Tag: Business Tax
News about CEWS
Federal emergency wage subsidies are poorly targeted, resulting in a fiscal cost of about $14,500 for each person-month of employment saved through the program, or $188,000 per job year. Reductions in subsidy rates which began in September had only small impacts on employment, while reducing the fiscal cost of the program substantially. More recently, the government has backed away from those reforms, freezing subsidy rates and extending the program in 2021. The decision to back away from the September reforms was a mistake and a gradual phaseout of subsidies should start again now.
The Taxation of Capital Income in Canada Part II: The Corporate Income Tax
In the first commentary in this three-part series, I discussed the supply side of the capital market in Canada, and the personal taxation of dividends and capital gains. Here, I turn my attention to the demand side, and the corporate income tax. Specifically, I argue that replacing the current CIT with a tax on “economic rents” earned by businesses can make our tax system more efficient and equitable.
Boos for CEWS
Federal emergency wage subsidies are poorly targeted, resulting in a fiscal cost of $25,000 or more for each person-month of employment saved through the program so far. Recent reforms attempt to target subsidies better to reduce fiscal costs, but the new approach creates disincentives for business growth that put the economic recovery at risk. The program should be wound down at the end of the year, and future programs should be designed to direct payments to incremental jobs saved or created by the policy.
Tax Expenditures in Canada—Historical Estimates and Analysis
John Lester, Canadian Tax Journal (2019; 67(3)) Dataset Download Paper Paper Citation Lester, John (2019), “Tax Expenditures in Canada—Historical Estimates and Analysis”, Canadian Tax Journal […]
Tax Subsidies for R & D in Canada, 1981-2016
Daria Crisan and Kenneth J. McKenzie, Canadian Tax Journal (2017; 65(4)) R & D Tax Subsidies Data Download Paper Paper Citation Crisan, Daria and Kenneth […]
The Taxation of Dividend Income in Canada
Michael Smart, Canadian Tax Journal (2017; 65(2)) Smart 2017 All Tables Download Paper Paper Citation Smart, Michael (2017), “The Taxation of Dividend Income in Canada”, […]
Inside the Black Box: Marginal Effective Tax Rates on Capital in Canada – A Primer
Kenneth J. McKenzie, Canadian Tax Journal (2016; 64(4)) METR Summary Tables 2005-2014 Download Paper Paper Citation McKenzie, Kenneth J. (2016), “Inside the Black Box: Marginal Effective […]
The Corporate Income Tax in Canada – Past, Present, and Future
Kenneth J. McKenzie, Canadian Tax Journal (2015; 63(4)) CTF-CIT Data Download Paper Paper Citation McKenzie, Kenneth J. (2015), “The Corporate Income Tax in Canada – Past, […]
The Taxation of Capital Income in Canada Part III: Bringing it all Together
This is the final commentary in a three-part series examining possible reforms to Canada’s approach to taxing capital income. In this third commentary, I bring the material from the first two commentaries together and describe a tax reform package applied to the two sides of the capital market that would make Canada’s income tax system more attractive when viewed through the lens of the equity-efficiency trade-off. Key to the analysis is the decoupling of the supply and demand sides of the market in a small open economy like Canada.