The Broadbent Institute Tax Index report suggests it's time to take stock of who's not paying their fair share.
From tax dodging and loopholes, to historically declining tax rates for the most wealthy, Canada is missing out on over $40 billion in revenue every year.
References
Canadian Centre for Policy Alternative. (2018). Alternative Federal Budget 2018. Retrieved from https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2018/02/Alternative_Federal_Budget2018.pdf
Canadians for Tax Fairness. (2019). Canadian corporate cash in top 12 tax havens increases by 10% to all-time high in 2018. Retrieved from https://www.taxfairness.ca/en/press_release/2019-04/canadian-corporate-cash-top-12-tax-havens-increases-10-all-time-high-2018
CBC News. (2000). A primer on capital gains taxes in Canada. Retrieved from https://www.cbc.ca/news/business/a-primer-on-capital-gains-taxes-in-canada-1.231145
Department of FInance Canada. (1981). Budget Papers. Retrieved from https://www.budget.gc.ca/pdfarch/1981-pap-eng.pdf
Forrest, M. (2019). Federal NDP's proposed 'super-wealth tax' could raise $70B over 10 years, budget watchdog finds. Retireved from https://nationalpost.com/news/politics/election-2019/federal-ndps-proposed-super-wealth-tax-could-raise-70b-over-10-years-budget-watchdog-finds
Government of Canada. (2018). Capital Gains – 2018. Retrieved from https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains-2016.html
Government of Canada. (2019). Canadian income tax rates for individuals - current and previous years. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html
Government of Canada. (2019). Corporation Tax Rates. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html
Government of Canada. (2019). Tax Gap: A brief overview. Retrieved from https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/corporate-reports-information/tax-gap-overview.html
Kassam, A. (2018). Canada's richest 87 families have same wealth as 12 million people, report says. Retrieved from https://www.theguardian.com/world/2018/jul/31/canada-richest-families-same-wealth-12-million-people-report
Macdonald. D. (2016) Out of the Shadows Shining a light on Canada’s unequal distribution of federal tax expenditures. Retrieved from https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2016/11/Out_of_the_Shadows.pdf
Macdonald, D. (2019). Mint Condition CEO pay in Canada. Retrieved from https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2019/01/Mint%20condition.pdf
Murphy, B., Veall, M. & Wolfson, M. (2015). Top-End Progressivity and Federal Tax Preferences in Canada: Canadian Tax Journal. 63.3, 661-88
Oved, C. M, Heaps, A. A, Toby. & Yow, M. (2017). Canada’s Corporations Pay Less Than You Think. The Toronto Star. Retrieved from http://projects.thestar.com/canadas-corporations-pay-less-tax-than-you-think
Oved, C. M & Cribb. R. (2019). Legal tax dodges cost Canada $25B, PBO study says. Retrieved from https://www.thestar.com/news/investigations/2019/06/20/legal-tax-dodges-cost-canada-25b-pbo-study-says.html
Stuckey, B & Yong, A. (2011). A Prime of Federal Corporate Tax Rates. Retrieved from https://lop.parl.ca/staticfiles/PublicWebsite/Home/ResearchPublications/InBriefs/PDF/2011-44-e.pdf 1Toby Sanger, executive director of Canadians for Tax Fairness, writes “Despite all the leaks and claims of action to crack down on tax havens, corporate Canada’s use and abuse of tax havens continues to grow.”
Canadian corporate cash in the top 12 tax havens increased by 10% to all-time high in 2018.
“Despite all the leaks and claims of action to crack down on tax havens, corporate Canada’s use and abuse of tax havens continues to grow”, said Toby Sanger, executive director of Canadians for Tax Fairness. “Government clearly hasn’t fixed its multi-billion-dollar problem of tax haven use. By channeling funds to low-tax jurisdictions, corporations and wealthy investors continue to enjoy all the benefits of living in Canada without fully contributing to the very services and programs they use. We clearly need both tougher enforcement and tougher laws.” No Canadians have yet been charged with tax evasion related to the Panama Papers or Paradise Papers leaks, unlike in other countries. Canadians for Tax Fairness estimates that Canada loses at least $8 billion annually from the use and abuse of international tax havens and profit shifting. The main beneficiaries are mega-corporations that can exploit international tax laws to their advantage while ordinary Canadians—and small and medium-sized businesses—lose out.2
Maura Forrest reported in the National Post that Canada’s budget watchdog has found the NDP’s proposed wealth tax, a centrepiece of the party’s election platform, could raise nearly $70 billion over the next 10 years.
The “super-wealth tax,” as the NDP is calling it, is similar to an idea promoted by U.S. Democratic presidential candidate Elizabeth Warren, and is part of the NDP’s campaign focus on tax fairness and inequality. The party wants to apply a one per cent tax to fortunes worth more than $20 million. Unlike a tax on income, a wealth tax would apply to all assets, including real estate, with the aim of reducing economic inequality. The NDP says the tax would apply only to the wealthiest one-tenth of one per cent of Canadian households.The parliamentary budget officer (PBO) released a cost estimate of the proposal, part of its mandate to cost out election platforms. According to the analysis, the measure could raise $5.6 billion in the 2020-21 fiscal year, rising to nearly $9.5 billion in 2028-29.3
The battle against economic inequality, and the climate emergency will require greater government revenue going forward.
References
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