Jeff Bezos espousing tax myths hurts people's understanding of the rules CRA applies

I’ve never been to Portugal, but I’ve heard good things: the culture, towns, history, food and wine. My wife and I are planning a trip later this year.

A common reply to that goal is, “Make sure you do a bit of work while you’re there so you can write the trip off.” I laugh along. But I’m also cataloguing in my head yet another instance of a tax myth so embedded in Canadian conversation that otherwise sensible people repeat it without a second thought.

The myth is that if you do a sliver of work on an otherwise personal trip, you can deduct it against your business income. But you cannot deduct personal expenditures against business income. An attempt to do so can earn you a reassessment, interest, possible penalties and — if the Canada Revenue Agency (CRA) concludes the line was deliberately crossed — a possible referral to its criminal investigations program.

I’ve spent decades listening to tax mythology from people at cocktail parties to clients whose brother had a clever idea, but a remarkable new contributor was added this past week: Jeff Bezos , Amazon.com Inc.’s founder. In a recent television interview , the world’s fourth-richest person made two confident claims about tax that, taken together, would not survive a first-year tax course.

Myth one: “There’s no truth to this buy, borrow, die thing.”

The strategy is straightforward. You buy an appreciating asset and hold it because selling triggers capital gains tax. You borrow against the asset and live on the loan proceeds because loans are not income. You die, and in the United States, your heirs inherit the asset at fair market value on the date of death — the so-called step-up in basis rule for U.S. tax purposes.

This strategy is routinely taught in American tax and estate planning circles. Bezos’s rebuttal — “I sell Amazon stock routinely” — is technically true, but misses the point. Yes, he sells some stock and pays tax on those sales, but the vast majority of his appreciation has never been realized, and the unrealized portion held at death gets washed clean by the step-up with no income tax.

The U.S. does impose an estate tax on death, but the planning industry around minimizing it — through trusts, life insurance, lifetime gifting, charitable structures and valuation strategies — is mature, sophisticated and well within reach for anyone with Bezos’s resources.

Canada is a different jurisdiction. We have neither a step-up in basis rule nor an estate tax. Instead, we have a deemed disposition at death: the CRA treats a deceased taxpayer as having sold all capital property at fair market value the moment before death, and the accrued gains are taxed on the terminal return. The third step of buy-borrow-die does not exist here.

Myth two: “The bottom half of earners should pay zero income tax.”

This plays as bold reform , but it is mostly already the case in both the U.S and Canada. The Tax Policy Center estimates that roughly 40 per cent of U.S. households don’t pay any federal income tax in a given year. The Canadian picture is similar , with the bottom 50 per cent of Canadian tax filers — roughly 15.5 million — contributing just five per cent of the total income taxes paid.

The interesting policy question is not whether to do what Bezos proposes — both countries have largely done it — but whether having a large share of the electorate without a direct stake in the cost of federal spending is healthy for a democracy.

Bezos’s tax mythology is the loud, televised variety, performed in a studio with an audience of millions and an army of advisers behind him to ensure nothing he says actually hurts him. But the more common variety is quieter. It happens in coffee shops, airport lounges and dinner-table conversations, and the people who repeat it have no one behind them to clean up the consequences.

This past week, I couldn’t help but overhear two younger people talking at a coffee shop. One was in construction and the other in food service. “I just found out I owe CRA $950 for 2024,” the construction worker said. “Ruined my day.”

“Do you know what for?” the server asked. “No, I’ll just pay it,” the construction worker said. The server replied that she had owed $3,500 the year before. Neither had any framework for understanding what had just happened to them.

They will each work for 40 years and they will pay taxes their whole working lives without ever quite understanding why their net position is what it is. The system around them will keep getting more complicated , not less.

That is what tax and financial illiteracy costs in 2026. It compounds quietly across a working life and it leaves politicians free to sell almost anything to a population without the framework to evaluate it.

The path forward runs on two tracks. The first is the slow, multigenerational work of building tax and financial literacy in schools, workplaces and everyday conversation. The second is making the system simpler to understand, which is to say comprehensive tax reform of the kind this country has not undertaken in more than 50 years.

A tax system that ordinary working Canadians cannot understand is not a healthy system. Combined with improved financial literacy, people would be able to make better decisions throughout their lives.

As for Portugal, I’m confident I will enjoy my time there, and I will pay for every bit of it using after-tax dollars, as the law requires. Tax myths are charming at cocktail parties; they are expensive everywhere else.

Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at [email protected] and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.

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