Folks:
Before the last election, a friend (white, but married to someone who identifies as “mixed race”) posted the following to Facebook:
The rise of The Donald has brought a lot of racists and haters out into the open, and he’s to squarely to blame. It baffles me that the good and generous people I know can support him. Even in NYC I see these hate crimes happening, and it puts my family and loved ones in danger. His racism, sexism, bullying, vengeful nature, illegal acts, etc. is not leadership for a UNITED States of America; he is tearing us apart. A vote for him is a direct assault on my family.
I tried to figure out whether there were any limits on this “direct assault.” I asked “What about a person who had been promised a lucrative, interesting, and rewarding job within the Trump Administration? What if she shared all of your political beliefs and was going to work to implement them within whatever department Trump was planning to park her? Could she vote for Trump in hopes of actually getting this job and yet not be directly assaulting your family?” The answer was a simple “no”.
Then I posed the following hypothetical: “What about a woman who was born in the U.S. but emigrated to Canada as a child? She was successful in business in Canada, accumulating a fortune of $50 million. All of the money was earned in Canada and she has no connection to the U.S. other than the childhood citizenship, which she never gave up. Upon her death, her children will get only about half of the $50 million because her estate will have to pay U.S. federal death taxes. Hillary wants to raise death taxes; Trump wants to eliminate them on the grounds that the income that led to the savings was already taxed. If this woman votes for Trump in hopes that Congress will agree with him to reduce death tax rates, is she directly assaulting your family?” The answer to that was “yes.” His female-named friends added some more:
Because heaven help those poor kids if they’re unable to make it on just 25M. In my world that’s a high class problem to have. I don’t think I know you Philip and I’m sure you’re a very nice man but I can’t believe you’re trivializing T’s thoughtful post of very valid concerns with dollar signs. Or perhaps your intent was sarcasm…?
Humanity is far more important than money, Philip.
A vote for Trump makes this land, our children, your hypothetical descendants in Canada, and ALL the other human beings on this rock far less safe.
Enough with the hypotheticals, it’s incredibly insulting to T’s original post. The issue that T raised is not hypothetical. It’s real and it’s serious and it should be of concern to everyone. I have a multitude of friends around the world who are of different ethnicities, genders, religions, & orientations and I fear for what could happen to them given the results of tomorrow’s election.
I probed a little more and it turned out that the answer was always the same. Anyone who disagreed with this group of Hillary supporters was “directly assaulting” them and/or their families.
As part of my researching the hypothetical Canadian I discovered that Canada has no death taxes, neither inheritance nor estate (TurboTax), though they do collect capital gains tax on any unrealized capital gains.
I’m wondering if this tips the balance and makes Canada a lower-tax environment for wealthy people than the U.S. (where total tax rates, for those who are working to accumulate assets for their children, are close to 90 percent). A lot of rich people own stock in corporations. Like other OECD countries, Canada has a much lower corporate tax rate than the U.S. (Tax Foundation). Personal income tax rates also seem to be lower (Canada Revenue Agency). Sales taxes are higher in Canada, of course, but a wealthy person who wants to save, invest, and pass down to future generations won’t be buying a lot of Teslas and other toys.
Canadian readers: What am I missing?
Are they kidding? Humanity matters far less than money. Do they ever expose themselves to the news?
Do your friends evaluate all members of a group based on the worst behavior of a few? I bet they would find an exception to that practice if they were to share their opinion about muslims.
The poster obviously doesn’t know the meaning of ‘direct assault’.
Those women should sue for being directly assaulted 61,578,949 times on November 8, 2016. Then they could pool the settlement money and donate it to a liberal cause. That would restore our faith in humanity.
You literally raped them with your opinions, Phil. Especially the women, but especially the guy.
When I moved from Canada to the US, in 1997, it didn’t feel like cumulative Canadian taxes were lower, and I’m really surprised if that has changed in the last 20 years. If I recall correctly (and I’m happy to be corrected), the marginal tax rate for a British Columbia resident was approximately 50% for every dollar over about $65,000. That included federal income tax and provincial income tax. I’m not sure if it included Social Insurance (similar to Social Security) payments, but I think so. I believe it also included taxes related to Canada’s healthcare system (which is actually operated by the provinces, with funding from the federal government).
My perception is that my taxes went down a little when I immigrated to the US, and the difference increased as my income increased. Of course, I had to get used to paying for things that had previously been included in my taxes, like waste removal, street lights, sewer, etc., and I had to pay medical insurance premiums. But, in the US I got the benefit of being able to file jointly with my wife (who’s immigration status initially prevented her from working in the US), which I couldn’t do in Canada.
This is getting long, and I’m realizing that there are a lot of details that make it hard to do an apples-to-apples comparison. Here’s the simplest evidence that Canadian taxes are higher: I worked in the US as a Canadian resident for a few years, under the NAFTA rules (i.e., non-immigrant). The tax treaty between Canada and the US was structured in such a way that you have to file in both countries, but you get credit for taxes paid. Basically you pay the higher of the two country’s taxes, and get credit in the other country. Every year I was subject to taxation in both countries, the total Canadian tax owed was appreciably higher than the total US tax owed. And I had assistance from accountants to make sure everything was done correctly, so I’m pretty confident that the filings were correct.
I have a question about PhilG’s second hypothetical. Would a Canadian resident who emigrated from the US as a child be allowed to vote in the US election? If so, I assume it would be via absentee ballot, but is there a separate federal ballot that non-resident citizens can use? I thought all absentee ballots were issued/counted by states for their absent citizens.
“Canadian readers: What am I missing?”
Overall, taxes are definitely higher in Canada. In 2015, total government revenue (federal, provincial, municipal) was 38.6% of GDP, five points higher than the US at 33.5% of GDP. Source: OECD. We get more for it, though: good public schools, public health insurance, more generous social insurance.
More to the point, though:
“If this woman votes for Trump in hopes that Congress will agree with him to reduce death tax rates –”
In a democracy, shouldn’t people be voting based on what they think is best for the country as a whole, not solely their personal interests? Have rich Americans completely lost their sense of loyalty to their country?
A personal example: the previous Canadian federal government introduced income-splitting (basically joint filing), which primarily benefited households with a single high earner. This was a significant benefit to us personally: it increased our after-tax income by C$2000. But I thought it was a terrible policy. I was irritated enough that I donated the entire amount to the opposition party.
When a Facebook Trump-hater suffers a violent “Knockout Game” attack on a darkened Cambridge or other big-city street by some other Trump-hater, is that “direct assault” more painful and debilitating than the “direct assault” of a Trump vote?
I think some forms of taxation are more advantageous here in Canada. I might be wrong, but I think capital gains on company stock options might be treated better here.
And you definitely get more for your tax dollar. As Russil says, good schools, safe streets and (albeit somewhat rationed) health care.
Canada taxes based on residency. The US taxes based on citizenship. Your hypothetical expat is not only subject to the US estate tax applied on the estate she accumulated entirely in another country (depriving that country of the value of those funds potentially invested in our economy) but must file, at punitive cost, returns to the IRS every year, even though living in a higher-tax environment she won’t pay any tax to the US because of foreign tax credits paid here.
And each year she has to file an FBAR (Foreign Bank Account Report) to the IRS disclosing the maximum balance in all her accounts, which are only foreign to you exceptionals living in the Homeland.
Oh yes, and despite having left the US and having no US ties, she’d still be subject to FATCA, the invasive reporting requirement that the US imposes on all foreign financial institutions that requires them to disclose financial data to the IRS in violation of privacy laws of the country involved.
And reportedly, the costs of all this exceed the revenues produced.
And don’t get me started on “accidental Americans”: children caught in this trap because their parents happened to be living or working in the US when they were born, or who were born in a US hospital in Maine or another border state where cross-border medical treatment used to be common.
Wonder why so many expats are trying to renounce?
The irony? Trump might actually address some of these issues. If not, his election will certainly lengthen the queues for renunciation interviews for those stained by US citizenship.
Rich people in Canada put all their money into dividend yielding blue-chip stocks. The 4-5% dividends paid are tax free (because what civilized country would tax a corp on its profits, then tax again when those profits are paid as dividends?).
Your $50M net worth hypothetical would earn a nice net spending income of $2-2.5M/yr compounding at 3-10% per year as their portfolio’s value grows. Not too shabby.
billg: Dividend income is taxable in Canada. To avoid double taxation, dividends from Canadian companies are taxed at a lower rate than regular income.
Russil: If Canada doesn’t double-tax corporate earnings then that is definitely a lower-tax environment than the U.S. http://stats.oecd.org//Index.aspx?QueryId=58204 shows that Canada’s “combined corporate income tax rate” is 26.7 percent compared to 38.9 percent for the U.S. (but then those U.S. earnings are taxed again at roughly a 30 percent rate (depending on the shareholder’s state of residence) as dividend income).
Philip: Canada definitely has lower corporate tax rates. We have consensus among mainstream economists that high corporate tax rates are counter-productive compared to other taxes (like Canada’s value-added tax), even when you want a strong safety net. Both the Liberals and Conservatives have lowered corporate tax rates. (But the government also goes after corporate tax avoiders, based on general anti-avoidance rules; a recent story.)
In general, because there’s more consensus here on fundamentals, Canadians vote on competence, not just ideology. I think the big problem the US has isn’t big government — as a percentage of GDP, it’s significantly smaller than Canada’s; it’s that the government isn’t managed particularly well. I’d suggest that US voters ought to be pushing for good government, not smaller government.
re: Canada
it depends how cunning you are – there are more tax shelters and other ways to avoid taxation.
For instance, you can sell a small business and the first $750K is exempt from capital gains tax. And you can do this again and again, from what I can tell… so if you had a restaurant chain of say 4 restaurants, putting them each in their own corporation would exempt the first $3 million of a sale from ANY taxation, as I understand it.
http://www.dummies.com/personal-finance/personal-finance-taxes/tax-savvy-ways-to-sell-your-canadian-business/
second question:
Where is this person located? NYC is claiming a huge increase in hate crimes, yet presumably such hate crimes are not committed by tourists but by the resident of NYC – and 4 out of 5 boroughs went overwhelmingly for Hillary. Are all the hate crimes committed by roving packs of white middle-aged Staten Island guys? If not, how is it Trump’s fault that one Hillary supporter is being oppressed by another?
If we replace your hypothetical with Mussolini would you have a different understanding about the “direct assault”? How about Hitler?
I am personally still hoping that Trump is analogous to Berlusconi, in which case I don’t have to see the vote as a personal assault (just horrible and wrong headed). But, voting to put an authoritarian dictator in power would be a direct assault. And, the answer would always be the same, with the limited possible exception of “did you vote for Stalin in order to fight Hitler”?
The key is where we are heading and the deepest fear of those of us who thought Trump completely and utterly unfit for the presidency is that we don’t know and that if the worst happens, when we know, it will be too late.