A study indicates that increasing the minimum tax for top earners could harm those with significant one-time capital gains. The tax hikes on wealthy individuals and corporations proposed in Budgets 2022 and 2023, aimed at achieving a fairer tax system, were analysed, revealing their potential impact on those utilising established tax deductions and adverse effects on business investment. The proposed changes to Canada’s alternative minimum tax for wealthy individuals and the introduction of a global minimum tax for multinational corporations have now become a reality. A report by the C.D. Howe Institute examined ways high-income earners can reduce their tax burden, highlighting that capital gains and RRSP deductions lowered effective tax rates. The raised AMT rate and basic AMT exemption proposed in Budget 2023 will result in a tax cut for middle-class Canadians, while more precisely targeting the wealthiest. The senior government official is confident that the proposed tax hikes will achieve the expected revenue increase over the next five fiscal years. The article highlights the need to avoid oppressive taxes and that one potential advantage of implementing a global minimum tax is that multinational corporations would pay their “fair share” wherever they do business, creating a level playing field with global competitors. The proposed taxes on stock buybacks and financial institutions’ dividends are other features of the 2023 budget.
2023 budget raises taxes for wealthy individuals and corporations.
