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Canadian Investing / Canada - RRSP Strat / Taxation
|Subject: Financial Post Article||Date: 11/16/1999 2:11 PM|
|Author: cirus||Number: 111 of 1189|
Here are some excerpts from an article in today's FP, in which my own CEO complains of losing talent:
When, some weeks back, Jean Chretien, the Prime Minister and the country's chief tax oppressor, advised high-income citizens of Taxania to leave, he may have been inadvertently dispensing good advice. "Many wealthy Canadians are doing just that", argues Nortel Networks CEO John Roth.
"Because Canada's future wealth-producers are leaving, Canada is going to face a crisis," Mr. Roth told Ivey's Ed Pearce. "If you want to see what this will look like, look at Quebec," he said. "They've got no money. Who are they going to tax? That's what this might lead to."
Canada is a lousy place to earn a living, although Mr. Roth concedes it may be "a great place to retire... For anybody who has crossed the $100,000 Canadian income level, Canada's created a huge incentive to move" Mr. Roth says. "The U.S. will value them far more, pay them a higher salary and ask for less of it back in taxes."
"So in Canada you are wealthy at $42,000. In America you're wealthy at $285,000" Mr. Roth says.
Canada's tax treatment of capital gains is yet another disincentive, particularly for technology entrepreneurs. U.S. capital gains taxes are 18%, half the 36% it works out to in Canada for people in the top bracket.
The whole article is available at:
I still stand behind my argument that we're not left with 2nd rate engineers, but clearly we have a problem. I know at least eight highly-qualified, >$100K salaried individuals who have already taken Mr Chretien's advice, and they are not coming back.
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