Guys, you're dreaming in technicolor! If the elimination of the capital gains tax becomes a conservative platform, the leftist parties are all going to jump on the "rich get richer" platform and the conservatives won't even be elected. Can you imagine Ignatieff or Layton saying "this is a great idea'?

In the US, I believe they have a two tiered system. If you hold a stock long enough for investment purposes (ie dividends) it would have a lower inclusion rate than if you held the stock for a very short time. (I'm not sure about this).

If a plan like this goes forward, it would have to be done with a caveat. Hold for a certain lenght of time. If you have more than a certain trades per year, then you are a day trader and will pay tax on the full income regardless of whether you elect to do so or not. This would discourage penny flippers and reduce the market. I myself have a few core holdings but tend to do trading in and out when I get bored waiting for results to be published (IE drilling permits, etc.) Can you imagine the additional paper work one must keep for CRA? Not to mention the added administration at CRA to try to nail those who try to abuse the system.

The TFSA is a great idea, and its great because the amounts are small in nature, so that it can appeal to those that do not have a great deal of money to invest and not just a few rich individuals. I am in agreement with that.

And for those that say this would encourage commerce when somewone wants to buy larger premises for their business; well, there is something already in place for that, I believe. It's called the "replacement property" rule. If you outgrow your plant and need to buy a bigger one, for example - if your cost long ago was $1mil and now you sell for $2 mil you could defer the tax on your capital gain and your CCA recapture by investing in a plant that costs more than the $2mil within a prescribed time.

So, sorry to rain on everyone's parade (including mine) but in my opinion there will be no tinkering with the tax on capital gains.

Have a great Sunday all

Ismore