Critics Warn Ottawa S New Luxury Tax On Expensive Cars Planes And Boats Could Fail

Starting Thursday, luxury cars and personal jets with retail prices above $100,000 and personal watercraft priced above $250,000 will be subject to a 10 to 20 percent tax. The measure received final approval last June and is expected to raise $163 million in new revenue annually. Deputy Prime Minister and Finance Minister Chrystia Freeland defended the tax Wednesday on the eve of its release after touring a transportation facility in Calgary. He cited the significant amounts Ottawa has spent “to keep Canadians healthy and safe and to keep the economy running” during the COVID-19 pandemic before specifically mentioning the new tax. Finance Minister and Deputy Premier Chrystia Freeland defended the luxury tax during a tour of Alberta on Wednesday. (Bill Graveland/The Canadian Press) “I think it makes perfect sense 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 have to pay a 10 percent tax to help everybody else,’” said Freeland during a press conference following her tour. “I think it’s great for Canadians to be successful. It’s great for Canadians to be prosperous. I also think that people who are doing very, very well should feel comfortable supporting everyone else.”

Businesses Ask: Why Not RVs?

Mark Delaney is director of sales and marketing for a Vernon, BC, company that builds boats up to $500,000. He said the tax would undermine the boom in boat sales that began when people were stuck at home during the COVID-19 lockdown. Delaney said the tax comes at a time when inflation is driving up the cost of boat parts. He warned the measure would hurt tourism businesses and could make shoppers, many of whom are business owners themselves, think twice about buying. WATCHES | Critics fear new luxury tax could cost jobs:

Ottawa’s new luxury tax is more trouble than it’s worth, critics say

Starting this week, if you buy an expensive boat, plane or car in Canada, the federal government says you can afford to pay more. But critics of the levy say it could hurt the economy while offering little benefit. “They feel like they’ve paid more than their fair share in payroll taxes and everything else they do in their businesses every day,” Delaney said. “And so getting hit … with this tax certainly doesn’t put us on very good terms with the customer.” Both Delaney and Pat Sturgeon, who sells sailboats costing up to $700,000 in Mississauga, said it’s unfair that other expensive items — like RVs — aren’t also hit with the tax. “Many of my clients are not necessarily wealthy clients. In fact, most of them are ordinary people trying to fulfill a dream,” Sturgeon said. “The only thing I’m hoping is that the government will find that this tax isn’t working, it’s not generating more revenue, it’s actually costing them more money, that they’ll end up cleaning it up.”

Tax a ‘loaded approach’: economist

Don Drummond, a former federal deputy undersecretary for fiscal policy and former chief economist at TD Bank, said the tax could create “cottage industries” around people trying to get around it.
“Whatever you define as the threshold for a boat or anything that’s a luxury good, somebody’s going to do something to get over it,” Drummond said. “This is a waste of consumers’ time. And it’s a waste of tax officials’ time.” Don Drummond is a former deputy assistant secretary for fiscal policy for the federal government. (Jovan Matic/CP) The luxury tax will be a hard sell, he said, because — unlike the tobacco tax — it’s not aimed at improving health outcomes. And mechanisms already exist to tax the rich, Drummond added. “It’s not that these items are particularly dangerous to individuals or society,” he said of the high prices of boats, cars and aircraft. “The marginal tax rate for higher earners is already over 50 percent. If you wanted 60 or 70 percent, this would be the way to do it. “But [the luxury tax] it is a loaded approach. It’s not just saying, “We want the beneficiaries to pay more taxes.” We’re saying we want them to pay more tax on very specific things, not even all luxury items.”

title: “Critics Warn Ottawa S New Luxury Tax On Expensive Cars Planes And Boats Could Fail Klmat” ShowToc: true date: “2022-11-07” author: “Sam Gaddy”

Starting Thursday, luxury cars and personal jets with retail prices above $100,000 and personal watercraft priced above $250,000 will be subject to a 10 to 20 percent tax. The measure received final approval last June and is expected to raise $163 million in new revenue annually. Deputy Prime Minister and Finance Minister Chrystia Freeland defended the tax Wednesday on the eve of its release after touring a transportation facility in Calgary. He cited the significant amounts Ottawa has spent “to keep Canadians healthy and safe and to keep the economy running” during the COVID-19 pandemic before specifically mentioning the new tax. Finance Minister and Deputy Premier Chrystia Freeland defended the luxury tax during a tour of Alberta on Wednesday. (Bill Graveland/The Canadian Press) “I think it makes perfect sense 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 have to pay a 10 percent tax to help everybody else,’” said Freeland during a press conference following her tour. “I think it’s great for Canadians to be successful. It’s great for Canadians to be prosperous. I also think that people who are doing very, very well should feel comfortable supporting everyone else.”

Businesses Ask: Why Not RVs?

Mark Delaney is director of sales and marketing for a Vernon, BC, company that builds boats up to $500,000. He said the tax would undermine the boom in boat sales that began when people were stuck at home during the COVID-19 lockdown. Delaney said the tax comes at a time when inflation is driving up the cost of boat parts. He warned the measure would hurt tourism businesses and could make shoppers, many of whom are business owners themselves, think twice about buying. WATCHES | Critics fear new luxury tax could cost jobs:

Ottawa’s new luxury tax is more trouble than it’s worth, critics say

Starting this week, if you buy an expensive boat, plane or car in Canada, the federal government says you can afford to pay more. But critics of the levy say it could hurt the economy while offering little benefit. “They feel like they’ve paid more than their fair share in payroll taxes and everything else they do in their businesses every day,” Delaney said. “And so getting hit … with this tax certainly doesn’t put us on very good terms with the customer.” Both Delaney and Pat Sturgeon, who sells sailboats costing up to $700,000 in Mississauga, said it’s unfair that other expensive items — like RVs — aren’t also hit with the tax. “Many of my clients are not necessarily wealthy clients. In fact, most of them are ordinary people trying to fulfill a dream,” Sturgeon said. “The only thing I’m hoping is that the government will find that this tax isn’t working, it’s not generating more revenue, it’s actually costing them more money, that they’ll end up cleaning it up.”

Tax a ‘loaded approach’: economist

Don Drummond, a former federal deputy undersecretary for fiscal policy and former chief economist at TD Bank, said the tax could create “cottage industries” around people trying to get around it.
“Whatever you define as the threshold for a boat or anything that’s a luxury good, somebody’s going to do something to get over it,” Drummond said. “This is a waste of consumers’ time. And it’s a waste of tax officials’ time.” Don Drummond is a former deputy assistant secretary for fiscal policy for the federal government. (Jovan Matic/CP) The luxury tax will be a hard sell, he said, because — unlike the tobacco tax — it’s not aimed at improving health outcomes. And mechanisms already exist to tax the rich, Drummond added. “It’s not that these items are particularly dangerous to individuals or society,” he said of the high prices of boats, cars and aircraft. “The marginal tax rate for higher earners is already over 50 percent. If you wanted 60 or 70 percent, this would be the way to do it. “But [the luxury tax] it is a loaded approach. It’s not just saying, “We want the beneficiaries to pay more taxes.” We’re saying we want them to pay more tax on very specific things, not even all luxury items.”

title: “Critics Warn Ottawa S New Luxury Tax On Expensive Cars Planes And Boats Could Fail Klmat” ShowToc: true date: “2022-10-21” author: “Ralph West”

Starting Thursday, luxury cars and personal jets with retail prices above $100,000 and personal watercraft priced above $250,000 will be subject to a 10 to 20 percent tax. The measure received final approval last June and is expected to raise $163 million in new revenue annually. Deputy Prime Minister and Finance Minister Chrystia Freeland defended the tax Wednesday on the eve of its release after touring a transportation facility in Calgary. He cited the significant amounts Ottawa has spent “to keep Canadians healthy and safe and to keep the economy running” during the COVID-19 pandemic before specifically mentioning the new tax. Finance Minister and Deputy Premier Chrystia Freeland defended the luxury tax during a tour of Alberta on Wednesday. (Bill Graveland/The Canadian Press) “I think it makes perfect sense 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 have to pay a 10 percent tax to help everybody else,’” said Freeland during a press conference following her tour. “I think it’s great for Canadians to be successful. It’s great for Canadians to be prosperous. I also think that people who are doing very, very well should feel comfortable supporting everyone else.”

Businesses Ask: Why Not RVs?

Mark Delaney is director of sales and marketing for a Vernon, BC, company that builds boats up to $500,000. He said the tax would undermine the boom in boat sales that began when people were stuck at home during the COVID-19 lockdown. Delaney said the tax comes at a time when inflation is driving up the cost of boat parts. He warned the measure would hurt tourism businesses and could make shoppers, many of whom are business owners themselves, think twice about buying. WATCHES | Critics fear new luxury tax could cost jobs:

Ottawa’s new luxury tax is more trouble than it’s worth, critics say

Starting this week, if you buy an expensive boat, plane or car in Canada, the federal government says you can afford to pay more. But critics of the levy say it could hurt the economy while offering little benefit. “They feel like they’ve paid more than their fair share in payroll taxes and everything else they do in their businesses every day,” Delaney said. “And so getting hit … with this tax certainly doesn’t put us on very good terms with the customer.” Both Delaney and Pat Sturgeon, who sells sailboats costing up to $700,000 in Mississauga, said it’s unfair that other expensive items — like RVs — aren’t also hit with the tax. “Many of my clients are not necessarily wealthy clients. In fact, most of them are ordinary people trying to fulfill a dream,” Sturgeon said. “The only thing I’m hoping is that the government will find that this tax isn’t working, it’s not generating more revenue, it’s actually costing them more money, that they’ll end up cleaning it up.”

Tax a ‘loaded approach’: economist

Don Drummond, a former federal deputy undersecretary for fiscal policy and former chief economist at TD Bank, said the tax could create “cottage industries” around people trying to get around it.
“Whatever you define as the threshold for a boat or anything that’s a luxury good, somebody’s going to do something to get over it,” Drummond said. “This is a waste of consumers’ time. And it’s a waste of tax officials’ time.” Don Drummond is a former deputy assistant secretary for fiscal policy for the federal government. (Jovan Matic/CP) The luxury tax will be a hard sell, he said, because — unlike the tobacco tax — it’s not aimed at improving health outcomes. And mechanisms already exist to tax the rich, Drummond added. “It’s not that these items are particularly dangerous to individuals or society,” he said of the high prices of boats, cars and aircraft. “The marginal tax rate for higher earners is already over 50 percent. If you wanted 60 or 70 percent, this would be the way to do it. “But [the luxury tax] it is a loaded approach. It’s not just saying, “We want the beneficiaries to pay more taxes.” We’re saying we want them to pay more tax on very specific things, not even all luxury items.”

title: “Critics Warn Ottawa S New Luxury Tax On Expensive Cars Planes And Boats Could Fail Klmat” ShowToc: true date: “2022-12-18” author: “Mary Webb”

Starting Thursday, luxury cars and personal jets with retail prices above $100,000 and personal watercraft priced above $250,000 will be subject to a 10 to 20 percent tax. The measure received final approval last June and is expected to raise $163 million in new revenue annually. Deputy Prime Minister and Finance Minister Chrystia Freeland defended the tax Wednesday on the eve of its release after touring a transportation facility in Calgary. He cited the significant amounts Ottawa has spent “to keep Canadians healthy and safe and to keep the economy running” during the COVID-19 pandemic before specifically mentioning the new tax. Finance Minister and Deputy Premier Chrystia Freeland defended the luxury tax during a tour of Alberta on Wednesday. (Bill Graveland/The Canadian Press) “I think it makes perfect sense 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 have to pay a 10 percent tax to help everybody else,’” said Freeland during a press conference following her tour. “I think it’s great for Canadians to be successful. It’s great for Canadians to be prosperous. I also think that people who are doing very, very well should feel comfortable supporting everyone else.”

Businesses Ask: Why Not RVs?

Mark Delaney is director of sales and marketing for a Vernon, BC, company that builds boats up to $500,000. He said the tax would undermine the boom in boat sales that began when people were stuck at home during the COVID-19 lockdown. Delaney said the tax comes at a time when inflation is driving up the cost of boat parts. He warned the measure would hurt tourism businesses and could make shoppers, many of whom are business owners themselves, think twice about buying. WATCHES | Critics fear new luxury tax could cost jobs:

Ottawa’s new luxury tax is more trouble than it’s worth, critics say

Starting this week, if you buy an expensive boat, plane or car in Canada, the federal government says you can afford to pay more. But critics of the levy say it could hurt the economy while offering little benefit. “They feel like they’ve paid more than their fair share in payroll taxes and everything else they do in their businesses every day,” Delaney said. “And so getting hit … with this tax certainly doesn’t put us on very good terms with the customer.” Both Delaney and Pat Sturgeon, who sells sailboats costing up to $700,000 in Mississauga, said it’s unfair that other expensive items — like RVs — aren’t also hit with the tax. “Many of my clients are not necessarily wealthy clients. In fact, most of them are ordinary people trying to fulfill a dream,” Sturgeon said. “The only thing I’m hoping is that the government will find that this tax isn’t working, it’s not generating more revenue, it’s actually costing them more money, that they’ll end up cleaning it up.”

Tax a ‘loaded approach’: economist

Don Drummond, a former federal deputy undersecretary for fiscal policy and former chief economist at TD Bank, said the tax could create “cottage industries” around people trying to get around it.
“Whatever you define as the threshold for a boat or anything that’s a luxury good, somebody’s going to do something to get over it,” Drummond said. “This is a waste of consumers’ time. And it’s a waste of tax officials’ time.” Don Drummond is a former deputy assistant secretary for fiscal policy for the federal government. (Jovan Matic/CP) The luxury tax will be a hard sell, he said, because — unlike the tobacco tax — it’s not aimed at improving health outcomes. And mechanisms already exist to tax the rich, Drummond added. “It’s not that these items are particularly dangerous to individuals or society,” he said of the high prices of boats, cars and aircraft. “The marginal tax rate for higher earners is already over 50 percent. If you wanted 60 or 70 percent, this would be the way to do it. “But [the luxury tax] it is a loaded approach. It’s not just saying, “We want the beneficiaries to pay more taxes.” We’re saying we want them to pay more tax on very specific things, not even all luxury items.”