Finance Minister and Deputy Prime Minster Chrystia Freeland defended the luxury tax during an ongoing tour of Alberta on Wednesday. (Bill Graveland\/The Canadian Press)<\/figcaption><\/figure>\n“I think it is entirely reasonable to say to someone who has $100,000 to spend on a car or a plane, or $250,000 to spend on a boat, ‘You need to pay a 10 per cent\u00a0tax to help everybody else,'” Freeland said during a news conference following her tour.<\/p>\n
“I think it is great for Canadians to be successful. It is great for Canadians to be prosperous. I also think that people who are doing really, really well should feel comfortable supporting everybody else.”<\/p>\n
Businesses ask: Why not RVs too?<\/h2>\n Mark Delaney is director of sales and marketing at a\u00a0Vernon, B.C., company that manufactures boats worth up\u00a0to $500,000. He said the tax will undermine\u00a0a boom in boat sales that began when people were stuck at\u00a0home during the COVID-19 lockdowns.<\/p>\n
Delaney said the tax is coming at a time when inflation is driving up the cost of parts for boats.\u00a0He warned that the measure will harm tourism businesses and could\u00a0make purchasers, many of\u00a0whom are business owners themselves,\u00a0think twice about buying.<\/p>\n
WATCH | Critics fear new luxury tax could cost jobs:\u00a0<\/strong><\/em>Starting this week, if you buy an expensive boat, plane or car in Canada, the federal goverment says you can afford to pay more. But critics of the levy say it could hurt the economy while not providing much benefit.<\/span><\/span><\/span><\/p>\n“They feel like they’ve paid more than their fair share in payroll taxes\u00a0and everything else they do in their businesses every day,” Delaney said. “And so to be hit … with this tax is certainly not putting us in a very good light with the customer.”<\/p>\n
Both Delaney and Pat Sturgeon, who sells sailboats costing\u00a0up to $700,000 in Mississauga, said it’s unfair that\u00a0other pricey items \u2014 such as\u00a0RVs\u00a0\u2014 are not being hit with the tax\u00a0as well.<\/p>\n
“A\u00a0lot of my clients are not necessarily wealthy clients. In fact, most of them are just regular people trying to fulfil a dream,” Sturgeon said.\u00a0<\/p>\n
“The only thing I’m hoping is that the government will find out this tax is not working, it’s not creating more revenue, it’s actually costing them more money, that they’ll end up scrubbing it.”<\/p>\n
Tax a ‘loaded approach’: economist<\/h2>\n Don Drummond, a former federal assistant deputy minister of fiscal policy and a former chief economist for TD Bank, said the tax could spawn “cottage industries” around people trying to circumvent it.\u00a0 <\/p>\n
“Whatever you define as the threshold for a boat or whatever luxury good it is, somebody will do something to get around it,” Drummond said. “That’s a waste of the consumers’ time.\u00a0And it’s a waste of the tax officials’ time.”<\/p>\nDon Drummond is a former assistant deputy minister of fiscal policy for the federal government. (Jovan Matic\/CP)<\/figcaption><\/figure>\nThe luxury tax will be a tough sell, he said,\u00a0because \u2014 unlike a tobacco tax \u2014 it’s not aimed at improving health outcomes. And\u00a0there are already mechanisms to tax the wealthy, Drummond added.<\/p>\n
“It’s not like these items are particularly dangerous to individuals or to society,” he said of high-priced boats, cars and aircraft.\u00a0<\/p>\n
“The marginal tax rate on higher-income individuals is already over 50 per cent. If you wanted 60 or 70 per cent, that\u00a0would be the way to do it.<\/p>\n
“But [the luxury tax] is a loaded approach. It’s not just saying, ‘We want to have the better-off paying more tax.’ We’re saying we want them to pay more tax on very specific things, not even close to being all luxury goods.”<\/p>\n
Article source: https:\/\/www.cbc.ca\/news\/politics\/luxury-tax-boats-cars-planes-federal-government-take-effect-september-1-2022-1.6568421?cmp=rss<\/a>\r\n<\/p>","protected":false},"excerpt":{"rendered":"
Ottawa’s luxury tax on high-priced cars, planes and boats is coming into effect today, despite warnings from some critics that the measure will hurt the economy and turn out to be more trouble than it’s worth. As of Thursday, luxury cars and personal aircraft with sale prices of over $100,000 and\u00a0boats for personal use with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[84],"class_list":["post-310834","post","type-post","status-publish","format-standard","hentry","category-political","tag-political"],"_links":{"self":[{"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/posts\/310834","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/comments?post=310834"}],"version-history":[{"count":0,"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/posts\/310834\/revisions"}],"wp:attachment":[{"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/media?parent=310834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/categories?post=310834"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usa.timesofnews.com\/breaking-news\/wp-json\/wp\/v2\/tags?post=310834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}