Friday, October 12, 2018

Short Takes: Killing Mutual Fund Reforms, Taxing the Rich, and more

Here are my posts for the past two weeks:

Managing a GIC Ladder in Retirement

More Money for Beer and Textbooks

My House vs. My Stocks

Here are some short takes and some weekend reading:

Gordon Pape takes Doug Ford and Vic Fedeli, Ontario’s Finance Minister, to task for “dumping cold water” on Canadian Securities Administrators’ mutual fund reforms “that would significantly benefit investors.” This position “flies in the face of everything the Premier claims he stands for.”

The C.D. Howe Institute reports that the 4% increase in the top federal income tax rate didn’t produce the hoped-for $3 billion increase in tax revenues. Instead it resulted in a slight decrease in combined federal/provincial tax revenues. My own retirement made a small contribution to reducing tax revenues in the future.

Canadian Couch Potato interviews Larry Bates who is trying hard to explain to Canadians just how much of their investment gains are getting consumed in fees. Check out his “T-REX Score” calculator.

Preet Banerjee interviews Ben Rabidoux for an interesting discussion of real estate across Canada from the points of view of both owners and renters.

Robb Engen at Boomer and Echo answers questions from a reader considering borrowing money to invest. Robb does his best to offer the alternative of not borrowing, but just investing available cash from income. However, I’ve never had much success in talking people out of using leverage to buy stocks.


  1. I am a high income professional (doctor). The marginal income taxes passing the 50% threshold is a psychological deterrent to work. The subsequent attack on corps to increase tax on actively earned income if you have a lot invested has a similar effect.

    The most eloquent solution to progressive taxation when it becomes excessive is to spend less and work less. Most of us would not leave medicine since it is intrinsically rewarding, but many will enjoy it more working part-time. I know many colleagues who have started looking at this option or already started shifting that way. Just evidence that the Liberals care about our work/life balance ;)

    1. @Loonie Doctor: "Just evidence that the Liberals care about our work/life balance" -- LOL. I did this myself for a couple of years by taking a month off unpaid in addition to my regular vacation. Then I went the whole way and retired.

  2. The following exchange is reproduced to remove broken links.

    ----- BHCh October 12, 2018 at 2:01 PM

    Thanks for the info on the net outcome of tax hikes. I did my very best to make a small personal contribution to this outcome. Not that they - or anyone else- will learn a thing from the whole exercise.

    ----- Michael James October 12, 2018 at 2:23 PM

    @BHCh: I find discussions about this subject often degenerate into "they have lots - they should pay." Lots of people don't get that even if you decide the high income earners should pay more and you raise their tax rates, many of those high income earners will find ways to not pay more. My way was to retire.

    ----- BHCh October 12, 2018 at 10:28 PM

    Yep, many love the concept of “making the rich pay”, without appreciating or perhaps caring how it works in practice. And this isn’t the first example; works this way every single time. And wins elections, at least for a while.

    My way was to spend A LOT of effort on planning and then changing things around. 53% Tax wasn’t the only consideration, but an important one.