The other day @paulsantori commented on a post of mine talking about taxes and it got me thinking....How many times do we actually get taxed on the same money? I earn income → pay income tax. I buy a house → pay property tax every year. I buy something → pay sales tax. I take my family out for a meal -> more taxes I invest → potentially pay tax on dividends, interest or capital gains. I drive → pay taxes built into fuel. Buy a new car = taxed, buy a luxury car = taxed even more. It feels like the same dollar gets taxed over and over as it moves through the economy. Obviously, taxes pay for the services and infrastructure we all use. I’m not arguing that taxes shouldn’t exist. But it’s still pretty crazy when you stop and think about just how much of your income never actually makes it into your pocket or stays there.... Earn it. Taxed. Own it. Taxed. Spend it. Taxed. And then we wonder why building wealth takes so long. Rip to all those Etfs that I could've bought instead lol
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60 Comments
Lisa @retired · 1d
This is where RRSPs get really interesting. We love talking about the tax deduction when we contribute, but we sometimes forget that an RRSP is tax-deferred, not tax-free. Eventually, withdrawals are fully taxable as income. Then you reach the RRIF stage and there are mandatory minimum withdrawals. You may not even need the money, but the government requires you to take it, and that withdrawal can increase your taxable income. And then there’s the estate issue. Generally, when you die, the remaining RRSP/RRIF balance is included in your income on your final tax return. That can create a pretty significant tax bill for the estate. So you contribute → get a tax deduction → invest and grow → pay tax when you withdraw → potentially face forced withdrawals → and potentially have a large tax liability at death. That doesn’t mean RRSPs are bad. Far from it. They can be incredibly powerful when used strategically. But I think the bigger lesson is exactly what you’re getting at: Building wealth isn’t just about making money. It’s about understanding how much of that money you ultimately get to keep. And yes… every dollar that goes to tax is another ETF we could have bought. 😂
Kyle T@kyletfreedom58 · 1d
How about paying taxes when you buy an old car that's been through several owners who ALL paid taxes when buying the 🚗? 🤔🤦🤷
Atlas @helios · 1d
That’s why the TFSA is one of the strongest wealth building mechanisms out there. I mean, you’d still get taxed at some point, but the tax-free growth and the zero capital gain tax are great assets for any Canadian.
Catherine D@cat777 · 1d
You could live in Alberta and pay for a public heath system/infrastructure and need surgery with long wait times so your offered to pay out of pocket for “private” care to the same doctor in the public system who uses the hospitals/equipment you contributed to through your taxes. 🤯 We are all taxed so much, however insult to injury is to not have the services your taxes are supposedly funding.
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