Warning: rant coming!
You’ve probably heard all the talk about the changes to Capital Gains recently. It might surprise you to know that 6 weeks after this was announced we still don’t have any legislation wording introduced, so we have NO IDEA how this will actually work – and these new (unknown) rules are supposed to take effect in 3 weeks! It’s not looking good for business owners at all!
This is yet another example of our current government’s “Fire first, aim later” approach – trying to look good to the public, but having no real idea what they are doing. The truth is that the Parliamentary Budget office estimates that the revenue that this change would bring in over the next 4 years would be spent in about a week under this new budget! Did you know that the interest payments on our debt now exceed the revenue the government receives from GST? The problem is NOT a lack of tax revenue – it is an EXPENSE problem. This government does not know how to stop spending. They are addicted to taking more money, wasting it, and then coming back for more. THIS HAS TO END! Our Great-grandchildren are going to be left with a bankrupt system.
And don’t get me started on interest rates? It is very unlikely that rates will come down much. While the published rates seem to be coming down, the Bank of Canada has warned that increased government spending is actually causing inflation. They have manipulated the published inflation rate to hide the real inflation from the public (we all know it’s there – we feel it every day!).
And it’s no different in the US. Janet Yellin, US Treasury Secretary, has once again delayed lowering interest rates. And with good reason. Inflation is still too high. And as I’m sure you know, lowering interest rates has an inflationary effect on the economy.
The biggest problem I see is that the federal government (in fact, all levels of government) continues to shovel billions of dollars into the economy, creating ever larger deficits, and contributing to the inflation rates.
Although there is a lot of pressure to increase taxes on corporations and the wealthy, anyone doing the math on that will see that the additional revenues that would be generated will not cover the increasing federal spending.
And as far as taxing corporations, who do they think actually pays that increasing tax? Corporations must create value for their shareholders. When taxes increase, they increase their prices to pay for it.
And by the by, who are the majority owners of our largest publicly traded companies? Not the ultra rich, it’s the pension plans that all us commoners invest in for retirement. So in playing “Robin Hood” with these companies, the feds are, in fact, adversely affecting all the current and future retirees.
Small/Medium businesses and families continue to suffer from higher interest rates and inflation. So brace yourself for this. While I tend to not be a doomsday pessimist, I am a realist about our current national trends. While there is little hope of shrinking our federal government, they need to curb their spending, JUST LIKE THE REST OF US HAVE TO DO!!
