cover image: Corporate tax reform

Premium

20.500.12592/ccg71q

Corporate tax reform

2 May 2014

The paper contains several recommendations to modernize Canada’s corporate tax: the starting place for transition to a rent-based tax is the adoption of an allowance on corporate equity that would add a deduction for the cost of equity finance; this would be followed by changing the personal income tax by eliminating the dividend tax credit and including 100 per cent of capital gains in taxable in [...] The income tax of the amount of taxes that the corporation had paid—but system is replete with many other special provisions relating the views it summarized are those that have since guided the to capital gains, and this leads to incentives for tax planning design of the corporate tax. [...] This reflects an increase in the underlying corporate tax base, both from a broadening of the corporate tax base to reduce or eliminate corporate tax incentives in the 1980s and 1990s, and the positive impact of firms allocating relatively more revenues to Canadian operations, particularly given the significant tax rate advantage in Canada relative to the United States. [...] A more incremental approach whose purpose was to enhance the efficiency of the existing system was proposed by the 1997 Mintz Report prepared for the federal Department of Finance.26 It accepted the traditional objective of the corporate tax as a backstop to the personal tax, and advocated changes that would both reduce the investment disincentives of the corporate tax and improve its integration [...] The possibility of tax shifting is, however, important for a full understanding of the case against viewing the role of the corporate tax as a backstop for the personal income tax.
economics economy taxation finance tax system investment business capital gains tax corporations debt depreciation investments labour prices retirement earnings securities tax pension taxes corporate profits corporate tax capital gains expense tax base government finances dividend dividend tax

Authors

Boadway, Robin W, Tremblay, Jean-François

ISBN
9781927350744
Pages
68
Published in
Ottawa, Ontario

Related Topics

All