Canadian Lawyer

66 www.canadianlawyermag.com goods, then, theoretically, you should pay more for consumption," he says. But he argues that the money from the tax isn't enough to make it more than political bait. He also points out that the extra funds would go to general revenue, not to any sort of anti-poverty programs, for example, which might offer more of a justification. Since his LEGAL REPORT TAX boat — but what's fair about that? "We already pay taxes on property like that. There's no need to punish the so-called 'rich' for wanting to acquire stuff like this. In my view, this just contributes to class warfare." Timokhov says the government is looking for ways to increase revenue that would be non-controversial to its base, and from a tax policy perspective, the luxury tax would make the GST tax progressive in the same way the income tax system is progressive — and gen- erally considered fair. "The more you make, the more you're able to consume. And if you consume luxury high-net-worth clients mind paying an extra $1,000 on their luxury item, it may not mean more wealthy people buying luxury goods outside of Canada. Moody says he could see games being played — prepare to see a lot of luxury vehi- cles priced at $999,999 with a special bottle of vodka thrown in for an extra $20,000 — 15% on the first $47,630 of taxable income, plus 20.5% on the next $47,629 of taxable income (on the portion of taxable income over $47,630 up to $95,259), plus 26% on the next $52,408 of taxable income (on the portion of taxable income over $95,259 up to $147,667), plus 29% on the next $62,704 of taxable income (on the portion of taxable income over $147,667 up to $210,371), plus 33% of taxable income over $210,371 CANADA'S INCOME TAX BRACKETS, 2019 "What this does is it really discourages small countries like Canada with a giant south of the border. It basically says, 'Hey, best and the brightest, we don't want you.' That's the real danger." Kim Moody, Moodys Gartner Tax Law LLP CAPITAL GAINS INCLUSION RATE Introduced in 1972 Dropped in February 2000 Increased in 1990 Reduced again in October 2000 where it has remained to this day 50% 50% 66.7% 75%

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