U.S. taxman reaches north
06/14/11   Taxes
"Janet Selby never imagined she was anything other than a Canadian. After all, she has lived in Canada for all of her 47 years. She went to school here, voted in elections, travelled on a Canadian passport and built a successful career as an accountant and corporate recruiter. But a recent call from her online broker forced her to confront a long-forgotten past. Ms. Selby spent the first four days of her life in the United States, born in 1963 to two Canadians pursuing graduate work at the University of Illinois in Champaign, Ill. That makes Ms. Selby an accidental American - a reality that comes with sweeping tax and reporting obligations that could now cost her thousands of dollars and a monster headache."

Lessons from Ronaldinho and Beckham
06/04/11   Taxes
"How high can you tax the rich before they decide to pack up and move somewhere cheaper? For states teetering on the edge of bankruptcy, this is no theoretical question. Set taxes too low, and you miss out on valuable revenue - set them too high, and your powerhouse workers might move away.Now, by looking at the mobility of soccer stars in Europe, three economists say they are closer to understanding an ideal tax rate for the super-wealthy."

Scraping by on $250k a year?
05/23/11   Taxes
"As educated professionals, they buy books, newspapers and magazines they own computers and pay for Internet access. But the Joneses don't take lavish vacations, don't belong to a country club, don't play golf, don't drive luxury cars, don't have a swimming pool, don't buy designer clothes, don't own or rent a second home, and don't send their kids to private school. They don't even shop for groceries at high-end markets. (They spend what the United States Department of Agriculture defines as a "moderate" amount on food for the average family of four.) In short, they're not "wealthy," even if they're in the top 5 percent of earners. ..."

Top Marginal Tax Rates 1916-2010
04/15/11   Taxes
"Over the years, changing the amount of taxes people pay was accomplished not just by changing rates but by changing the income limits of the tax brackets. Just looking at the top rates does not give the whole picture about who is paying taxes. Before the 1986 tax reform, the income tax had 15 brackets. In the 1930s, there were more than 50. The Wealth Tax Act of 1935, applied the top rate to income over $5 million and had only a single taxpayer: John D. Rockefeller, Jr. As the number of tax brackets decrease, the the top rate was applied to more people over the decades. Since 1987 the income tax brackets were combined so now more than a million people "qualify" for the top marginal rate."

Death by a thousand credits
04/09/11   Taxes
"...a tax-credit announcement allows a party to look pro-family, or pro-green, or whatever the cause du jour may be. They're mainly symbolic gestures parties use to make sure they have something for every interest group - symbolic gestures that add up to a big price we all pay."

A Tax Code for the Digital Age
04/08/11   Taxes
"Anyone who wants a Nintendo Wii console or the latest John Grisham novel can pick it up at the nearest Target (TGT) store or log on to Amazon.com (AMZN) and have it delivered. The similarities between the two retailers aren't as apparent when it comes to taxes. Amazon's effective rate - the total it pays in federal, state, local, and international income taxes after deductions, along with its sales and property levies - has been more than 10 percentage points lower than Target's for the past four years. Target's effective tax rate in 2010 was 35.1 percent, compared with Amazon's 23.5 percent. Amazon in 2010 owed $352 million in income taxes worldwide on income of $1.5 billion, according to its SEC filings, while Target owed $1.58 billion on income of $4.5 billion."

The Price of Taxing the Rich
04/02/11   Taxes
"Nearly half of California's income taxes before the recession came from the top 1% of earners: households that took in more than $490,000 a year. High earners, it turns out, have especially volatile incomes - their earnings fell by more than twice as much as the rest of the population's during the recession. When they crashed, they took California's finances down with them."

Why Investors Can't Get More Cash
02/20/11   Taxes
"Earlier this month, Microsoft borrowed $2.25 billion in unsecured debt. What in the world possesses a company with $40 billion in cash and short-term securities to go out and borrow money? Rock-bottom interest rates are one reason. But the bizarre, byzantine U.S. tax code seems to be another."

A Brief Visual History of U.S. Taxes
01/14/11   Taxes
"Tax reform might be The Issue of 2011. Or, like most years, it might linger on the sidelines of the national debate, but never press its way into the limelight. Either way, the Senate Finance Committee is hearing the case for tax reform today -- and who better to hear from first than the head of the Joint Committee on Taxation, Congress' official oracle and arbiter of tax policy. You can download the full testimony here, but I wanted to pass along four easy charts from the presentation that explain some major developments in the tax code over the last 40 years. I don't want to say too much, as these charts speak for themselves."

The Tax Haven
10/21/10   Taxes
"Google uses a complicated structure to send most of its overseas profits to tax havens, keeping its corporate rate at a super-low 2.4 percent "

Soak the very, very rich
08/12/10   Taxes
"In a society that's becoming more stratified, a sensible tax system should draw more distinctions, not fewer. The U.S. is now a place where the rich and the ultra-rich really inhabit different worlds. (A couple of years ago, Barron's declared, 'Yes, it takes more than $10 million to be seen as rich these days.') They should probably inhabit different tax brackets, too."

Fun tax facts
04/15/10   Taxes
"Centuries ago, when the Papal State dominated Tuscany, these rulers imposed an extremely high tax on salt. As a form of protest, Tuscan bakers began to make their bread without salt. Gradually, the taste for bread made entirely without salt became widespread, and to this day, Tuscan bread is salt less"

Special interest
03/15/10   Taxes
"It's the time of year when a young man's fancy lightly turns to thoughts of deductions and write-offs. One select group of Americans, though, has a more pressing tax-season task on its mind: preserving a lucrative loophole in the I.R.S. code. The provision allows money managers at privately held partnerships - like hedge and private-equity funds - to treat most of the money they make as capital gains rather than as ordinary income. That means that their income is often taxed at fifteen per cent, a much lower rate than it otherwise would be."

Tax system full of it
02/22/10   Taxes
"Canada's tax system has become so complex and confusing, and revenue staff so unsympathetic, that a judge has awarded legal costs to an Ontario couple despite ruling against their case with the Canada Revenue Agency."

Six RRSP pitfalls
02/05/10   Taxes
"It's RRSP season, and you're going to get a lot of advice about how to maximize your contributions, borrowing to contribute, the benefits of contributing, and how to invest inside your registered retirement savings plan. It's all good stuff when the advice comes from the right sources. But I want to talk about the six most common mistakes that people make with their RRSPs. If you avoid these blunders, you'll save tax, create greater retirement savings for yourself, and protect those assets."

Comparing taxes on RRSPs and TFSAs
02/02/10   Taxes
"Comparing marginal effective tax rates across income levels suggests that many Canadians with savings in tax-deferred vehicles, like Registered Retirement Savings Plans, should put more future saving in tax-prepaid savings plans, particularly Tax-Free Savings Accounts."

$10 an hour with 2 kids? IRS pounces
01/30/10   Taxes
"Rachel Porcaro knows she's hardly rich. When you're a single mom making 10 bucks an hour, you don't need government experts to tell you how broke you are. But that's what happened. The government not only told Porcaro she was poor. They said she was too poor to make it in Seattle."

An immodest proposal
01/12/10   Taxes
"In other words, the estate tax is really a capital gains tax, but triggered by death, not sale of the capital asset. So why not eliminate the estate tax, but then have the heirs inherit not only the stock in Amalgamated Widget but granddad's cost basis as well? Then, when Junior sells a million shares in order to pursue his dream of winning back the America's Cup or whatever, he has to pay a substantial capital gains tax on those shares. A possible compromise would be to set the capital gains on inherited assets at a higher rate than on assets bought by the person himself. This would allow the Democrats to feel all warm and fuzzy for having still socked it to the rich and allow the Republicans to claim credit for having eliminated an unfair, arbitrary, expensive, and economically pernicious tax."

Internet sales tax scofflaws
12/29/09   Taxes
"Today the major resistor against online collection of sales tax is, unsurprisingly, Amazon.com, the world's largest online retailer. Amazon, which has no retail stores anywhere, has become a target of state tax collectors because as its business has expanded, so has the value of its inventory."

Congress throws estate plans into disarray
12/26/09   Taxes
"Barring a last-minute political deal, the federal estate tax is set to disappear as of Jan. 1, 2010--for just one year. Democratic leaders of Congress are vowing to resurrect the tax retroactively sometime next year, but the impending lapse has estate planners in a tizzy. They worry the lapse could turn into a nightmare for some families."

2009 year-end financial deadlines
12/10/09   Taxes
"With the end of this year just around the corner, here are some personal finance deadlines to note"

Marriage is a costly luxury
09/25/09   Taxes
"The working poor, by contrast, are in a highly undesirable position when it comes to marital status and taxes. It literally doesn't pay for working poor parents to marry. Instead, it costs them precious money in the form of lost tax credits. We researched the tax consequences in 2008 for two working poor individuals and their dependents and made some significant (some would say startling) discoveries."

Farewell America
09/21/09   Taxes
"Our bank is in the process of recommending our clients to exit from all direct investments in US securities. This, on the grounds of the threat of inheritance tax coupled with the uncertainty as to whether one might not, one way or another, be turned into a US person."

When work doesn't pay
09/18/09   Taxes
"Middle-class folks are finding that a raise or second paycheck doesn't always mean living better. Time to work less?"

A surtax on the top 1%
07/31/09   Taxes
"It seems almost certain at this point that whatever health reform legislation is ultimately enacted by Congress, its principal funding will come from a surtax on the top 1% or so of taxpayers. This is a very bad idea for reasons that have little to do with the economic effects of taxation."

The small business surtax
07/15/09   Taxes
"Jason Furman owes an apology to Michael Boskin, the Stanford economist who wrote a year ago on these pages that Barack Obama would raise American income tax rates nearly to 60%. Mr. Furman, then in the Obama campaign and now at the White House, claimed this was wrong and that Democrats would merely raise taxes back to their Clinton-era level. House Democrats are now proving that Mr. Boskin had it right, and before it's over even he may have underestimated how high taxes will go."

Tax fantasies of the right and left
04/17/09   Taxes
"At the same time, it's not a good idea to try to raise all that extra money just from households with annual incomes of more than $250,000. That may have been a winning campaign promise for candidate Obama, but it makes for lousy economic policy. A quick back-of-the-envelope calculation suggests that balancing the budget solely on the backs of those making more than $250,000 a year would almost surely require pushing marginal income tax rates well above 50 percent. That's a level at which taxes begin to discourage people from working and investing. Almost certainly, it is a level that would prompt them to invest significant time and money to find new ways to evade taxes."

Unintended consequences
04/13/09   Taxes
"The recent Ontario budget contains a massive tax grab that our Investment Partners should be aware of. The McGuinty government is proposing the harmonization of Ontario.s provincial sales tax with the federal GST. The decision to jam an additional 8% tax on the management expense ratios (MER) of your investment products is shockingly unwise and dangerous."

Make interest tax deductible
01/25/09   Taxes
"Take a look at your balance sheet. Do you have any debt? If so, are you entitled to deduct the interest? Chances are, you've got some debt that is costing you interest that is simply not deductible for tax purposes."

Court ruling offers a lesson on avoiding tax
01/16/09   Taxes
"The court did confirm that GAAR should not generally apply when taxpayers rearrange their borrowings to minimize their taxes. In the Lipson case, the court was fine with the interest deduction itself, but took offence to Mr. Lipson claiming the deduction by relying on the attribution rules to give him the deduction (he was the higher-income spouse, and therefore benefited more from the interest deduction). And so, we should spend some time looking at ways to arrange debt to make the interest deductible."

Self-employed? Make sure business is for real
12/13/08   Taxes
"Take a business-like approach to pursuing revenues in your business. Have a marketing plan, and be prepared to explain how you plan to increase revenues over time. Next, make sure you understand, and can explain, what it will take to be profitable (how many widgets you need to sell, how many performances you need to make, etc.). Finally, try to avoid reporting losses for more than a couple of years. This could raise a flag on your tax return."

Take advantage of the dividend tax credit
09/21/08   Taxes
"It's interesting, but the marginal tax rate on eligible dividends is now lower than the rate on capital gains in most provinces at most income levels. In fact, at lower income levels, the marginal tax rate on eligible dividends is often negative. That is, adding more eligible dividend income to your tax return can actually reduce your overall tax bill. Why? Because the dividend tax credit available will offset not only that dividend income, but the tax on other income as well. British Columbia has the deepest negative marginal tax rate in 2008 at negative 15.55 per cent for the lowest income earners. This means, for example, that if you live in B.C., are in the lowest tax bracket, and you add one dollar of eligible dividend income, you'll actually pay 15.55 cents less in tax than without the dividend. What a bargain."

Student tax planning can save a bundle
09/07/08   Taxes
"So, if you've got a child heading off to postsecondary school this year, congratulations, I expect your child will make smarter decisions. And there are some smart decisions related to your child's tax planning that can help too. Let me share some of those today."

Transfers can come with tax surprises
08/09/08   Taxes
Selling your cottage needn't be so taxing
07/25/08   Taxes
Canadian Tax Freedom Day: June 14
06/13/08   Taxes
The drawbacks of your assets being jointly owned
05/17/08   Taxes
Pay the taxman by midnight or else!
04/30/08   Taxes
Same price, but fewer tax returns
03/09/08   Taxes
Curve balls raise red flags for CRA
03/09/08   Taxes
TFSAs could spawn untaxed pensioners
03/05/08   Taxes
Dividend tax slides below budget radar
02/28/08   Taxes
Deductions failed the smell test
11/11/07   Taxes
A strategy to keep your prized stocks
11/04/07   Taxes
The many benefits of monetizing
11/04/07   Taxes
Tax reductions for Canadians
10/30/07   Taxes
Fifteen ways to reduce your 2007 taxes
10/22/07   Taxes
The skinny on pension splitting
10/14/07   Taxes
$1.4B tax scams nail donors
09/29/07   Taxes
When to pull trigger on a loss
09/23/07   Taxes
The naked truth about tax shelters
09/09/07   Taxes
The perils of joint ownership
08/05/07   Taxes
Company cars: Perk or penalty?
07/30/07   Taxes
Income transfers can backfire
07/07/07   Taxes
It's intent that counts in loss claims
07/01/07   Taxes
Filing 101: Canada Revenue waits for no one
04/29/07   Taxes
Last-minute tips that can save big bucks
04/21/07   Taxes
Ensure your property is deemed a principal residence
01/20/07   Taxes
Beware the minefields of a property 'change in use'
01/20/07   Taxes
Keep the taxman at bay
01/20/07   Taxes
Tax changes that may be in store for us
12/17/06   Taxes
Gift to income-splitting pensioners
11/04/06   Taxes
Hit with a loss? Your spouse can ease the pain
10/30/06   Taxes
Charity + tax-free dividends = win-win
10/03/06   Taxes
Location is key to tax breaks on risky assets
09/25/06   Taxes
Self-employment can pay for your child's education
09/10/06   Taxes
An annuity can brighten your golden years
08/19/06   Taxes
Uncle Sam wants you ... to file
08/14/06   Taxes
Split share ownership can be a capital idea
08/05/06   Taxes
Stay off the taxman's hit list
08/05/06   Taxes
Your small business has woes? Here's how to protect yourself
08/05/06   Taxes
Life insurance can be a saviour if you own a holding company
08/05/06   Taxes
Flow-through shares produce charitable bonanza
07/11/06   Taxes
Naming the kids' guardians is no child's play
07/02/06   Taxes
When writing your will, make sure your intentions are clear
06/25/06   Taxes
Estate planning for the wise
06/18/06   Taxes
Understand the rights of your spouse upon your death
06/10/06   Taxes
Landscaping may be beheld in the deductibles
05/30/06   Taxes
Donating securities isn't easy
05/21/06   Taxes
Zero taxes and help a favourite charity
05/14/06   Taxes
The budget's tax-saving measures
05/07/06   Taxes
Before you claim a deduction make sure it's legitimate
04/30/06   Taxes
These tips can help trim your tax bill
04/23/06   Taxes
Got a bone to pick with the taxman?
04/16/06   Taxes
Are you really self-employed?
04/08/06   Taxes
Good news for those with shareholder loans
04/02/06   Taxes
Aggressive tax plans can fall foul of the law
03/25/06   Taxes
You want a piece of me? Pay
03/19/06   Taxes
Let's have some discipline
03/19/06   Taxes
Getting your adjusted cost base in order
03/11/06   Taxes
Canadian snowbirds can build a messy tax nest
02/25/06   Taxes
You're not going to live forever
02/19/06   Taxes
How to manage your retirement
02/12/06   Taxes
Put gold in her purse for Valentine's Day
02/05/06   Taxes
Pay attention to your RRSPs
01/28/06   Taxes
The antiquity of tax law
01/22/06   Taxes
New dividend rules could change your strategy
01/19/06   Taxes
If it sounds too good to be true . . .
01/19/06   Taxes
Act like a saint but think like an investor
12/18/05   Taxes
Avoid paying someone else's taxes
12/04/05   Taxes
Income trusts still the better tax deal
11/27/05   Taxes
End the tax year right
11/19/05   Taxes
Test yourself
11/06/05   Taxes
Tax Evasion
10/23/05   Taxes
RRSP overcontributions can boost your nest egg
10/09/05   Taxes
Think before giving a child the title to your home
10/02/05   Taxes
Changing income trust rules could crack nest eggs
09/25/05   Taxes
Family trust can be an educational building block
09/18/05   Taxes
Tax treaty could help prevent a nasty bite
09/04/05   Taxes
Five ways to be prepared for U.S. estate tax laws
08/27/05   Taxes
Three reasons you could end up paying U.S. estate taxes
08/21/05   Taxes
The top 10 items the taxman will query on your return
08/07/05   Taxes
It's crucial that executors understand all their obligations
08/07/05   Taxes
Dying without a will can cost
08/07/05   Taxes
The estate tax - does it really matter?
08/06/05   Taxes
Consider the easy way out
07/17/05   Taxes
Demolishing shaky tax shelters
07/11/05   Taxes
Use put options to defer your tax payments
07/10/05   Taxes
Make sure your sale of home isn't AINT
07/03/05   Taxes
CRA gives your home a break
06/26/05   Taxes
Be careful how you donate through your will
06/19/05   Taxes
Getting stiffed on a loan?
06/12/05   Taxes
Market-timing your RRIF withdrawals
06/06/05   Taxes
Set your financial house(s) in order before getting married
05/29/05   Taxes
Royalty trusts offer tax benefits
05/22/05   Taxes
Beware options in private companies
05/15/05   Taxes
Notional pension plans a tax option
05/08/05   Taxes
Some points to consider after filing your return
05/01/05   Taxes
Self-employment a great shelter
04/24/05   Taxes
Crossed the foreign content line? Here's help
04/16/05   Taxes
Changes that help, changes that hurt
04/16/05   Taxes
Free money on tap for green card holders
04/10/05   Taxes
1040 Plunder
04/05/05   Taxes
Watch out for U.S. tax Form 8891
04/03/05   Taxes
Think twice before deducting
03/27/05   Taxes
Could you be hit by the 'jock tax'?
03/27/05   Taxes
Getting the most out of your tax return
03/20/05   Taxes
What should investors be doing?
03/13/05   Taxes
Dirty dozen tax scams
03/01/05   Taxes
RRSPs show clear advantages
02/13/05   Taxes
Handle your RSPs properly when leaving Canada
02/06/05   Taxes
RRSP mistakes can be costly
01/16/05   Taxes
Strategies for tsunami donations
01/09/05   Taxes
Make a New Year's resolution on taxes
01/02/05   Taxes
Charitable donation deadline looming
12/26/04   Taxes
Scrooge and your CRA taxman have much in common
12/26/04   Taxes
Man, it's cold -- a great time to discuss the cottage
12/19/04   Taxes
Tax schemes can come back to bite you
12/12/04   Taxes
Give with a passion and get the best tax relief
12/05/04   Taxes
Make the most out of capital losses
11/28/04   Taxes
A how-to guide on capital gains
11/22/04   Taxes
Canadian residents face tax on U.S. rental income
10/16/04   Taxes
Grant strategy can provide immediate education cash
10/14/04   Taxes
Tax competitiveness
09/22/04   Taxes
Fund your kid's schooling
09/05/04   Taxes
Negotiating a new job? Think outside the tax box
08/24/04   Taxes
Employee loans creative benefit
08/08/04   Taxes
In search of greener grass in the U.S.
06/27/04   Taxes
CRA interest rate cut means opportunity
06/19/04   Taxes
So your cottage is worth a fortune?
06/18/04   Taxes
Joint ownership can lead to problems
06/06/04   Taxes
When death and taxes are charitably intertwined
05/29/04   Taxes
Stock options can generate a nasty surprise
05/15/04   Taxes
You have the right to question taxman's assessment
05/02/04   Taxes
Can't miss tips for late season filers
04/17/04   Taxes
Unemployed in '03? Here are some tax tips
04/10/04   Taxes
Strangest taxes
04/04/04   Taxes
Tax time can put cash in your account
04/03/04   Taxes
Interest deductions lost under proposed law
03/28/04   Taxes
Do you cheat on your taxes?
03/26/04   Taxes
Exit strategies
03/15/04   Taxes
This year's tax software offers unprecedented choice
03/13/04   Taxes
Keep your beneficiaries in mind after a divorce
03/06/04   Taxes
Retirement savings planning should be a year-round sport
02/28/04   Taxes
Is that really your tax refund?
02/24/04   Taxes
Fears of split hold back spousal RRSPs
02/18/04   Taxes
State's new technology finds tax cheats
02/17/04   Taxes
Estate planning pitfalls
02/15/04   Taxes
Old sale set tax precedent for Black
02/07/04   Taxes
Tax bill has increased 1550 percent since 1961
02/04/04   Taxes
A taxing battle
01/30/04   Taxes
The big payday
01/14/04   Taxes
Deferring tax payment puts money in your pocket
01/07/04   Taxes
Tax Act amendments could eliminate interest deduction
12/21/03   Taxes
Snowbirds should understand tax rules
12/21/03   Taxes
Giving is still sound tax policy
12/14/03   Taxes
12 tax tips to munch on
12/07/03   Taxes
Risks in 'buy low, donate high'
12/05/03   Taxes
Tax cuts may prove a mirage for AMT payers
12/03/03   Taxes
IRS revamps RRSP reporting
11/30/03   Taxes
A year-end registered plan checklist
11/30/03   Taxes
CCRA tax shelter donation arrangements
11/25/03   Taxes
Ottawa eyes charitable tax shelter
11/25/03   Taxes
Break the poverty mentality for a good cause
11/23/03   Taxes
Job-creation schemes don't work
11/03/03   Taxes
Substantial savings result when tax planning's a family affair
10/31/03   Taxes
Choose beneficiary carefully to save tax
10/22/03   Taxes
The forgotten payroll tax
10/16/03   Taxes
The era that wasn't
09/25/03   Taxes
That Alabama tax vote
09/16/03   Taxes
Drawing down an RESP is no simple task
09/14/03   Taxes
Insurance trusts can accomplish plenty
09/06/03   Taxes
Tax-saving tips make cost of education easier to bear
08/30/03   Taxes
Equity strategy can save on taxes
08/23/03   Taxes
Proper landscaping design could save you tax
08/10/03   Taxes
Deadline for U.S. beneficiaries of RRSPs
07/23/03   Taxes
Transferring a family cottage to the kids can save tax
07/20/03   Taxes
U.S. targets big names in fighting abuse of tax shelters
07/07/03   Taxes
Here's 77,000 reasons to pay GST
06/24/03   Taxes
Consider an Alberta trust even if you don't live there
06/22/03   Taxes
'Non-competition' payments may be tax-free
06/19/03   Taxes
Make the most of your income tax refund this year
05/05/03   Taxes
The myths of tax preparation and planning
04/26/03   Taxes
Calculating your adjusted cost base
04/19/03   Taxes
Use cash in your company smartly
03/22/03   Taxes
Overtaxed? Don't move to the U.S.
03/11/03   Taxes
Supreme court sets six-year limit on tax collection
03/09/03   Taxes
Business owners should applaud the budget
03/03/03   Taxes
New player enters tax software market
02/20/03   Taxes
Intuit: Only in Canada, Eh!
02/16/03   Taxes
TurboTax: Sector 33 Naughtiness
02/16/03   Taxes
Higher price is biggest change in tax software
02/03/03   Taxes
To RRSP or not: six issues to weigh
01/31/03   Taxes
TurboTax customers upset by DRM
01/22/03   Taxes
Do the little things right to save tax
01/13/03   Taxes
Tax cuts for the rich are what's necessary
01/13/03   Taxes
Ok, now the end is nigh
12/18/02   Taxes
Defer income till new year to shave tax bill
12/16/02   Taxes
Tis the season for tax tips
11/30/02   Taxes
Charitable gifting
11/27/02   Taxes
Probate revenue plunges
11/20/02   Taxes
Unlock locked-in dollars for more flexibility
11/13/02   Taxes
Goodbye REOP, hello "pursuit of profit"
11/01/02   Taxes
Handle deceased's home properly
10/29/02   Taxes
Making the most of capital losses
10/22/02   Taxes
Be prepared to pay tax on your perks
09/28/02   Taxes
Presumed guilt puts taxpayers in bind
08/19/02   Taxes
Gains from past losses
03/15/02   Taxes
Highlights of budget 2001
12/10/01   Taxes
When is tax evasion unethical?
11/13/01   Taxes
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Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More...