John Stackhouse’s Post

Not a week has gone by since the 2024 Budget Proposal where I haven't had a serious talk with someone about moving to the US. These people range from C-Suite executives to a couple who are new doctors in their late-20's (and apparently many of their peers are considering moving their new practices down south - massive brain drain potential). The data in the article only goes until 2022 but shows a clear trend that likely accelerated in 2023 and has probably gone exponential in 2024. Politics, taxes, and affordability are frequently cited in the article as a major reason people give for making the move. I remember back to the early 20-teens when non-resident US citizens were rushing to renounce their US citizenship because the IRS made all citizens, regardless of residency, file a US tax return (which costs $$ every year). That's a valid reason, in my opinion, but it does show the fact that these things can ebb and flow. Without getting political and just reading the tea leaves, it does seem that the pushback for the proposed Capital Gains Inclusion changes is significant enough to be political suicide. Even without that, it seems like Canadians have had enough of Trudeau, so his days are numbered. I hope all of these Hail Mary announcements don't continue and turn into disaster. A scenario that could play out is that Poilievre gets into power next year but inherits a very difficult environment and doesn't have the time needed to make sufficient improvement. Then Mark Carney (former BoC and Bank of England governor), who has been signaling a potential Liberal party run and is very well known, wins the subsequent election and continues the ball that Poilievre starts, but gets all the credit. Interestingly, Carney has been quite critical of Trudeau even though they are members of the same party. Bottom line: if you are considering a move to the US, be careful of doing something that is not easily undone because change is afoot.

💸 Changes to Canada’s capital gains tax rate could be on the way, and it’s smart to be prepared. Even though it’s not final yet, planning ahead could help you avoid surprises. Stay informed and ready for what’s next! #CapitalGains #TaxTips #CanadaFinance

Our latest blog digs deeper into strategies to consider regarding the 2024 proposed inclusion rate changes for personal and corporate capital gains. Also, read our April market and economic update for our thoughts regarding the diverging interest rate paths for Canada and the U.S.

Last week, UK Chancellor Rachel Reeves took the opportunity to take centre stage and deliver her inaugural Budget, before focus turns to the US election this Tuesday. Ultimately, she delivered a range of tax rises in concert with an expansion in government spending. The Budget had little impact on UK equity markets, with the FTSE 100 finishing the week down slightly (0.87%). Hetal Mehta, our Head of Economic Research, noted: “While it was one of the biggest tax-raising Budgets of recent decades it was also one of the biggest fiscal loosening announcements too. The government has got public spending, as a share of GDP, broadly moving sideways rather than declining as per the previous OBR forecasts and boosted investment so that the overall level of longer-term GDP will be 1.4% higher. However, most of the uplift comes in the next couple of years." That said, she warned: “Given the change to the fiscal rules and the definition of debt, it is surprising to see the fiscal headroom only increased slightly from the record low of the previous Chancellor. Complying with the rules within a three-year horizon could give some scope for more stimulus ahead of the next election, but that will depend on how the economy performs.” #UKbudget #taxation #economy #USelection #AIM

Despite left-leaning academics and economists who support the capital gains inclusion rate proposal on the basis of equity, the short rebuttal is that this ignores the real world of investing, where investors look at overall risk, liquidity and the time value of money. John F. Kennedy once said: “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth of the economy.” Wise words from JFK from more than 60 years ago. The Canadian government would be wise to heed such advice and eliminate the capital gains inclusion increase proposal. For the benefit of all Canadians. https://lnkd.in/g9-m2RWG

Your 7 minute weekly financial update 🗞️ ⛈️ Stock Take After the UK Budget but before the US election… are we in the eye of the storm? 👩🍼 Wealth Check We insure our cars, the contents of our homes, even our holidays and our pets, almost as a matter of course. But have you ever stopped to think about protecting what you value most – your family and your quality of life? 📈 In The Picture Last week’s budget saw one of the highest increases in Government spending in recent years – paid for by a combination of tax rises and borrowing. Read more at the link below: https://lnkd.in/exHMHZPA #uselection #financialnews #weeklynews #financialadvice #ukbudget #protection #protectionplanning

Assessing fiscal health is not straightforward, because the economic outlook can shift and markets can suddenly decide that government plans are untenable. Still, even as Canada approaches this era in decent shape, it will need to signal dedication to its fiscal anchors with a focused fiscal policy that tackles external challenges, targets assistance to those most in need, and encourages domestic investment and growth …

Here’s what’s NOT fair to younger people in this idiotic tax increase: 1. Younger people will get less inheritance from their parents when their parents sell their cottage or investment property. So young people, will have to work longer, and enjoy less as they try to build their retirement income. 2. Younger Canadians will have a harder time finding a job, as more and more entrepreneurs move their business to the US or elsewhere to get away from the government profiting from our hard work and risk. 3. Younger Canadians will suffer from worse health care as doctors flee this punishing tax and move their practices to more friendly climes in the US. We already have a problem with this. It’s only going to get worse. 4. Younger Canadians themselves will forego becoming entrepreneurs in Canada as the punishing tax regime makes it not worth the risk and effort. So they’ll be stuck in corporate drone jobs, pushing up mental health issues, or they’ll have to move away from their native country. Either way, a future generation of Canadian entrepreneurs will be decimated. Whats so “fair” in that?

My latest look at The Labour Party growth agenda suggests doubts are mounting, with analysts warning further tax rises could be coming as soon as next year. U.K. Finance Minister Rachel Reeves last week announced a series of reforms, including financial services deregulation and measures to boost pension investments — the latest in a slew of changes aimed at getting the country’s economy growing again. “These sort of regulatory changes – not just in finance but in planning and other areas – if they don’t get the economy moving, I think we’re looking at more tax rises again,” James Smith, economist at ING, told CNBC International. The U.K. economy barely grew in the third quarter, eking out a less-than-expected 0.1% expansion, data showed last week. Markets will now be watching whether the government’s reforms can inject growth into the flagging British economy. Read the full story here: #UK #politics #economy #tax #investment #reform #spending #business

Last week, UK Chancellor Rachel Reeves took the opportunity to take centre stage and deliver her inaugural Budget, before focus turns to the US election this Tuesday. Ultimately, she delivered a range of tax rises in concert with an expansion in government spending. The Budget had little impact on UK equity markets, with the FTSE 100 finishing the week down slightly (0.87%). Hetal Mehta, our Head of Economic Research, noted: “While it was one of the biggest tax-raising Budgets of recent decades it was also one of the biggest fiscal loosening announcements too. The government has got public spending, as a share of GDP, broadly moving sideways rather than declining as per the previous OBR forecasts and boosted investment so that the overall level of longer-term GDP will be 1.4% higher. However, most of the uplift comes in the next couple of years." That said, she warned: “Given the change to the fiscal rules and the definition of debt, it is surprising to see the fiscal headroom only increased slightly from the record low of the previous Chancellor. Complying with the rules within a three-year horizon could give some scope for more stimulus ahead of the next election, but that will depend on how the economy performs.” #weekwatch #digestingtheukbudget #dontforgotwiderlense #uscorpearnings #uselections #euconsumerstrength #importanceofprotectingyouandyourfamily #mostimportantasset #beinformed