I benefit from Canada's favourable option plan, but it is still bullshit. These tax loopholes are how a VP of Marketing at an obviously going-to-be-successful company like Shopify makes $1m / year while only paying half the top marginal tax rate.

Even more if they are clever. I'm not sure if they've closed the loophole but you used to be able to max out their TFSA by exercising their options, claiming the share certificates, then putting them into their brokerage account before the Series A is closed. It only costs $500 / year at RBC to do this you / your family just can't ever own 10% of the stock in question and it is completely legal. Then when your $40k of shares grows to $4m after the IPO you have a perpetual tax free investment account.

But these tricks are nothing new. Businesses have all the flexibility in the tax code. The only year I was in the 1% in terms of income I paid an effective tax rate of 12%, and this wasn't because I qualified for the capital gains exemption tax when my business was acquired (the business wasn't was too young, your business needs to be at least 2 years old to qualify).

Investment income should be taxed the same as normal income with one caveat: losses should decrease normal income and should be _after_ inflation. Right now the biggest pushback I hear (that I think is legitimate) to raising the capital gains / dividends rate is about inflation; which makes sense for 4% blue chip bonds, but falls apart on 40% yoy options that are more like deferred income plans than they are investment schemes.

Edit: Downvote me all you want. People disagree with things that challenge situations that are good for them.