Canadian Revenue Agency ruling on signing bonuses

[hangman005]

They have a job, it’s taking our money and giving back the bare minimum.

And here I am working my onlyfans to make ends met

Should be capped at 49.9% max and ideally a bit less for the highest bracket. Any person should be entitled to keep at least half of their income that they worked for or generated.

Capital gains should go back to a simple 50% taxable amount on the gain at a max rate of 49.9%.

If that isn't enough tax revenue to pay for all the shit you're spending on as a government, then take a good, hard look at what you're spending and re prioritize on the fundamentals that people need (health care, education, roads, etc.), and not having a piggy bank for every random want and desire.

Well I'll say we are miles apart, I think the maximum should be 0% across the board.... government should be entirely funded via go fund me.

 

[Three On Zero]

And here I am working my onlyfans to make ends met


Well I'll say we are miles apart, I think the maximum should be 0% across the board.... government should be entirely funded via go fund me.

Still waiting on my refund request to be approved.

 

[hangman005]

Still waiting on my refund request to be approved.

Oh it was superceded by my refund refund request.... tough luck.

 

[sportsvg]

Coca-Cola can go HQ their company in many other places, they don't have to be in the US. They already have offices and plants in like 100 other countries. It's not like 1935 or even 1985 anymore.

The US Government has more muscle than Coca Cola does, rules could be made to combat this they just don't want to make them.

 

[Three On Zero]

Oh it was superceded by my refund refund request.... tough luck.

That’s what the CRA would say…..

 

[absolute garbage]

How much of someone else money is "fair" share. The government should go out and get a job like the rest of us and stop extorting it's citizens.

It's not "someone else's" money. It's government's money. They can give you the right to use it, but it's not yours. They literally made it, and they can take it away from you anytime they want. If you resist, they can shoot you in the head if needed. Legally. Because they made the laws too.

Holy shit people nowadays have a childlike understanding of state, government, society, money, taxes. Absolute brainrot.

 

[CokenoPepsi]

I'm sure Tavares would be a lot happier to contribute his tax dollars if they enriched his life, or if he actually had confidence that his tax dollars were helping the Canadian state function. An ArriveCan scandal isn't really a big deal, just a drop in the bucket really and governments are run by fallible humans, it's that we're taxing ourselves into the ground and yet have failing healthcare systems, a military in absolute shambles, rising crime and falling public trust, and as a nation we spend hundreds of millions of dollars on evangelizing feminism in the Middle East. Or pouring tens of billions annually into Indigenous projects that somehow accomplish very little to improve the lives of our Indigenous people.

Taxes are essential for the functioning of a state. We need roads, public education, Canadians are (or were) proud of public health care, and societal safety nets. A military to protect our domestic sovereignty and to project power abroad (soft power needs to be backed up by hard power). Plus some more to handle the various bureaucracies that help a nation of tens of millions function with a semblance of smoothness. All that costs money and people need to pony up, which the rich overwhelmingly do, but people also deserve to get good results from their taxes.

The rhetoric about "the rich need to pay their share" is deeply, deeply toxic, because the simple fact is that they contribute massively, and that their dollars do actually entitle them to some expectations that their money is being spent properly. Canada has been drunk on tax and spend for years and years now, and what are we actually getting for it?

Squeezing millionaires and billionaires for more money would be virtuous if the nation was starving, or the nation faced an existential threat of an enemy. But we don't have that, we just have a lot of people with their hands out. Canada must have the courage to ask itself what value it is providing to its citizens for their money, and remember that the rich are entitled to a fair social contract like the rest of us.

Get the f outta here with your silly partisan BS

 

[StoveTopStauffer]

My bonus gets taxed as income, so should his.

 

[theVladiator]

Good link. Thanks. But I don't like this because this has huge implications relating to regular LTI (Long term incentives)/signing bonuses and things like RSUs. The CRA is basically getting everyone to watch JT get nailed to the wall, while also pickpocket the everyman while they watch this spectacle unfold.

Long story short, I don't think the CRA is approaching this in good faith. I also have seen the CRA play legalese on many other instances in the work I do and I've dealt with more low income individuals being dragged through audits in the last 6 months than I've seen in all of my decades+ career. Many others with careers several times longer than mine are the same.

But don't take this for a rant of someone who just hates the government. I've defended the CRA for years to clients, but this year, I've told clients too many times that I didn't like the direction the CRA was headed. There's a reason why the taxpayer ombudsman has been involved with CRA complaints more than before. There's a reason why the whole bare trust fiasco thing from earlier this year (Articles stating the way CRA approached it wasted over a billion+ in taxpayer funds) is being reviewed by the taxpayer ombudsman for violating the taxpayer bill of rights.

I've said before if the CRA attacked this scenario based solely on the residency thing, I don't have an issue at all. That's how things have been done for decades. But this dicking around with legalese to reframe a situation... that's ridiculous.

That's a long rambling story, but it's dedicated to explaining why you have high level of prejudice against CRA. I can see how this may be important to you to vent and get it out, but specifically for CRA vs Tavares, it has very little consequence.

The main question here is whether CRA is interpreting the rules (aka the "legalese") correctly, or not. The link that I have provides shows that a respected agent (Walsh) is well aware of the rule CRA is trying to enforce, and appears to think that CRA position is justified and Tavares just received bad advice. So the only implications for CRA being successful here is for those who have been ignorant of the existing rules, or those who were breaking them hoping CRA wouldn't notice.

 

[chaz4hockey]

Everybody hates taxes. The big difference is the rich can hire people to make sure they pay as little taxes as possible. Everybody else pays what they have to, and get excited when they get rebate.

Perhaps having some assistance helps BUT statistically top 10% pay 54.4%, top 20%, 61.4% of Canadians taxes.

In the U.S. it’s even higher with The top 10 percent of income earners pay more than 60 percent of all federal taxes and 76 percent of income taxes.

 

[benfranklin]

Canada already has weather, taxes, and media against it for luring players. Lets make the taxes even worse! Yippee! Pride of playing your hometown/country or being immortal for finally bringing a Cup Toronto is all they have now.

 

[notbias]

My bonus gets taxed as income, so should his.

Are you also not a tax resident of Canada?

 

[McGarnagle]

I'm a payroll professional in the US. Not familiar with Canadian tax law, but in the US as non-deferred supplemental wage over $1M, the bonus would be taxed at a 37% flat rate when the check is cut.

Regarding all the "fair share" arguing, athletes are probably the one segment of millionaires who do earn 7-figure salaries through payroll and are W-2 employees. Entrepreneurs like Musk or traders like Warren Buffet may have nominal salaries through their companies but the vast majority of their wealth is in unrealized equity, money which doesn't really exist until their shares are sold, which triggers a capital gains tax. Equity gives them something to secure loans against so they can game the system that way, but it's money that only exists on paper. It's not like they get a $750 million payroll checks every two weeks. It's hard to tax money that's not physically real, and they'll always find ways to lower their tax burdens, as we all try to do every April when we file our own.

 

[ManofSteel55]

Coca-Cola can go HQ their company in many other places, they don't have to be in the US. They already have offices and plants in like 100 other countries. It's not like 1935 or even 1985 anymore.

They can, but the fear mongering that these companies are going to move out their HQ's out of country is just that - fear mongering. It's not the same as laying off your grunt workers and opening up a new factory in the 3rd world, where you can pay your new staff a nickel an hour. If you move your HQ, you have to move it somewhere that your management will move to - and then pay for them to move - or lay them all off and try to find a new crew of managers in another region. And depending on what region that is in, it might be really hard (and expensive) to find the people with the right skills. It isn't as easy as you are suggesting for companies to relocate their entire operations outside of North America.

I'm a payroll professional in the US. Not familiar with Canadian tax law, but in the US as non-deferred supplemental wage over $1M, the bonus would be taxed at a 37% flat rate when the check is cut.

Regarding all the "fair share" arguing, athletes are probably the one segment of millionaires who do earn 7-figure salaries through payroll and are W-2 employees. Entrepreneurs like Musk or traders like Warren Buffet may have nominal salaries through their companies but the vast majority of their wealth is in unrealized equity, money which doesn't really exist until their shares are sold, which triggers a capital gains tax. Equity gives them something to secure loans against so they can game the system that way, but it's money that only exists on paper. It's not like they get a $750 million payroll checks every two weeks. It's hard to tax money that's not physically real, and they'll always find ways to lower their tax burdens, as we all try to do every April when we file our own.

Aren't capital gains taxes relatively small though? 15% of a $50M sale might seem like a lot, but it's a drop in the bucket to the billiionare paying it.

 

[ManofSteel55]

I'm a payroll professional in the US. Not familiar with Canadian tax law, but in the US as non-deferred supplemental wage over $1M, the bonus would be taxed at a 37% flat rate when the check is cut.

Regarding all the "fair share" arguing, athletes are probably the one segment of millionaires who do earn 7-figure salaries through payroll and are W-2 employees. Entrepreneurs like Musk or traders like Warren Buffet may have nominal salaries through their companies but the vast majority of their wealth is in unrealized equity, money which doesn't really exist until their shares are sold, which triggers a capital gains tax. Equity gives them something to secure loans against so they can game the system that way, but it's money that only exists on paper. It's not like they get a $750 million payroll checks every two weeks. It's hard to tax money that's not physically real, and they'll always find ways to lower their tax burdens, as we all try to do every April when we file our own.

I wonder if JT paid this income tax in the US if he was given the bonus while living in NY. If he didn't pay it in the US, and he isn't paying it in Canada, he's just trying to avoid paying it.

I'm sure Tavares would be a lot happier to contribute his tax dollars if they enriched his life, or if he actually had confidence that his tax dollars were helping the Canadian state function. An ArriveCan scandal isn't really a big deal, just a drop in the bucket really and governments are run by fallible humans, it's that we're taxing ourselves into the ground and yet have failing healthcare systems, a military in absolute shambles, rising crime and falling public trust, and as a nation we spend hundreds of millions of dollars on evangelizing feminism in the Middle East. Or pouring tens of billions annually into Indigenous projects that somehow accomplish very little to improve the lives of our Indigenous people.

Taxes are essential for the functioning of a state. We need roads, public education, Canadians are (or were) proud of public health care, and societal safety nets. A military to protect our domestic sovereignty and to project power abroad (soft power needs to be backed up by hard power). Plus some more to handle the various bureaucracies that help a nation of tens of millions function with a semblance of smoothness. All that costs money and people need to pony up, which the rich overwhelmingly do, but people also deserve to get good results from their taxes.

The rhetoric about "the rich need to pay their share" is deeply, deeply toxic, because the simple fact is that they contribute massively, and that their dollars do actually entitle them to some expectations that their money is being spent properly. Canada has been drunk on tax and spend for years and years now, and what are we actually getting for it?

Squeezing millionaires and billionaires for more money would be virtuous if the nation was starving, or the nation faced an existential threat of an enemy. But we don't have that, we just have a lot of people with their hands out. Canada must have the courage to ask itself what value it is providing to its citizens for their money, and remember that the rich are entitled to a fair social contract like the rest of us.

That's not how it works. We don't get a say in how our taxes are spent. Not directly anyway. Not liking how the government functions doesn't make it okay to not pay taxes.

Perhaps having some assistance helps BUT statistically top 10% pay 54.4%, top 20%, 61.4% of Canadians taxes.

In the U.S. it’s even higher with The top 10 percent of income earners pay more than 60 percent of all federal taxes and 76 percent of income taxes.

Shouldn't the people making 90% of the wealth be paying 90% of the taxes? Seems fair to me.

 

[Soundwave]

Perhaps having some assistance helps BUT statistically top 10% pay 54.4%, top 20%, 61.4% of Canadians taxes.

In the U.S. it’s even higher with The top 10 percent of income earners pay more than 60 percent of all federal taxes and 76 percent of income taxes.

Pretty much exactly that, without the top earners, neither the US or Canada would have anywhere near the quality of life that their average citizens enjoy. It's subsidized largely by high income earners.

That's why it's stupid to demonize those people and tempt them to go elsewhere. They create jobs as well.

 

[Soundwave]

I wonder if JT paid this income tax in the US if he was given the bonus while living in NY. If he didn't pay it in the US, and he isn't paying it in Canada, he's just trying to avoid paying it.


That's not how it works. We don't get a say in how our taxes are spent. Not directly anyway. Not liking how the government functions doesn't make it okay to not pay taxes.


Shouldn't the people making 90% of the wealth be paying 90% of the taxes? Seems fair to me.

And why would a person of considerable means want to stay in a country where they are taxed out the ass?

Especially Canada where you have the option of just going to the US especially if you have the means to do so.

So those people leave and then good luck with that 1 trillion/year government spending that needs to be paid (at least a big portion of it unless you want to run a monster deficet with huge interest payments).

Getting like 10% of your population to pay for the majority of social services that everyone gets to enjoy is already a pretty sweet deal, you start pushing beyond that and you'll shoot yourself in the foot with an exodus of high income people leaving. And then middle class people have to bear the burden of the tax cost, so who exactly is left happy?

 

[belair]

f*** the CRA

Thank you for holding. Your call is important to us.

 

[Three On Zero]

f*** the CRA

After a reassessment I was issued, I feel the same way they want me to pay $7,500.

 

[Perfect_Drug]

Unfortunately Tavares is in the right.


I'm in the reverse situation. I'm a Canadian working for a US company being paid into my US account.


I'm taxed on the Canadian side, due to my residency not the US side.

As long as Tavares spends 6 months of the year (183 days) in the US (including all of the time he spends on the road), he can still claim US residency. There is a tax treaty that prevents Canada from going after that money.

 

[Frank Drebin]

Fair share of what?

taxes

 

[McGarnagle]

They can, but the fear mongering that these companies are going to move out their HQ's out of country is just that - fear mongering. It's not the same as laying off your grunt workers and opening up a new factory in the 3rd world, where you can pay your new staff a nickel an hour. If you move your HQ, you have to move it somewhere that your management will move to - and then pay for them to move - or lay them all off and try to find a new crew of managers in another region. And depending on what region that is in, it might be really hard (and expensive) to find the people with the right skills. It isn't as easy as you are suggesting for companies to relocate their entire operations outside of North America.


Aren't capital gains taxes relatively small though? 15% of a $50M sale might seem like a lot, but it's a drop in the bucket to the billiionare paying it.

If you make $80K a year filing single, put 5% into your 401K, and take the standard deduction, your federal tax burden for the year is 22% of $61,400 or $13,508. The long term capital gains rate that would be triggered by a multi-million dollar sale is 20%. Selling $50M of gains in stock brings a federal tax bill of $10 million, which is 740 times greater than what the employee making $80K contributed while only earning 625 times greater in income.

I'm not trying to carry water for billionaires, but the narrative of how they need to pay a "fair share" doesn't mathematically work in my estimation.

 

[Golden_Jet]

Unfortunately Tavares is in the right.


I'm in the reverse situation. I'm a Canadian working for a US company being paid into my US account.


I'm taxed on the Canadian side, due to my residency not the US side.

As long as Tavares spends 6 months of the year (183 days) in the US (including all of the time he spends on the road), he can still claim US residency. There is a tax treaty that prevents Canada from going after that money.

He probably didn’t get the 183 days, assuming he went home when season ended in April, like he usually did. He definitely wouldn’t have been living in Long Island on July 1.

 

[Habby4Life]

Unfortunately Tavares is in the right.


I'm in the reverse situation. I'm a Canadian working for a US company being paid into my US account.


I'm taxed on the Canadian side, due to my residency not the US side.

As long as Tavares spends 6 months of the year (183 days) in the US (including all of the time he spends on the road), he can still claim US residency. There is a tax treaty that prevents Canada from going after that money.

Well, apparently he was deemed not to be.

JT pay your taxes!

 

[LeafGrief]

That's not how it works. We don't get a say in how our taxes are spent. Not directly anyway. Not liking how the government functions doesn't make it okay to not pay taxes.

Yes, I know. The bolded was mostly tongue in cheek, to serve as a tie-in from the topic of Tavares to the morality of tax discussion that this thread actually is.