Rich professionals could pay more taxes
Rich professionals Minister of Finance Bill Morneau wants to eliminate tax loopholes that are used by wealthy professionals such as doctors and lawyers to pay less tax.
“Many of the wealthiest Canadians are unfairly exploiting tax rules,” Morneau said in a written statement.
The latter, an accomplished Toronto businessman, ironically admitted at a press conference on Tuesday that he will himself be called upon to contribute more to the fisc in the future.
“I will probably have to pay more taxes in the future because of our changes,” he told reporters.
The number of private companies has exploded in Canada since the early 2000s, “a disturbing trend,” according to the minister.
These companies are sometimes used as a screen by their owners to pay less tax.
For example, the Trudeau government wants to consult with Canadians to eliminate tax loopholes.
In particular, Ottawa wants to address the distribution of income among families of entrepreneurs.
The ploy is for a business owner to distribute his or her income to family members with a lower tax rate, even if they do not contribute to the corporation.
It is estimated that some 50,000 families benefit from the largesse of the system.
Second, the Trudeau government wants to tackle the money that sleeps in the coffers of these companies.
These “passive investments” are subject to a much lower tax rate than personal income.
Finally, Ottawa wants to tighten the rules around the conversion of income into capital gains.
The measures proposed by the Liberals could inflate the state coffers by at least $ 250 million.
In the election platform of the party, the amount of $ 500 million was mentioned.
Morneau, however, did not want to go further than a quarter of a billion, when questioned on the subject during the announcement.
As for the expenses incurred in introducing the new measures, the minister maintains that they would be “very little”.
The proposed changes to the tax system are seen as a “step in the right direction” by the NDP and conservative opposition, who expect “concrete” actions beyond “consultations”.