Navigating Factor Investing and Listener Engagement

Today, we sit down with Professor Kevin Milligan to unpack the recent capital gain changes and the complexities of the Canadian tax system. Kevin Milligan is a Professor of Economics at the Vancouver School of Economics, University of British Columbia. He holds positions as a Scholar-in-Residence at the C.D. Howe Institute and a Research Associate at the National Bureau of Economic Research. A two-time recipient of the Purvis Prize, Professor Milligan’s work is recognized for its significant contributions to Canadian economic policy. His research focuses on public and labour economics, particularly concerning the economics of children and the elderly, along with tax and labour market policy issues. In our conversation, we dive deep into capital gains tax, the progressivity of the tax system, and the distribution of tax burdens among different income groups. We explore the intricate details of who bears the burden of corporate taxes, the impact of recent capital gains changes, and the intriguing relationship between income and longevity in Canada. Professor Milligan also shares insights from his research on longevity and the implications of tax policies on economic behaviour. Join us and uncover the truths about Canada's tax system, capital gains changes, and their profound impacts on Canadians. Tune in now!

Key Points From This Episode:

(0:07:20) Background about Professor Milligan and an outline of today’s topic.

(0:10:10) Complexities behind tax policy and recent capital gains changes in Canada.

(0:14:22) Distribution of tax rates in Canada and how progressive the tax system is.

(0:20:12) Analysis of how the Canadian tax system is applied to the top 1% of earners.

(0:22:28) The theory behind capital income and how it relates to personal income tax.

(0:26:40) Explanation of tax integration and how income tax accounts for corporate taxes.

(0:29:53) Impact of the capital gains tax changes and Canada’s overall tax progressivity.

(0:40:55) How the new capital gains inclusion rate affects integration for incorporated business.

(0:46:32) The interplay between corporate investment, capital taxation, and productivity.

(0:54:11) Historical changes in tax rates and the shift of average tax rates over time.

(0:57:14) His perspective on the increase of the capital gains inclusion rate in Canada.

(0:58:35) Explore the correlation between income levels and longevity in Canada. 

(1:03:30) Geographic longevity differences and policy implications for longevity.

(1:07:55) Implications of longevity trends on personal financial planning.

(1:13:24) Takeaways from a past episode, an update on Mark’s book, and more. 

Links From Today’s Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p 

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on TikTok — www.tiktok.com/@rationalreminder 

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP

Professor Kevin Milligan — https://sites.google.com/view/kevin-milligan/home

Professor Kevin Milligan on X — https://x.com/kevinmilligan

The Vancouver School of Economics — https://economics.ubc.ca/

C.D. Howe Institute — https://www.cdhowe.org/

National Bureau of Economic Research — https://www.nber.org/

Canadian Tax Journal — https://www.ctf.ca/EN/EN/Publications/CTJ.aspx

Episode 316: Andrew Chen — https://rationalreminder.ca/podcast/316

Papers From Today’s Episode: 

‘How Progressive is the Canadian Personal Income Tax? A Buffett Curve Analysis’ — https://utpjournals.press/doi/10.3138/cpp.2021-087

‘The Evolution of Longevity: Evidence from Canada’ — https://onlinelibrary.wiley.com/doi/10.1111/caje.12497