Tag: income tax

A capital gains tax reform simulation model

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We use data on the distribution of capital gains income across and within income groups to simulate the impact of reforms to increase capital gains tax rates. Readers can use our online tool to explore different possible reforms. A reform that targeted only the highest capital gains income amounts would affect very few families, while raising substantial revenue, and increasing fairness in the tax system. Read this articleA capital gains tax reform simulation model→

Pathways to reform of capital gains taxation in Canada

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This commentary, an executive summary of a full report. considers the case for increasing taxes on capital gains in Canada and the implications for the upcoming reform of the alternative minimum tax (AMT), slated for release in the 2023 federal budget. Read this articlePathways to reform of capital gains taxation in Canada→

The Liberals’ plan for first-time homeowners is a good start but should be more equitable

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The FHSA would cost up to $1.4 billion annually, but much of the benefit would likely go to high-income households. Changes to the proposed program would make it more fair and more likely to encourage private savings by prospective first-time homebuyers. Read this articleThe Liberals’ plan for first-time homeowners is a good start but should be more equitable→

UPDATE: Surplus stripping and the new, costly tax loophole for intergenerational transfers

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Part I: A recently approved private member’s bill is deeply flawed and opens the floodgates to aggressive surplus stripping schemes. It should be fixed. Read this articleUPDATE: Surplus stripping and the new, costly tax loophole for intergenerational transfers→

Canada should harmonize tax credits to enhance fairness and efficiency

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Our proposal represents an incremental step in the direction of a basic income guarantee. Harmonizing the main income tax credits, making the base and tax-back rate suitably progressive, and ensuring they are all refundable would form the basis for a modest basic income. Read this articleCanada should harmonize tax credits to enhance fairness and efficiency→

Are the rich really getting poorer in Canada?

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The rise of small-business incorporation is suppressing taxable incomes of rich Canadians. The growing gulf between top personal tax rates and the low rates paid by small CCPCs is driving the rise of incorporation. Read this articleAre the rich really getting poorer in Canada?→

Evidence on Behavioural Effects of Higher Capital Gains Taxes in Canada

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The debate over whether to increase the tax rate hinges in part on the extent to which a higher tax rate would distort investment decisions and reduce incentives for Canadians to invest. This commentary sheds light on this debate by analyzing the effects of a tax policy change in the mid-1990s that increased the effective capital gains tax rate. They find that the new higher rate on capital gains tax had no adverse effect on cumulative adverse effects on capital gains realizations. Read this articleEvidence on Behavioural Effects of Higher Capital Gains Taxes in Canada→