By on February 24, 2018

Bentley Continental GT Supersports

After hitting it big with the Fab Four, George Harrison wrote the scathing song Taxman in protest of the British government’s “Super Tax” on high-income earners. At the time, the boys faced a 95 percent tax on their earnings (“There’s one for you, nineteen for me”), and Harrison reportedly did everything he could to offshore his wealth.

Britain’s dismal weather wasn’t the only reason rock musicians fled the country during this period.

In beautiful British Columbia, a mountain- and wine-filled area north of Seattle, the provincial government’s recent budget has some auto dealers steaming mad and worried their customers will hit the road in search of deal. The province’s New Democratic Party government, elected last year, plans to levy a 25 percent tax on the purchase of very high-end vehicles, with lesser models facing a 20-percent markup. However, many dealers wonder where the law of diminishing returns comes into play.

To those unfamiliar with Canadian politics, the NDP is the equivalent of Bernie Sanders. Tax increases and boosted social spending is the party’s bread and butter. In this case, the government claims the extra revenue will go towards increased spending on child care and affordable housing — a popular platform in Vancouver, a city where home prices make San Francisco look low-rent.

The vehicle surtax breaks down like this: models retailing for $125,000 to $149,999 see the provincial sales tax (PST) rise from 10 to 15 percent on April 1st. Cars costing $150,00 or more will see that surcharge rise to 20 percent. Coupled with the 5 percent federal goods and services tax (GST) applied to all things, that means a 20 or 25 percent tax on big-ticket vehicles.

Private sales are also subject to the new PST ceiling.

“My phone has not stopped ringing,” Blair Qualey told CBC. Qualey, president and CEO of the New Car Dealers Association of B.C., said, “Our members who sell in the market are gravely concerned.”

Some 400 dealers and 36,000 employees fall under the association’s purview. While it’s hard to argue against many government-funded social initiatives, dealers don’t see the new taxes panning out. B.C. isn’t a captive market, and its neighboring province, Alberta, only levies a 5 percent tax on vehicle purchases. Sure, Vancouver is overflowing with wealthy people, but having to pay $75,000 in tax on top of the MSRP of a Ferrari or Bentley is no small thing.

Sales of luxury vehicles rose 9 percent in B.C. last year, making up roughly a third of the province’s auto sales. Obviously, a ripe target for lawmakers armed with calculators.

“The automotive sector is incredibly competitive. Where a consumer can go to another jurisdiction to save money, they will,” Qualey said.

At one Vancouver Ferrari-Maserati dealer, general manager Mark Edmonds said he expects would-be buyers will consult their wallets before buying a new vehicle locally.

“It’s a psychological thing for people. [25 percent] is a big number,” he told CBC. “Maybe now they’ll buy a boat instead of a car, or maybe a vacation property. … Then the province will lose out on the sale completely.”

Depending on who you ask, the taxes are either too steep or not high enough. Dealers admit it will be hard for the public to feel sympathetic to the luxury car buyer’s plight — a six-figure car is no one’s idea of a necessity of life. One factor not helping the sympathy is the province’s troubled auto insurer (British Columbians get their coverage from the government) and its projected 1.8 billion-dollar loss this fiscal year.

As more and more British Columbians snap up mega-buck vehicles, the insurer faces an ever-higher number of claims not covered by the owner’s premiums. The province’s budget has to cover any shortfall. If it means avoiding a rate increase, many B.C.ers will sleep just fine knowing well-off drivers are being turned upside down and shaken at the dealer.

That could change if the government doesn’t get the haul it expected.

[Image: Bentley]

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130 Comments on “Tax the Rich (Person’s Car): Luxury Auto Dealers in One Canadian Province Aren’t Happy About Their Customers Getting Soaked...”


  • avatar
    krhodes1

    Surely they are not dumb enough to apply this tax only at the point of sale? I would think it would be no different than sundry taxes on cars in the US, where you (usually) pay where you register the car, not where you buy it. Or at least you have to pay the difference, if any. Then at least you would have to jump through some hoops to register your car in another province, the way people register high-end cars in Montana.

    • 0 avatar
      newenthusiast

      I was going to ask this same thing. In Canada, are GST and charges like this (big ticket items) based on where its purchased or where a buyer lives?

      But also I wanted to ask: Given that tax %, would it make any financial sense to buy one in the US, and import it? At the kind of dollar amounts we’re talking about ($75k ????), would the lower US taxes plus fees still be less than these two sales taxes? Does a US state have the obligation by way of some agreement between the countries to charge neighboring provincial taxes? Or does the estimated tax just get charged upon registration in the home province of the buyer anyway?

      I genuinely don’t know.

    • 0 avatar
      Lou_BC

      If you chose to register your vehicle in another province you then have to have a residence there and a driver’s licence that matches. It isn’t all that hard to check. I knew guys that played that game because auto insurance was cheaper out of Alberta. They eventually got caught.
      If you buy out of province and then register that vehicle in BC you will have to pay the tax upon registration. That was tried by many with ATV’s and assorted off-road vehicles that aren’t street legal. Guys would buy in Alberta to save the tax. That loophole was closed when Dealers became legally required to report any repairs done on unregistered vehicles to check for stolen property or tax evasion.
      Imported vehicles from the USA will get taxed at the border unless they are older than 15 years old (Similar to 25 year exemption in USA)

      It is going to be hard for anyone to circumvent the tax laws.

      • 0 avatar
        ect

        Lou_BC, I wonder how many of these are purchased as executive company-provided cars. Unlike private individuals, corporations can deduct PST for income tax purposes, which will significantly reduce the “bite”.

    • 0 avatar

      If you buy a car in upstate NY, and bring it downstate, DMV hits you for the higher sales taxes downstate…..so you can go upstate to, say, buy an Acura from a dealer who is happy to sell it, not the local downstate hock shop that has ADP stickers on all the cars with “advertising fees”. The state still gets its two pounds of flesh.

    • 0 avatar
      Lorenzo

      Yes, government is dumb enough. Remember the federal luxury tax on yachts? The rich stopped buying them, craftsmen in teak and brass got laid off, companies went bankrupt, and the tax collected was less than before. Wherever there are elected officials, there is total ignorance of economics and market forces.

  • avatar
    28-Cars-Later

    That the power to tax involves the power to destroy … [is] not to be denied.

    Justice John Marshall (USSC)
    McCulloch v. Maryland

    • 0 avatar
      DearS

      The issue is the middle and poorer folks have worked their butts off for 35 years and not gotten the fruits of their labor surplus. The rich are using it to buy Bentleys. As far as I’m concerned they are getting off too easy with a 25% tax, but I agree taxes are often an answer that destroys.

      Abraham Lincoln said:As a result of the war, corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working on the prejudices of the people until all wealth is aggregated in a few hands, and the republic is destroyed.

      • 0 avatar
        highdesertcat

        Canada is a sovereign nation and can tax the hell out of its people if their government so chooses. It’s reasonable to assume that Canadian citizens voted to put those people in office.

        If the people choose not to agree to all that taxation, there are ways to remedy the duress, either by not buying or by getting the hell out of Dodge.

        Remember when so many Brits decided to leave Merry ole England and move to the US? Among them tons of Brit musicians. Big bucks there.

        And there are lots of wealthy Americans who choose to flee the high-taxation states every year and relocate to lower taxation states, among them, mine.

  • avatar
    ernest

    So let me get this straight- BC nationalized car insurance, had their heads handed to them with incorrect calculated loss ratios, and now need to raise additional revenue from somewhere to cover the shortfall?

    You couldn’t make this up if you tried. I’m guessing they thought the evil insurance companies were gouging them, and the local government thought “we can fix this.”

    Which is code for “run screaming the other direction.”

    • 0 avatar
      Alex Mackinnon

      It’s more like the provincial government took big chunks of money out of them as dividends at a time when car repairs were getting more expensive.

      Vancouver has more exotics per capita than any other North American city. Many of which are driven by people with less than 3 years driving experience.

      Hence, stupid crap like this is more common than you would ever think possible. Some rich people have not a lick of common sense. The N symbol means this person just finished with their learners, btw.

      http://dailyhive.com/vancouver/vancouver-n-driver-lamborghini-snow-february-2018

      • 0 avatar
        rpn453

        Meanwhile in Saskatchewan, where our socialized insurance is successful, there’s a guy in my neighborhood who winter drives a beautiful black Lotus Evora on studless Pirellis. Probably only on the really cold days when the roads aren’t a mess.

      • 0 avatar
        MoDo

        Alex – they do that all over Canada. Chinese students buy them, drive them during their University time and then ship them to China (which is allowed at that time) and sell them for way more than they cost here. They get so much for them in fact, that is covers a significant portion (if not all) of their schooling along with the cars original price.

    • 0 avatar
      Add Lightness

      Government Insurance is somewhat inefficient as it has some inefficient employees doing CYA work.
      That is nothing compared to a private insurance job stemming from a leaky dishwasher at a friend’s home I’m seeing go down. Unbelievably inefficient trades making appearances so they can book a site visit over and over but everything will be fine as long as the private insurance adjuster gets hockey tickets.
      Probably $25,000 for what should be a $2,000 job.

      BTW, ICBC is in the red because the Provincial Government raided their reserves to make it look like the prov. books were balanced. $5,000 luxury car bumpers don’t help either.

    • 0 avatar
      Lou_BC

      @ernest
      The previous government turned the public vehicle insurance company (ICBC) into a cash cow and drained it of its reserves. Being pro-business they allowed other insurance companies to offer insurance for all of the low risk coverage. ICBC was on the hook for the typically more expensive collision and injury claims.
      The problem with ICBC was government meddling. The government also made ICBC responsible for vehicle inspections and licencing. The made the government’s fiscal “books” look good since it was one less expenditure on the ledger.

      The same government also struck deals with private companies with infrastructure like new hospitals. The government leased the buildings from private business and would buy the building at the end of the lease. It was a way to “cook the books” to hide debt.

      • 0 avatar
        brandloyalty

        To elaborate on what others said here…
        For many years the BC government has caused the provincial car insurance corporation (ICBC) to charge artificially high premiums. Partly this was to make the optional coverage offered by the private car insurance companies look like a better deal. Partly this was done to cause ICBC surplus income, that was then raided by the government to the tune of hundreds of millions per year.

        Things changed. Repair and medical costs escalated. The government sought electoral advantage by freezing or limiting premium increases. So now ICBC is desperate to reduce costs and incresse income.

        But ICBC does not tax car sales or get the income from car sales taxes. Some would argue that the luxury tax is good because it is a progressive tax.

        • 0 avatar
          Big Al from Oz

          brandloyalty,
          You are correct, it’s not that some would argue, but its a proven fact.

          The best forms of taxation are generally the overt ones, in your face types that will upset those who don’t understand taxation well.

          Taxation on consumption as a form of revenue is the most efficient means of tax collection.

          It seems some of our right leaning people don’t understand taxation, they seem to support covert, hidden taxes, protectionism, subsidies, etc.

          These might not be in the open, but they cost more to manage. Sales taxes, stamp duties, etc are a good example.

          Payroll tax is another poor tax.

          A consumption based tax using income is the fairest tax of all and the easiest, cheapest to manage.

          • 0 avatar
            stingray65

            Big Al – the best forms of taxation depends on who gets to define “best”. From an economics point of view, the best form of taxation is the type that distorts “free” markets the least (i.e. broad based and as low as possible, and on consumption rather than income). From a government point of view the best form of taxation is the type the raises the most revenue and doesn’t piss off voters and campaign contributors (i.e. heavy unavoidable tax on stuff my party’s voters don’t use or buy). From the voters point of view the best form of taxation is the one I don’t pay, but someone else pays so the government can afford to give me free stuff.

            It isn’t the right that is against consumption taxes, its the left because consumption taxes can’t be avoided by the poor so they are not progressive. The right tends to favor low taxes and consumption taxes because income taxes discourage work, and work is a good thing that increases the tax base. The best tax in theory would be an estate tax – let me keep my money when I’m living and you (govt) can have it when I’m dead, but since estate taxes are easy to avoid they aren’t “best” for governments that are looking for reliable sources of revenue – it might encourage them to say to the wealthy “you have lived long enough”.

  • avatar
    Nukester

    In Canada you will pay tax when the vehicle is registered in the province that it will be plated in. There are some exemptions for bringing in a previously owned vehicle when you move into that province. New car sellers will charge you the applicable tax and register the vehicle for you. If you bring a car into Canada the vehicle must be properly “Certified” and you will pay the tax at the boarder (the GST) and the PST when you register. One possible loophole would be for the car to be bought by someone else in another province, resold to you with a lower price (phony of course) and then hopefully be below the big tax grab threshold. Very high ends cars are doomed. I can see the Ferrari and Rolls Royce dealers folding up shop and leaving BC.

    • 0 avatar
      SemiPro

      Not sure if they do this in BC but in New Brunswick they closed that loophole on used cars by calculating the tax on the red book value of the car, not the sale price. Too many people where getting sellers to write receipts for less than what was actually paid for the vehicle.

      • 0 avatar
        Carrera

        Semipro you are exactly correct. I believe Nova Scotia values the used imported cars exactly the same. They don’t care how much the bill of sale is for, they have their own values. If it was gifted from your cousin..etc…oh well.

    • 0 avatar
      brandloyalty

      Ferrari and Rolls dealers will be just fine. Vancouver is awash in people for whom such cars are spare change.

    • 0 avatar
      IHateCars

      Ontario closed this loophole by implementing the UVIP (Used Vehicle Info Package) which must be purchased/provided by the seller for private vehicle sales. I lists, among other things, number of owners and both retail and wholesale values of the vehicle….the province calculates sales tax on the wholesale value when registering. So conceivably, sales tax could be paid many times on a privately sold vehicle that changes hands repeatedly.

  • avatar
    28-Cars-Later

    “a six-figure car is no one’s idea of a necessity of life.”

    How about six figure pickups?

    • 0 avatar
      JohnTaurus

      More than just pickups for personal use, I wonder if this applies to vehicles purchased for buisness use. Say, buying a medium duty F-750 dump truck, bucket truck, etc. Or even a semi truck. These can easily reach the six figure level. Surely they’re not stupid enough to tax them the same way.

    • 0 avatar
      Lou_BC

      @28-Cars-Later –
      A luxury tax was tried years ago in BC but the cap was too low and it covered any vehicle not commercially rated. What happened is everyone stopped buying 1/2 ton and 3/4 pickups and purchased 1 ton trucks since the GVW ratings made them exempt. It wasn’t too long when that tax was repealed.

      The most expensive pickup I can spec in BC right now is around that 100k mark so they’s fall under the 20% threshold. Guys putting 30k worth of brodozer mods at time of purchase will probably hide that expense somewhere else at the point of sale.

  • avatar
    seth1065

    So rich folks in BC will start having a lot of Fla plates , as many folks in NY metro plate their car with Fla plates to save $$, or perhaps Montana where it is pretty easy to setup a shell company and make it a co car. I am sure Canada has their Fal as well where this will happen. It does seem rich folks will find a way and I really can not blame them, BC loses it shirt on auto ins and the say let’s tax the rich to make up for it and if your buying a 6 figure car or truck your rich. It has to stop somewhere.

  • avatar
    Mike-NB

    “To those unfamiliar with Canadian politics, the NDP is the equivalent of Bernie Sanders.”

    True enough, but only is Mr. Sanders moved faaaaaar to the left. I’m not a BC resident, but the newish BC government seems pretty hard left. It’s also helped out by the Green Party, which in Canada isn’t so much as an environment-focused party as it is a further left version of the NDP.

    Where I live, in New Brunswick, on the opposite coast, we’ve had over a decade of mostly hard left governments and we are being choked by our social programs. Huge swaths of the population don’t work simply because they don’t have to. We are the only province in Canada to have a majority of the population living in rural areas (51%) but the country folks have also managed to gerrymander the provincial ridings to give the 49% who live in the cities only about 20% of the seats in the legislature. Those of us in the cities do our duty and send truckloads of social spending cash to the rural areas every month.

    I’m no hardcore capitalist but people need to realize that socialism can run amok too. Here in NB we’re probably close to bankruptcy, or as Margaret Thatcher once put it “The problem with socialism is that you eventually run out of other people’s money.”

    • 0 avatar
      Kendahl

      Bankruptcy sets one limit although the federal government can bypass it by printing more money. The more insidious limit comes from discouraging ambitious people from working hard to achieve their goals. Anyone smart enough to do well is smart enough to recognize when working hard no longer improves their situation.

      • 0 avatar
        probert

        Most of the very wealthy – around 70%, never worked a day in there lives, snd never produced anything other than more money for themselves.

        • 0 avatar
          gtem

          “Most of the very wealthy – around 70%, never worked a day in there lives, snd never produced anything other than more money for themselves.”

          *Source needed.

          Back in circa ’96 when “The Millionaire Next Door” was first written, the statistic was that 80% of millionaires were first generation millionaires. And most did not receive an inheritance or significant support from parents/family. Most had started small businesses.

    • 0 avatar
      SemiPro

      Really? You think these people don’t work because they don’t want to? Did you stop to think maybe they don’t work because all the jobs have dried up? The paper mills and mining operations that have moved to China and South America because of globalization? The shipbuilding industry that was decimated by cheaper options in Asia? The call centers that move after they have finished exploiting any government job creation funding? The efforts to explore new avenues of natural resource revenue that are met with staunch resistance from environmentalists and those claiming to represent native rights? What about all those people who left for greener pastures out west? Seems to me like they want to work but just can’t find anything in this province.

      Socialism has nothing to do with why this province is broke. Is is broke because all the industries it has relied on to create jobs and bring in tax revenue have dried up. Moved to places in the world where it is cheaper to do business. Capitalism and globalization are in fact the cause of this mess. Sure, there have been some successes, such as a thriving IT industry, but you can’t sit on your big city high horse, look around, and say that there are plenty of jobs when only a tiny fraction of the population of the province has any hope of landing those jobs.

      • 0 avatar
        Lou_BC

        @SemiPro – you are incorrect on most counts. BC is resource dependent. That means extracting minerals and hydrocarbons from the ground and harvesting lumber. You can even add fishing to that list. We have always had little in the way of manufacturing.
        Where have all the jobs gone?

        …………..AUTOMATION……………AUTOMATION………………..

        My apologies if that bit makes me sound like an azz but that is why.

        A feller/buncher, a tree processor, and a few grapple skidders can do the work of a few dozen men.
        A modern sawmill is a wonder of automation. They have the output of dozens of old sawmills that used to employ hundreds of men each.
        An open pit mine can now be run fully automated. They don’t even need drivers or machine operators.

        BC has not fallen prey to cheep foreign labour. We have fallen prey to the “Rise of the Machines”.

        • 0 avatar
          johnnyz

          BC should bring back Malcolm Bricklin, he’s got some great ideas!

        • 0 avatar
          SemiPro

          @LOU_BC – we aren’t talking about BC, we are talking about NB.

          I do agree that automation has taken a lot of jobs but that isn’t what I’m talking about. You would have a case for your position if the mills and mines were still open here, just automated. That isn’t what happened. The mills and mines have moved to locations where the cost of labour is significantly less than it is here.

          Since this is a car site, let’s use a car manufacturing analogy. Do you think GM moves manufacturing to Mexico because of automation or labour cost?

    • 0 avatar
      thelaine

      The left never, ever, ever learns. They just take over like locusts, spread ruin, and move on, always self-righteous, with no memory.

      • 0 avatar
        Big Al from Oz

        thelaine,
        The left?

        Most of those tax dollars are coming from well heeled immigrants.

        Why not.

        Left doesn’t denote anything you don’t like in life. As I stated yesterday many in the US use terms like “Liberal”, “The Left” or “Socialist” as a derogatory term in an attempt to belittle those you don’t have an accord with.

        The reality is this dog eat dog selfish approach doesn’t create a healthy competitive environment.

        The POTUS is a classic example of a person with limited business and leadership skills. All his life he’s treated business poorly, hence maybe why he’s been bankrupt. He’s never worked in an enterprise environment collaboratively. It’s been about him for him. No wonder the US’es Allies are getting a bit bored with him.

        You can’t go it alone, because your type are the first to cry “Where is the Government”.

        I lean to the right, as you can tell my views regarding “Left” leaning counter progressive taxes, ie, those that punish the consumer. A consumption tax is what this is. Consumption taxes are the most efficient and effective means of tax collection.

        We do need to pay taxes, taxes are not just for the poor.

      • 0 avatar
        Lou_BC

        @thelaine – The public needs to stop bickering over LEFT or RIGHT and start focusing on the fact that politicians of both stripes tend to be selfishly corrupt.

        In British Columbia’s case, it was “the right” that f^cked over ICBC all to make itself look fiscally sound while in power.
        That same right leaning government also hid expenditures on infrastructure by contracting out infrastructure construction to private enterprise and then leasing those structures back. In the end will be on the hook for more money that if they bought them outright.
        The dam they started building in the north is going to cost billions more than what was initially budgeted. BC Hydro, the crown corporation responsible for the dam had billions in reserve and that too was siphoned off to make the politicians look good.
        Alberta was in the same boat with the oil market collapse. Decades ago the conservative party set up a trust fund to place oil revenue to use for the future. It was drained by subsequent conservative governments once again to make themselves look fiscally responsible. They did the typical cut taxes on the wealthy and big business and drained the fund to offset those tax cuts.

      • 0 avatar
        thelaine

        Lefties always get indignant when you call out the left. If you are concerned by corrupt politicians, you are wasting your time. People are corrupt. People in power are more corrupt. This has always been the case and has never NOT been the case throughout all of human history.

        Here is a suggestion from America’s founders: give them less power. Devolve power locally. Let individuals be free and responsible. That was the idea of the federalist system, divided government, and individual freedom.

        People on the left have forgotten these truths, have never understood them or simply deny them. They are, at heart, utopians. They ignore history and believe in working toward human and societal perfectibility, which, in practical terms, amounts to nothing more than justifications for more power and control.

        The LEFT wants larger, more powerful government, ever expanding, with no limiting principle an no practical limit beyond financial collapse or revolution. This includes fascists, communists, socialists, “democratic” socialists, Democrats, and not a few Republicans. So yeah, the left.

        Yeah, moving beyond “labels” sounds great, but it is nonsense. Those “labels” are shorthand for deep differences in values and beliefs.

        As for Canada, who cares? We beat them in curling. Their shame is profound. They will not recover from this until they beat us in basketball, which will never happen. This is a stain upon their national honor even more profound than their prime minister’s trip to India. We can walk over there and take anything we want right now. They cannot look us in the eye.

        • 0 avatar
          Lou_BC

          @thelaine

          This whole article and subsequent thread was about taxing luxury vehicles in a province of Canada.

          If your point is: “As for Canada, who cares?”

          They why did you even comment in the first place?

          You are sounding like a troll!

          • 0 avatar
            thelaine

            Lou,

            If it isn’t obvious to you that bragging about a curling victory is a lighthearted troll, I can only observe that lefties have no sense of humor.

          • 0 avatar
            Sub-600

            A Russian who participated in curling was busted for doping. I’ve never tried curling, but c’mon, how hard can it be that you have to use performance enhancing drugs? lol.

          • 0 avatar
            Lou_BC

            @thelaine – hard to tell sometimes as to whether or not someone is kidding. Saying that “Lefties always get indignant when you call out the left.” puts one in a defensive posture. If the tone of your earlier comments were different, then I’d would have seen it as a joke.

            Since you mentioned basketball, a Canadian invented it!

          • 0 avatar
            thelaine

            Curling is always part of a joke, Lou. And what I said about lefties is absolutely true, in my experience. Say the word “leftist” and the lefties indignantly come flying out of the woodwork. They hate being called what they are. They prefer to think of themselves as non-ideological, which is as hilarious as calling curling a “sport.”

          • 0 avatar
            Lou_BC

            @thelaine – “They prefer to think of themselves as non-ideological”

            I’ve never claimed to be “non-ideological”. I prefer an approach that takes the best of conservative and liberal ideologies. That generally means fiscal conservatism along with strong law enforcement but also strong social and health benefits.

            But once again, the way you approach this topic is confrontational and you act as if your position is superior.

          • 0 avatar
            thelaine

            For goodness sake Lou, of course I believe my position is superior! Why would I advocate for a viewpoint I believe to be inferior? I am advocating for personal freedom and responsibility.

            When you talk about how you “…prefer an approach that takes the best of conservative and liberal ideologies. That generally means fiscal conservatism along with strong law enforcement but also strong social and health benefits” you are espousing a typical big-government model.
            This is an ideology of the left. That is not a label. That is a belief system, or “ideology.” You believe it is non-ideological because you think it is just a practical common-sense approach that makes sense to you. Nevertheless, you espousing an ideology that is basically mainstream contemporary moderate European socialism.

            I understand why you object to the left label. It is associated with communism, and fascism, which are also ideas of the left. However, my attacks on “lefties” and their belief systems are not an attack on you personally. You simply choose to see it that way.

            I attack lefties and you respond with indignation, even though I do not attack you personally, since you are a courteous person who does not attack me personally, because you are Canadian, which mandates people not currently playing hockey to be polite. (Fortunately, Canadian law still allows unlimited smugness and passive-aggression.)

            I despise leftism, Lou, because I believe it destroys freedom, personal responsibility, and prosperity. So, I criticize it and highlight the fact that people who espouse leftist ideas are, in fact, leftists, even though they prefer to be called “progressives” or “liberals” or “moderates” or “center-left” or “Christian Democrats” or “no labels” or “non-ideological” or anything but lefties. Still, they are all on the left, and they hate to face that truth.

        • 0 avatar
          IHateCars

          “…We can walk over there and take anything we want right now. They cannot look us in the eye.”

          Lol….bring it!

    • 0 avatar
      Lou_BC

      The NDP or New Democratic Party is left wing. The coalition with the Green Party shifts them even further left. I’m betting that the Green Party suggested this tax.
      Oddly enough, the Liberal Party of BC was the conservative party. They were liberal in name only. BC has always had odd politics. That is probably why we are often called British California.

      @Mike-NB – there needs to be a balance between social and capitalistic policies. Unfortunately the pendulum tends to swing just to the far left or far right without finding equilibrium somewhere in the middle. In Canada we tend to see the parties that stake out that middle ground with the longest political lifespans.

      • 0 avatar
        Big Al from Oz

        Lou,
        I see this tax increase as a means of grabbing some of that money from the wealthy immigrants that have made Vancouver home of late.

        I don’t disagree with it as it will not affect the majority of those living in BC. How many or what portion of the BC population will be affected by this? Less than 10%?

        I have links below to illustrate the rate of high net worth individuals into Canada and most are making Vancouver their home.

        • 0 avatar
          Lou_BC

          Big Al from Oz – I’d say 1% or less since there are 4.631 million people in BC. 1% translates to 46,310 vehicles. I seriously doubt there are that many vehicles over 120k in BC.
          I’m betting,as you have pointed out,this a way to target wealthy immigrants. Those immigrants are driving up the costs of everything in the lower mainland of BC.
          No one is going to shed a tear for a buyer of a 500k Lamborghini.

    • 0 avatar
      gmcd

      Mike, the problem is that the previous right wing govt sucked ICBC dry like a vampire might. They took all the profit from a reasonably well functioning system (not perfect) and used it elsewhere. Ironically the ‘new car dealers association of Bc were big supporters!

    • 0 avatar
      brandloyalty

      BC also has this rural/urban vote gerrymandering. BC also has party politics with first-past-the-post. In the past, this split the left vote between the NDP and Greens, allowing the less popular right wing party (deceptively called the “Liberals”) to hold power. But in the last election people were so displeased with the right wingers that no party got a majority. The NDP and a few Greens made better bedfellows, and struck a functioning but uneasy deal to govern. So far this has not plunged the province into fiscal chaos.

      • 0 avatar
        brandloyalty

        BC also has this rural/urban vote gerrymandering. BC also has party politics with first-past-the-post. In the past, this split the left vote between the NDP and Greens, allowing the less popular right wing party (deceptively called the “Liberals”) to hold power. But in the last election people were so displeased with the right wingers that no party got a majority. The NDP and a few Greens made better bedfellows, and struck a functioning but uneasy deal to govern. So far this has not plunged the province into fiscal chaos.

    • 0 avatar
      RedRocket

      New Brunswick has never had a hard-left govt. They have had historically incompetent and corrupt govts for a couple of decades. Running up the debt, rampant patronage, inept decisions galore. But your point about looming bankruptcy is correct.

    • 0 avatar
      bunkie

      “The problem with socialism is that you eventually run out of other people’s money.”

      The problem with this quote is that new money is being created all the time. It’s called “economic growth”. The real question/issue is “Who is accumulating all this new money?”.

      • 0 avatar
        Arthur Dailey

        @Mike-NB is incorrect. New Brunswick has had only Liberal or Conservative governments. Its longest serving modern Premier Richard Hatfield was a Conservative but led a morally corrupt group that concealed a lot of wrong doing.

        Thatcher made a lot of inane statements and permanently harmed a great many of the UK’s citizens. She was re-elected on the basis of winning a war against a corrupt South American dictatorship (a tautology?).

        New Brunswick and Nova Scotia were 2 of the world’s richest areas prior to Confederation. Since then Ottawa has been trying to buy their votes in return for destroying their initial prosperity.

        As Canada won 11 gold medals and 29 medals overall in the recently completed Olympics and the USA won only 9 gold medals and 23 medals overall, does that mean that we can send the RCMP down into the USA to enforce Canadian firearm legislation?

        And has Norway irrefutably proven the superiority of their social-democratic system by their overwhelming Olympic performance?

  • avatar
    Big Al from Oz

    The luxury car tax doesn’t look that draconian. It is scaled up to $57,700CAD pay 7% PST and incrementally rises as the vehicle cost increases.

    Australia has a luxury car tax on vehicles that cost approximately $75 000AUD and up. This doesn’t mean you pay the tax on the full amount of $75k, just the amount over. So, if you buy a “luxury” car for $80k AUD you will pay the normal 10% GST and the Luxury Car Tax on the $5k AUD.

    So, the better off are contributing more to society and why not.

    At the end of the day if someone in BC has $150k to spend on a car they will spend it, irrespective if the tax.

    • 0 avatar
      28-Cars-Later

      “So, the better off are contributing more to society and why not.”

      This is incredibly naive. In a closed system, this at least makes some sense. We don’t live in a closed system, we live in a system of endless money printing. Any “tax” will always be squandered, any activity gov’t wants will be funded by printed currency. Taxation only serves as a system of control.

      • 0 avatar
        Big Al from Oz

        28-Cars-Later,
        I view this as a human trait. Ever since human’s rose, one of the human traits is to look after the young, sock and old.

        So as a group, we educated, healed and had a social system of welfare.

        In this modern era we do this via governments. Now our tribes have increased from scores to millions. Our system of survival (termed culture) evolved where we elect governments to more or less act on our behalf.

        Our “tribes” consist of a wide variety of paradigms, from the selfish individual to the socially compssionate.

        The selfish individual is as destructive to the tribe as the overly socilly compassionate.

        Where do you fit in? I know where, but its your right to hold your views, even if they retard progess.

        • 0 avatar
          Kendahl

          We’re past the point of caring for the young, sick and elderly. People on welfare live better than the working poor.

          My wife used to drive a school bus. Everyone understood that it was a seasonal job that went away during the summer. At the end of the school year, clerks from the state unemployment office came to the bus company office to help drivers fill out their applications for unemployment benefits. Since they were promised their jobs when school resumed, they were excused from job hunting during summer vacation. Eventually, my wife wanted to spend more time on her other job (musician with the local, semi-pro symphony). The bus company carefully managed her hours so that she wouldn’t lose any of her unemployment benefits. What a racket. It wouldn’t have changed anything for her to turn down the money except for making us poorer. Now that we are doing better, I’m sure we have more than paid the money back in higher than necessary taxes.

          • 0 avatar
            Big Al from Oz

            Kendahl,
            Yes I agree that this occurs. But, it’s up to the Government to clamp down on this.

            We had significant rorting of our Welfare system and over a period of time the Government targeted specific behaviours.

            Now, we have a welfare system I think is fairer. Left leaning groups whine about how strict it is, but in the end to money is channelled to those that need it, not just are able to “get it”.

            Its all about vetting and how its done. First I think a realistic minimum wage is a good starting point to reduce welfare, its worked here and in other countries.

          • 0 avatar
            Lou_BC

            @Kendahl – yes and no. The working poor gets hit when they need to cough up extra money for expensive medications or treatments that fall outside the coverage of socialized medicine.The low income line is just an arbitrary setting. If one sits just over that line, they are literally stuck between a rock and a hard place. Social workers at health facilities are adept at getting special coverage for those people.

        • 0 avatar
          28-Cars-Later

          Humans are tribal creatures, this will never change. This is well understood which is why the West is unfolding the way it has been – tribal conflict is inevitable. I can’t quite pinpoint when, but at some point the US Federal government became the greatest adversary of US citizens. They wield welfare as a weapon, and use it to play the lower class of off the middle. All the while, cui bono? Ask the President.

          My view is if humanity is to survive the planet needs a reboot with six billion fewer inhabitants. Humanity is a virus, and in order to continue to grow we must expand to either underneath the ocean, to space, or both. Neither has occurred or is likely to occur. Mankind through its use of science has interfered with nature and its control of populations, leading to the current situation. Infinite growth is impossible on a planet of finite resources.

          • 0 avatar
            Big Al from Oz

            28-Cars-Later,
            I think it’s the people of the US not willing to change, you see this in the many comments on TTAC. The UK is in a similar boat.

            The more “liberal” societies seems to be progressing at a faster clip and this is supported by HNWI immigration.

            The US was second on the list, but the US has 330 million people. Countries like Australia, New Zealand, Canada even the UAE are more appealing to the “rich”.

            I think the attractiveness that the US once had is slipping. This is sad. But it’s the people who can make the change.

            I mean sitting overseas and watching the reality TV show of a Government in the US is quite unsettling.

            The US was once the best and greatest place to live, but now there is competition there as well as manufacturing.

            The US needs to look from the outside to see what unattractive features have crept into the country.

            The US can be repaired, but it will take restructuring. Like any business it needs to modernise. Even the Church (Protestant mainly) modernised their views.

            People need to read up on history and find out why Britannia lost it’s ability to rule the waves.

            The US now needs to grow up and become a true leader, a mature leader, instead of the tantrums, which sound like “it’s not fair”, like a spoilt brat.

            I personally think you’ll see another movement similar to the 60s in the US to modernise some of the outdated and overly conservatives views held.

            Here’s an interesting article on where High Net Wealth Individuals are moving, and in Canada many are choosing Vancouver, hence this tax. And why not?

            https://www.sbs.com.au/yourlanguage/hindi/en/article/2018/02/05/millionaires-across-world-are-moving-australia-claims-report

            Remember the US has 15 time the people of Australia and 9 times that of Canada, over 60 times that of New Zealand and 30 times that of the UAE and Switzerland.

            And all of these countries pay similar levels of tax as a product of GDP as the US. So taxation does play a role in where the rich are moving.

            https://www.sbs.com.au/yourlanguage/hindi/en/article/2018/02/05/millionaires-across-world-are-moving-australia-claims-report

          • 0 avatar
            Big Al from Oz

            This article contains a information in tabulated form.

            https://www.businessinsider.com.au/high-net-worth-individuals-are-moving-to-australia-2018-1

          • 0 avatar
            Lou_BC

            @28-Cars-Later – you are correct when you say the US government has become the adversary of the people. That is because government caters to the 0.1%. As long as the left and right blames each other or whites blame minorities and vise versa et cetera, the game will continue on.
            I do believe that one reason the military/industrial complex likes keeping people poor and without adequate social programs is because it allows for a steady stream of cannon fodder to feed the war machine. The wealthy and educated can avoid military service but not the poor.

          • 0 avatar
            28-Cars-Later

            I believe things to be both far more complicated and sinister than you describe.

            ” … in politics nothing is accidental. If something happens, be assured it was planned this way. ” – FDR

            @Lou

            Good insight. The game continues on until the music stops. Then…

          • 0 avatar
            brandloyalty

            @28-cars-later

            Your concerns about overpopulation have some validity. But there are nations with better health, lifespans, income and education that use vastly kess resources per capita than the US and Canada. This information is available on the Internet.

            And if you want examples of destructive wasteful practices, you need look no farther than North American transportation systems and infrastructure designed to be dependent on those systems.

        • 0 avatar
          brandloyalty

          @Big Al from Oz
          A shockingly succinct and perceptive take on this aspect of humanity. Thanks.

  • avatar
    Big Al from Oz

    Steph,
    Maybe you could of presented this article in a slightly different light. I know this is a car site and anything that could be construed as “anti-car” is presented negatively, as you have done with this article.

    The majority of people that live in Seattle’s most northern Suburbs pay 7% PST and it rises slowly until it max’es out.

    There are some good table on the BC Government site on how the tax is implemented. Maybe a few of them would help.

  • avatar
    Avenging Angel

    Nobody cries for the rich having to pay more tax on their Lamborghini. Add in the fact the buyers are almost exclusively citizens of Mainland China who come to BC and drive up insurance rates with their crappy driving and expensive to repair toys. The same demographic that have driven up Vancouver’s housing prices to New York levels. Fortunately most of them can’t vote and even fewer would actually bother, it’s a masterstroke for the Left to fund social programs. Here’s a couple news stories that will illustrate why nobody feels sorry for them:

    http://dailyhive.com/vancouver/vancouver-n-driver-lamborghini-snow-february-2018
    http://www.richmond-news.com/news/richmond-owner-of-bond-style-car-files-lawsuit-over-135-000-repair-bill-1.23135428
    http://vancouversun.com/news/local-news/lamborghini-collides-with-fire-hydrant-on-georgia-street

  • avatar
    ernest

    I have long held that the Laws of Unintended Consequences rule the earth. The last time we were up in Bellingham, Wa, we were dumbfounded at the number of new homes under construction. And even more surprised at the size and cost of those homes. On further research, I discovered the source of this Real Estate boom was coming from Canada. Specifically, British Columbia residents fleeing the high cost of RE in the Vancouver area. This makes sense- Bellingham is about 3 hrs. south of Vancouver BC, and about 2 hrs north of Seattle. Washington State has a sales tax, but no income tax, and RE taxes are within reason (saying this from an Oregonians perspective). You can guess where I’m going with this.

    • 0 avatar
      ernest

      *Correction: Bellingham is about an hour south of Vancouver, BC.

      • 0 avatar
        Big Al from Oz

        ernest,
        The next time you are in Bellingham go to the Museum of Radio and Electricity. Awesome little museum. It takes a couple of hours to do.

        Oh, go when the show is on, spectacular. I will not tell you the show. Incredible.

        • 0 avatar
          ernest

          Our son lives on Orcas Island, so we’re up there fairly often. Thanks for the tip!

          • 0 avatar
            Big Al from Oz

            I was on Whidbey Island for the first 4 months of last year at a place called Oak Harbor.

            Near Oak Harbor on the coast you could see Canuckistan, Vancouver Island on the horizon.

            It’s a beautiful part of the world, you could easily live there if the weather was nice. It drizzled and snowed (quite a few times, which was unusual I was told) every day up into April.

            The Cascades is great and I drove to the coast past Port Angeles, down through some impoverished town called Aberdeen, boy, I didn’t realise how poor some areas are in the US. to Portland. The Olympic Mountains are fantastic as well.

            My guys went up to Mt Barker every other weekend to snowboard and ski, mainly snowboarding.

            Great place.

          • 0 avatar
            ernest

            I know the area well. Every year, since the kids were small, we’d go up for a week on either Lopez Island or the Penders, on the Canukistani side. About three years ago the kid found a job offer on Orcas at a resort. He loaded up his motorcycle and moved up. Now he’s the site mgr. It’ll take a bomb to get him out of there. Just as well- gives us a reason to go up there often.

            I look at Mt. Hood off of my deck- we’re East of Portland in the ex-urbs.

  • avatar
    Gardiner Westbound

    The prime beneficiaries of Canadian government services are the legions of unionized Oompa Loompas that provide them. They are saddling us with high cost, substandard services purchased with crushing taxation.

    • 0 avatar
      stingray65

      Are you talking about those public “servants” who can’t be fired for any cause short of murdering innocent women and children in broad daylight (but who are still eligible for their public pension)? Those public “servants” who earn way above private sector equivalent wages and pensions? Those public “servants” who get half the year off for paid holidays, vacations and generous sick leave? Those public “servants” who deal with the incompetence and laziness of their department or agency’s employees by hiring more of them? I just don’t see how such public “servants” could have anything to do with the tax rates.

  • avatar
    conundrum

    The author is Canadian. Presumably he knows you can’t just nip next door to the next province and save on sales taxes. But then again he does live in the GTA, so obliviousness may well reign. You have to pay sales tax in the province you reside. And as pointed out, you have to register in-province within 90 days if you move or “buy” somewhere else.

    We get quite a few oblivious university students from Ontario come down here and who “forget” to register their vehicles. If they have an accident more than 90 days after their first lecture, they’ll both be fined for not registering, and their insurance company from home will wriggle out of paying their claim.

    ICBC worked fine for four decades – the real reasons for its losing money now can be googled, but it’s amazing how many extra whiplashes and soft tissue injuries there are these days with today’s safer cars compared to the rustbuckets of 20 to 30 years ago. Other scams abound. Google it if you really want to know. BC is about as socialist as Washington state, having just come out of a right wing government who disguised their intentions by muslabeling themselves Liberal.

    Judging by the tenor of the article and the all-knowing statements about British weather (I lived there ’69 to ’74), I assume it was penned by a member of Ford Nation 2. They know the truth about everything, innately. Who needs to check facts when things are so blindingly obvious?

  • avatar
    Sub-600

    I’m not sure how much of it’s due to taxation, but Canadians love to come here to shop. There’s a monstrosity here in Syracuse called Destiny U.S.A, a 2.4 million sq. ft. mall with 250 stores and restaurants that attracts so many Canadians that a lounge had to be built for bus drivers. It’s not like we’re on the border either, it’s a few hours to get here by bus, and the lots are packed with full size SUVs bearing Ontario plates. There are other things to do here but it appears there must be a financial incentive involved. Things must be tough if you come to New York to avoid taxes, lol. It used to work the other way, thousands of NYS residents would head to Canada for cheaper prescription medicine.

    • 0 avatar
      stuntmonkey

      > Things must be tough if you come to New York to avoid taxes, lol

      Sometimes yes and sometimes no. It’s often more about the selection, you guys have bigger economies of scale, so your chains tend to carry bigger product lines than ours. It’s hardly ever about saving money, more about a dumb excuse to go for a day trip.

  • avatar
    ernest

    Big Al from Oz-

    a follow up on the link you posted regarding the influx of high net worth people to Australia. I was curious as to 1. Why and 2. Where they came from.

    Why: Education (for family members) and personal safety are the two most frequently stated reasons for emigrating, according to New World Wealth. Others include climate, healthcare and business opportunities. This is especially true for high net worth individuals moving to Australia from China, South Korea and India.

    One of the least important reasons for millionaire migration is taxes (except in France – see below).

    Those emigrating from France cite high taxes and religious tensions as the main reasons for their exit. Recent terror attacks may be a contributing factor to the latter. It’s worth noting that rich people leaving France don’t do so for education and personal safety, the norm for most of the rest of the world.

    In answer to Where did they come from:

    The most frequent loser in 2016 was France, which saw 12,000 wealthy citizens leave it last year. China, with 9,000 emigrants, was next, followed by Brazil at 8,000. Rounding out the top five countries for millionaire decline were India and Turkey, with losses of 6,000 millionaires each.

    In summary: By the end of 2016, 13.6 million high net worth individuals with total accumulated wealth of $69 trillion lived somewhere on the planet. These individuals have a higher flexibility than most to live wherever they wish. Other than the French (who were the largest group of ex-patriots), taxes were not listed as a reason for leaving. Access to Education, Healthcare, Personal Safety, and Business Opportunities were the primary drivers. Looking at the list, they came primarily to Australia, the USA, and Canada.

    Fascinating reading.

    https://www.investopedia.com/managing-wealth/where-millionaires-are-moving/

    • 0 avatar
      Big Al from Oz

      ernest,
      My comment on tax was in relation to the amount of tax paid, not much vs quality of life. There are several reasons why Australia is so popular.

      The quality of life in France can be hard, especially when you look at prices for anything other than food. France’s GDP is 50% tax, whereas the countries I mentioned or that are in the articles are generally half that.

      1. Safety, as you mentioned. We have yet to become as violent as the US, especially for kids. I could imagine the outrage if anyone ever suggested teachers need to be weaponised. What utter BS. Just remove the main problem, and it isn’t the people as the world is full of people.

      2. Standard of living vs bang for your buck. Australia has the 2nd highest standard of living according to HDI data, look at the US with disparity adjustment is down around 25th. All the countries fared well (except the UAE, which is sort down with the US). But the UAE has massive tax incentives for immigration.

      3. Education and health. All but the US have universal health cover. Unlike the US these countries aren’t governed by big Pharma. As for bringing up kid, these countries have more to offer, even discounting the universal health coverage.

      4. Cost of living. The countries are relatively cheap to live in.

      You see the advantages the US had 20-30 years ago with standard and cost of living has narrowed among many nations and fallen behind. Many nations are very similar as the US, except the US needs to look at how and where it spends tax dollars and the influences of major lobbiest on the US economy at the expense of the people.

      As you can see many argue about immigration, social welfare, etc as the scourge of the US, yet all the countries that have around the same levels of tax as a product of GDP have better health, education, welfare, etc.

      Lots of US tax dollars support the auto industry to the tune of over $3 000 per vehicle average. Corn farmers are subsidised, regulated dairy, etc.

      Also, Australia, Switzerland, New Zealand are all considered “free economies”. So, maybe it’s not the size of the country that matters as much as Government meddling in business.

      Protectionism will move the US further down the desirable list as prices increase and reduce the standard of living or at best stagnate the standard of living.

      People, not just in the US, but all around the world blame countries like China and Mexico regarding job losses, when in fact is automation. China alone has lost over 30 million manufacturing jobs in a decade.

      Another issue is taxes must increase, and increase significantly over the next two decades to cover the costs of an ever aging society in the West.

      Who’s going to cover these costs?

      As I mentioned some countries have made moves (which people like “the laine”, 28 cars, etc) to reduce the economic burden down the track. I think Australia and The Netherlands are the only two countries with the best retirement plans. It is compulsory for anyone earning an income to put aside 5% and the employer 5% into private investment funds for retirement. This impacted the cost of doing business in Australia I know for the past 26 years, but now people are spruiking about how smart it was.

      Like life, you gotta put a little aside every paycheck, even countries.

      • 0 avatar
        stingray65

        Big Al:

        “1. Safety…Just remove the main problem, and it isn’t the people as the world is full of people.”

        Unfortunately the statistics don’t support your viewpoint. The main problem is people, so if you want to greatly reduce violent crime you would need to remove blacks (responsible for about half of US violent crime, but 13% of population), Hispanics (responsible for about 1/3 of US violent crime, but 15% of population), Muslims (responsible for most terrorist attacks globally, nearly 100% of rapes in Sweden). The problem is culture and genetics, not guns, because Africa, South/Central America, and the Middle-East are the most violent places in the world, and immigrants from those places bring the violence and crime with them to the West.

        “Who’s going to cover these costs?”

        Anyone who thinks that importing a bunch of low skilled, low education people from “shithole” countries is going to support Western welfare states is crazy. These people don’t contribute to the welfare state, they take from the welfare state (even in the 2nd and 3rd generations), because they can’t/don’t find good paying jobs and they commit crimes in disproportionate numbers (increase police and prison costs), and they often have poor health and poor health habits (increasing medical expenses) . Meanwhile, the rich can and will move where ever they get the best total package – raise taxes too high, or import too many “problem populations”, and they will go elsewhere.

      • 0 avatar
        chuckrs

        Big Al in OZ – In the US it is compulsory for anyone earning an income to put aside 6.35% and the employer 6.35% into government funds. Its called Social Security and because our elected elites get their vote-buying hands on it, the system is almost perpetually in trouble. If the funds were in a sovereign wealth fund, it would be financially healthier, and in private investment vehicles better yet. You could do 5% and 5% that way and take the remaining 1.35% and 1.35% (differing from Oz requirements) as insurance to prevent old age destitution. This was the original purpose of Social Security.
        As a Sub S business owner, I’m simultaneously employer and employee and pay both sides of the contribution. As an old guy, my wife and I collect a SS amount that roughly corresponds to what we’d get from a $500K annuity. I typically paid in the max to SS, my wife paid somewhat less. People generally have no idea how expensive it is to provide for retirement.

        • 0 avatar
          Big Al from Oz

          chuckr,
          The figures I gave don’t include the rouhhly $1 700 a month seniors welfare.

          • 0 avatar
            chuckrs

            Al – that’s OK. The current numbers, not the ones I remembered, are 6.4%/6.4% for Social Security and then also 1.45%/1.45% for Medicare. Total 15.3% which with proper investment ought to provide for a decent but not extravagant retirement with moderate personal savings at your 10% figure plus 5.3% towards medical coverage, total cost of which is going Lord knows where.

          • 0 avatar
            Big Al from Oz

            chuckrs,
            You are correct, but I don’t know how the money in the US is managed.

            From what I’ve read the US Seniors Welfare is going backwards. I don’t know how if you guys are paying so much into it.

            I do know with 401k you guys can retire quite well, comparatively speaking.

            My mother live in NJ and gets less than $1 000 a month, so I don’t know how it works. I do know you need to work 40 quarters and pay into social security to be entitled to the money.

    • 0 avatar
      Big Al from Oz

      ernest,
      I forgot.

      Follow the money trail, trade. People you need in the US not moving in huge numbers (equivelant to Australia dropping from 10k per annum to 750 per annum). Money is currently shifting at an accelerated rate out of Wall St to the EU.

      Even though the US has the second highest intake of HNWI, it’s population dilutes this to an insignificant figure.

      And for the US government to say we only want the HNWI to come is awkward, especially when they are choosing elsewhere.

      • 0 avatar
        ernest

        “Follow the money trail, trade. People you need in the US not moving in huge numbers (equivelant to Australia dropping from 10k per annum to 750 per annum). Money is currently shifting at an accelerated rate out of Wall St to the EU.”

        But the Big Money (which I follow intently) is moving into the US, not out of. The S&P500 dwarfs the currency traders.

        “Even though the US has the second highest intake of HNWI, it’s population dilutes this to an insignificant figure.”

        Two things to remember here. First, the US was founded on a tax revolt. Not by peasants, but by a bunch of rich guys tired of supporting the British Empire. In 300 yrs, not much has changed. Second, we have a long history of suspicion of the various waves of immigrants that have come here. The Italians, the Irish, the Germans (I’m one of them), then the Chinese, the Japanese. More recently Latin Americans, South East Asians and Chinese. Nothing changes on that front. It was as much a political hot button in the 1800’s as it is today.

        Back to my comment about unintended consequences. One of the recent trends we’re watching here is the outflow of population from large metro areas. It’s an interesting trend, because it coincides with another fact that highlights our divisions. The urban, liberal population centers vs. the suburban and rural areas. Priorities and cultural concerns are vastly different, and in the current climate it’s getting very hard to reconcile the two. I view the current situation in DC as a reflection of this division, not necessarily the cause.

        We live in interesting times.

        • 0 avatar
          Big Al from Oz

          ernest,
          I was not talking stocks. The stock market is not the only KPI to illustrate how economies are performing.

          In the very short term I view markets as a good indicator. Many seem to think stock markets are the end all, be all in gauging performance.

          I can understand the weight placed on stock markets as many use the stock market for their income.

          Bonds. In the longer term the yields produced by US bonds are viewed as riskier than some EU bonds and money is shifting across the Atlantic.

          As this article highlights, many have little comprehension regarding taxation and it’s effect on their day to day living.

          Taxation is not an evil, its a necessity to ensure we do have many things we take for granted in our countries that is the difference between us and developing nations.

          • 0 avatar
            ernest

            Ah- I perceive that movement differently. The risk to USD bond holders is that the rockin’ economy will generate inflation and interest rate increases. Great if you’re doing business here, terrible if you’re holding paper. The Eurozone has performed well this past year, but some structural issues (notably real unemployment) should keep growth (and inflation) in check. Euro bonds just climbed out the negative rate returns, so there’s quite a ways to go before worry about inflation kicks in.

            Back to taxation- I still stand by my “unintended consequences” statement. We’ve seen time and time again how government market intervention, be it taxation or by other means, creates the opposite of the intended effect.

            But here is where Americans stand alone- we don’t assume the government will make the best informed decisions, and often identify government intervention as the problem rather than the solution. It’s a significant difference between ourselves and other Western Industrialized nations.

          • 0 avatar
            Big Al from Oz

            ernest,
            The US economy isn’t rockin’ as many suggest. I has improved considerably since the GFC, but is still 25% to 33% below it’s historical average.

            Improvement is still better than regression or recession which will arrive on your door steps in a few years. All that QE money is still floating around and in the markets.

          • 0 avatar
            Big Al from Oz

            The US isn’t the only country that considers the government makes the worst or best decisions and stands alone. Look at many EU nations with the polarisation between the status quo and the fear. People are scared of the future, this drives uncertainty.

            I think the West’s current situation is due to the rise of SE Asian countries (not just China), that are very competitive at what we do. Fear, and fear removes objectiveness to find the best possible outcome, hence Trump, Brexit, Catalonia, etc.

            Historically humans tend to find the easiest to comprehend gerneralised threat, which are immigrants, welfare recipients or “others” that are the root cause of their woes.

            It comes down to the checks and balances protecting the individual that a country uses. I do believe the US lags in this area compared to many other OECD economies.

            Once people lose faith in these checks and balances, then you have the problem arising as we have now.

            That’s why I think the US will “liberalise” itself after Trump. I also do believe a centrist Democrat or GOP candidate will stand up and become President. The extremes that are being played out in politics globally will need to stop for our own success as a Culture.

        • 0 avatar
          28-Cars-Later

          “US economy isn’t rockin’ as many suggest”

          You’re just peddling fiction. /s

          • 0 avatar
            Big Al from Oz

            28-Cars-Later,
            Have a close look at the link below. Go to the “Tables” tab and you will see the US is not rockin’. There are a number of OECD economies out performing the US.

            It’s current rate of growth is around 2.5% in real terms. Hence, lower wage growth.

            Don’t get me wrong the US is pickup and it will decline over the next year as well according to the charts.

            You must stop believing all on Fox News or CNBC.

            https://data.oecd.org/gdp/real-gdp-forecast.htm#indicator-chart

          • 0 avatar
            ernest

            If I adjust the time frame on Oz’s link to 2015-2019, we beat all comers. Slightly ahead of Canada and Germany, more than double the growth rates of Japan and GB. The default setting is 2007-2019. We saw a serious recession, market crash, and ballooning unemployment during that period.

            Big Al from Oz-
            “That’s why I think the US will “liberalise” itself after Trump. I also do believe a centrist Democrat or GOP candidate will stand up and become President. The extremes that are being played out in politics globally will need to stop for our own success as a Culture.”

            Or…. counterpoint, we’ve already hit “Peak Liberal.” Agreed we need a centrist- but he/she won’t be coming from the Democrats. They’ve steered hard left in the past year. We’ll see- I’m not a political peep, but I follow money pretty intently.

          • 0 avatar
            Big Al from Oz

            ernest,
            I don’t know how you are looking at those figures, but real growth, seems to be the best indicator of measurement here.

            If you look at nominal growth, it will vary from country to country as currencies fluctuate. It doesn’t mean the country is doing poorly if a currency devalues by 10%.

            Another thing I forgot to add regarding the money moving across the Atlantic. Currency. Look at currency.

            With the upward pressure on US interest rates one would of assumed a larger increase in the USD value as money should be flowing into the US buying USD’s.

            What holding back the USD valuation is risk of Trump’s plan to accelerate the US indebtedness.

            This is not the best outcome.

            This hasn’t occurred as one would assume, considering this year alone they are predicting several interest rate rises in the US.

            So, where is the money?

            We can also go back as many years as you want regarding economic performance, but I’m looking at the here and now and near future. Go back 30 years and Oz beat most every modern nation.

            The only information of the past that affects now and the future is debt and savings. The US has lots of debt and little savings.

          • 0 avatar
            Big Al from Oz

            ernest,
            It’s been good having the discussion we had.

            I’ll drop it here because the moderators might get a bit shirty over our discussion.

            Oh, I Googled that museum in Bellingham. It’s called “Sparks Museum”. The shows are on weekends.

  • avatar
    brandloyalty

    Funny that the article claims ICBC will be bailed out by the provincial government using funds from the luxury car tax, when in reality the government has been raiding ICBC for far more monry to put into general revenue.

    If claim costs exceed income, is there a law against raising premiums? Had the author bothered for a moment to check what ICBC plans to do about the shortfall, he wouldn’t have had to make the silly connection to the car tax.

    The Truth About Cars. Really.

    Hint: google “2018 icbc premium increase”

  • avatar
    stingray65

    The state insurance agency has a monopoly on car insurance, yet they are losing money in part because of big claims on expensive cars? Only a government agency could achieve such an outcome. Why aren’t those 20 year olds from China with learning permit licenses and $200,000+ Lambo or Roller “school” cars paying car insurance rates at something like 50% of car value per year (i.e. $100,000 annual premium for clean driving record)? Let me guess why they don’t: 1) it would be called racist by leftists, 2) Lambo and Roller dealers are big campaign contributors.

    The problem for expensive car dealers is that if their best customers (rich college students from China) had to pay an unsubsidized amount for their insurance, many would buy a cheaper car instead. That is also the major problem with taxing rich people in general – they have lots of options to avoid paying. Just like the Beatles moved out of the UK to avoid heavy taxation, rich people who want to keep more of their own money can: 1) use a small portion of their wealth to buy politicians and get tax exemptions (hello Clinton Foundation), 2) move their income/wealth and/or themselves to lower tax domiciles (hello Monaco or Florida), 3) hire creative accountants and tax lawyers to shield or hide their taxable income/wealth legally or semi-legally (hello Cayman Islands, “charitable” trusts, and tax-free muni bonds), 4) cut back on income generating work (hello early retirement – why should I bust my balls for Uncle Sam/Johnny Canuck/John Bull?). This is why higher tax rates on the rich almost never generate the income that the bureaucrats are counting on – and of course their solution is almost always to raise rates even higher – “we’ll get those rich bastards this time”.

    • 0 avatar
      Sooke

      Political correctness costs ICBC money too. A male 17 year old pays the same as a female – even though boys are much more likely to have an accident.

    • 0 avatar
      golden2husky

      SR65 (no offense for shortening the name – some here get pissy about that)your examples are why the US needed real tax reform, not a tax cut giveaway. The plans are always written with the major donor families in mind – and both sides of the political spectrum have plenty of them. When the rules are written by those who will profit most (indirectly as well as directly) those rules will benefit those people the most. Always throw a scrap or two to the real people who finance it, you know you want to shear the sheeple, not kill them. Clever beneficiaries will often spin the reward they received to make it look good for the masses, witness some companies “giving” $1000 bonuses and the like after the tax cut went through. Those with critical thinking skills will do some research on that and they will find 4-5% of what Uncle Same gave Big Business made it to those workers. Big wup.

    • 0 avatar
      Lou_BC

      @Stingray – “The state insurance agency has a monopoly on car insurance, yet they are losing money in part because of big claims on expensive cars? Only a government agency could achieve such an outcome.”

      Read all of the comments from Canadians who live in BC or are familiar with the problems with the insurance company. Until you do, you are commenting out of shear ignorance.

      • 0 avatar
        stingray65

        Lou – I did read the comments and “experts” said losses were from expensive claims and government theft of insurance premiums to pay for other government services. Stealing premiums is pretty much standard operating procedure for governments, see US Social Security “trust fund” that is nothing but IOUs as another example. Expensive claim losses is just bad planning, which is something governments are very good at, in large part because they always think they can raise more money by raising taxes – which is what this whole article is about.

        • 0 avatar
          Lou_BC

          @stingray65 – you make it sound like corruption is an exclusively left wing thing.

          As far as rich people not wanting to pay these taxes, that is part of the reason why the BC government went with it. It will target wealthy immigrants and foreign residents off-shoring Chinese wealth into the lower mainland of BC. That off-shoring of wealth has made the lower mainland financially unlivable for middle-class residents. If those wealthy immigrants move elsewhere, it will reduce the cost of living for the middle-class.

  • avatar
    Sub-600

    There’s a $2,350 renunciation fee if you want to become an ex-American, lol. You may also be subject to an expatriation tax for a specified period of time. The laughs continue even after you’re gone. USA! USA!

  • avatar
    Lightspeed

    You can run an economy on money-laundering real-estate for only so long.

    • 0 avatar
      Lou_BC

      @Lightspeed – someone is making money on that and it isn’t the government and it isn’t most of the locals being driven out of the housing market.

    • 0 avatar
      ra_pro

      Sure, except the foreign criminals can easily outlast with their money even governments. So I don’t see BC getting sane again for a long time unless federal governments steps in and tries to get a handle on the enormous money laundering going in major Canadian cities and BC by primarily foreign nationals. However the federal government is doing the exact opposite, it’s going around the world and inviting anybody with money to come to Canada and by extension launder their money.

  • avatar
    TW5

    The public wants more benefits and services; therefore, the government needs more resources. Obviously, the best course of action is to discourage productive people with taxes, and increase deadweight loss in the economy, while simultaneously subsidizing relatively unproductive people with more services and transfer payments.

    What could possibly go wrong?

  • avatar
    Avenging Angel

    Not sure why my first comment didn’t post. Suffice to say nobody in BC is feeling sorry for the millionaire offshore buyers of super luxury cars. The same group drove up housing prices to crazy levels, we might as well wring more money out of them!

  • avatar
    pbx

    Time for a bit of levity?

    Singapore students come to Vancouver for various educational reasons. They ask the parents for money for a car. The parents, being unaware of car costs in Canada say OK but nothing more expensive than a Corolla, or similar. The kids agree.

    The parents send the money, the kids go out and buy a Nissan GT-R or similar. The price of a Corolla, after taxes, in Singapore is $125K USD.

  • avatar
    brandloyalty

    Some who frequent this site will be delighted to know this luxury car tax has ensnared Tesla.


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