It’s no secret that governments are awash in debt. But, where is the money to pay down federal and provincial deficits and accumulated debt going to come from?
Hopefully, it will come from positive economic outcomes — growing economies, higher wages and bigger business profits — that naturally increase the amount of taxes collected. But, if those positive outcomes don’t happen, governments look to the taxpayer.
Recently, in Ontario, Nova Scotia and Quebec, new high-income surtaxes have been introduced. This has happened in other jurisdictions around the world as well. Taxing “the rich” is a worrisome trend for your future wealth. Here’s why.
The term “rich” requires definition; you might be surprised that it may apply to your family, too. Windfalls and one-time financial events occur at different times in a family’s financial lifecycle and can push your income into a high-surtax category. Even Grandpa, today a typical pensioner, will fit into the “rich” profile for tax purposes if he sells his business or dies with a large accumulation in his unspent RRIF account.
It’s Your Money. Your Life. Tax planning can help you avoid high taxes on windfalls and, therefore, are an important part of your family’s economic future. Be sure you become informed, then plan for a softer tax landing when windfalls occur.