this post was submitted on 14 Jun 2024
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[–] brlemworld@lemmy.world 13 points 6 months ago* (last edited 6 months ago) (3 children)

No, if you saved up $500k you would pay $0 in taxes because that's not capital gains. If you happened to hit the jackpot and win on the stock market with your ~~investments~~ bets to the tune of $500k in gains, then you would pay $333k in taxes from your stock market lottery winnings.

[–] yardy_sardley@lemmy.ca 19 points 6 months ago (1 children)

No, you would not pay $333k in taxes. You would add $333k to your taxable income for the year, and then pay regular tax rates on your total income.

If you made $500k in capital gains and had no other income that year, then by extremely rough estimation (I'm too lazy to pull out a calculator to get the exact figure) you would only be paying somewhere in the ballpark of $60k in federal taxes, then another $20k-$30k based on what province you live in. All things considered, that's like a 17% effective rate, which is too damn low if you ask me.

And that's only on amounts greater than $250k. So anyone this change actually affects is going to be fine. The people complaining about it are straight up lying.

[–] Kelsenellenelvial@lemmy.ca 3 points 6 months ago

There’s also methods to potentially shelter some of that too. If a person has RRSP room and doesn’t actually need the whole amount available you can use that to delay paying the tax and hopefully reduce the rate paid. You can also make some investments within a TFSA, which means no taxes owed on the growth. Both of those options have caps on contributions so they’re a great for low-moderate income earners to minimize their taxes, while higher income earners can only shelter a portion of their income.

[–] Bye@lemmy.world 3 points 6 months ago

If you save money for retirement you’re ideally selling gains off of that money. Like you have 500k invested in something safe like bonds, it’s making maybe 5% a year, so you live off of that 5% in early retirement and a bit more than that in late retirement. Then you have money leftover when you die, so your heirs can have it.

[–] ILikeBoobies@lemmy.ca 2 points 6 months ago (1 children)

Winnings aren’t taxed in Canada

[–] Ransack@lemmy.dbzer0.com 4 points 6 months ago

You're correct but they're not taking about lotto/gambling winnings