Pub Date : 2024-04-01DOI: 10.32721/ctj.2024.72.1.kesselman
Jonathan R. Kesselman
Increased, targeted taxation of capital gains is key to making the personal income tax more progressive, and it can also contribute to a more efficient system. This article assesses a two-tier capital gains tax that would apply a second, higher inclusion rate for gains above a specified threshold. Relative to a general increase in the inclusion rate—widely promoted by tax analysts—a two-tier scheme would focus on high-income, high-wealth taxpayers, forgo limited revenue, and be more publicly acceptable and politically viable. Relative to reforms to the alternative minimum tax (AMT), the two-tier scheme would be simpler, cover more taxpayers, capture more revenue, and conform more closely to the notion that "the rich pay their fair share." The article explains how capital gains are an amalgam of capital and labour inputs, often containing supernormal returns that are an efficient target for increased taxation. The article further details the high concentration of recurrent large capital gains at top income levels and critically assesses arguments commonly made against raising the gains inclusion rate. It also identifies desirable companion measures for a two-tier gains tax—including restoration of income averaging and abolition of the federal 33 percent top tax bracket and the AMT itself. In short, the current 50 percent capital gains deduction serves as a gateway for endless tax-minimizing and economy-distorting stratagems. Closing that gate even partway for those most prone to enter into such planning would be pivotal in making Canada's tax system both more efficient and more progressive.
增加有针对性的资本利得税是提高个人所得税累进性的关键，同时也有助于提高税制的效率。本文对两级资本利得税进行了评估，即对超过特定门槛的收益适用第二级更高的包含税率。相对于税收分析师普遍提倡的普遍提高含税率，两级方案将重点关注高收入、高财富的纳税人，放弃有限的税收，更容易被公众接受，在政治上也更可行。相对于替代性最低税（AMT）的改革，两级税制将更加简单，涵盖更多纳税人，获得更多税收，并且更符合 "富人支付其公平份额 "的理念。文章解释了资本利得是资本和劳动力投入的混合体，通常包含超常收益，是增加税收的有效目标。文章进一步详述了经常性大额资本利得高度集中于最高收入水平的情况，并批判性地评估了反对提高利得包含率的常见论点。文章还指出了两级收益税的理想配套措施--包括恢复收入平均法、废除联邦 33% 最高税率和 AMT 本身。简而言之，目前 50% 的资本利得扣除额是无休止的减税和扭曲经济策略的入口。对于那些最容易进行此类规划的人来说，哪怕只是部分地关闭这扇门，也会对提高加拿大税收制度的效率和累进性起到关键作用。
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Pub Date : 2024-04-01DOI: 10.32721/ctj.2024.72.1.awards
{"title":"Canadian Tax Foundation Awards/Prix de la Fondation canadienne de fiscalité","authors":"","doi":"10.32721/ctj.2024.72.1.awards","DOIUrl":"https://doi.org/10.32721/ctj.2024.72.1.awards","url":null,"abstract":"","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"53 28","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140765480","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-04-01DOI: 10.32721/ctj.2024.72.1.pf.latulippe
Lyne Latulippe
Ethics play a significant role in a critical assessment of tax practice, but ethical standards on their own have a rather limited influence on tax-planning decisions; therefore, transparency is a necessary tool. Tax planning has traditionally been driven by cost-benefit analysis and by a risk-management perspective. However, closer public scrutiny of corporate tax affairs and increased disclosure requirements have put pressure on tax-planning decisions, thus adding an ethical dimension to the risk-management perspective. Transparency is certainly essential in limiting the aggressiveness of tax planning, but its impact on ethics may be broader in providing an occasion to change the "moral meanings" in relation to tax-planning activities for those involved.
{"title":"Policy Forum: Transparency—An Essential Condition for Ethical Behaviour in Tax Planning","authors":"Lyne Latulippe","doi":"10.32721/ctj.2024.72.1.pf.latulippe","DOIUrl":"https://doi.org/10.32721/ctj.2024.72.1.pf.latulippe","url":null,"abstract":"Ethics play a significant role in a critical assessment of tax practice, but ethical standards on their own have a rather limited influence on tax-planning decisions; therefore, transparency is a necessary tool. Tax planning has traditionally been driven by cost-benefit analysis and by a risk-management perspective. However, closer public scrutiny of corporate tax affairs and increased disclosure requirements have put pressure on tax-planning decisions, thus adding an ethical dimension to the risk-management perspective. Transparency is certainly essential in limiting the aggressiveness of tax planning, but its impact on ethics may be broader in providing an occasion to change the \"moral meanings\" in relation to tax-planning activities for those involved.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"256 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140778330","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-07-01DOI: 10.32721/ctj.2023.71.2.pfp
Luc Godbout, Natalie Hotte
En vigueur depuis le 1er avril 2023, le compte d'épargne libre d'impôt pour l'achat d'une première propriété (CÉLIAPP), instauré par le gouvernement fédéral, a pour objectif de favoriser l'accumulation d'épargne en vue de l'achat d'une première habitation. À la lumière des dispositions législatives, les auteurs détaillent les paramètres du CÉLIAPP et en font ressortir les particularités par comparaison avec les paramètres d'autres véhicules d'épargne existants, notamment le CÉLI et le REÉR.
{"title":"Planification fiscale personnelle : Les paramètres du nouveau compte d'épargne libre d'impôt pour l'achat d'une première propriété (CÉLIAPP)","authors":"Luc Godbout, Natalie Hotte","doi":"10.32721/ctj.2023.71.2.pfp","DOIUrl":"https://doi.org/10.32721/ctj.2023.71.2.pfp","url":null,"abstract":"En vigueur depuis le 1er avril 2023, le compte d'épargne libre d'impôt pour l'achat d'une première propriété (CÉLIAPP), instauré par le gouvernement fédéral, a pour objectif de favoriser l'accumulation d'épargne en vue de l'achat d'une première habitation. À la lumière des dispositions législatives, les auteurs détaillent les paramètres du CÉLIAPP et en font ressortir les particularités par comparaison avec les paramètres d'autres véhicules d'épargne existants, notamment le CÉLI et le REÉR.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"269 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132428564","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-07-01DOI: 10.32721/ctj.2023.71.2.sym.boadway
Robin Boadway, J. Tremblay
Recent proposals for corporate tax reform in Canada call for changing the existing tax on shareholder income to a tax on rents or above-normal profits. A feasible option would be an allowance for corporate equity (ACE) system based on the territorial principle. Canada has agreed to the approach to international corporate tax reform developed by the Organisation for Economic Co-operation and Development, including the pillar two minimum tax proposal. We explore the compatibility of adopting pillar two with the ACE system. Several elements of pillar two would complement moving to an ACE system. Large multinational corporations would be liable for a top-up tax if their effective tax rates in any given jurisdiction fell below 15 percent. The effective tax rates and the top-up tax would both use the territorial approach and consolidated accounting. The top-up tax would be similar to a tax on excess profits. Pillar two might also mitigate tax competition and reduce the constraints that countries face in increasing their tax rates on excess profits. For these reasons, pillar two would facilitate moving to an ACE system. At the same time, the minimum tax would deter adoption of an ACE if the deduction for the cost of equity finance reduced the pillar two effective tax rate. On balance, pillar two would be compatible with proposed corporate tax reforms.
{"title":"The Implications of Pillar Two for Corporate Tax Reform","authors":"Robin Boadway, J. Tremblay","doi":"10.32721/ctj.2023.71.2.sym.boadway","DOIUrl":"https://doi.org/10.32721/ctj.2023.71.2.sym.boadway","url":null,"abstract":"Recent proposals for corporate tax reform in Canada call for changing the existing tax on shareholder income to a tax on rents or above-normal profits. A feasible option would be an allowance for corporate equity (ACE) system based on the territorial principle. Canada has agreed to the approach to international corporate tax reform developed by the Organisation for Economic Co-operation and Development, including the pillar two minimum tax proposal. We explore the compatibility of adopting pillar two with the ACE system. Several elements of pillar two would complement moving to an ACE system. Large multinational corporations would be liable for a top-up tax if their effective tax rates in any given jurisdiction fell below 15 percent. The effective tax rates and the top-up tax would both use the territorial approach and consolidated accounting. The top-up tax would be similar to a tax on excess profits. Pillar two might also mitigate tax competition and reduce the constraints that countries face in increasing their tax rates on excess profits. For these reasons, pillar two would facilitate moving to an ACE system. At the same time, the minimum tax would deter adoption of an ACE if the deduction for the cost of equity finance reduced the pillar two effective tax rate. On balance, pillar two would be compatible with proposed corporate tax reforms.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122199656","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-07-01DOI: 10.32721/ctj.2023.71.2.fon
L. Godbout, Suzie St-Cerny
In this article, Luc Godbout and Suzie St-Cerny focus on the effects of enhancing the Canada workers benefit (CWB) in 2021. More specifically, they seek to determine whether, for couples in Ontario and Quebec, the enhancement served to render work more rewarding (by lowering effective marginal tax rates) and to provide better income support for low-income workers (by increasing disposable income). The authors show that, while the objective of income support was achieved, the results for the objective of work incentivization were mixed, depending largely on a couple's family income level and working income split. The authors suggest how the CWB might be reformed to better fulfill its role in incentivizing work.
{"title":"Finances of the Nation: Is the CWB Enhancement Achieving Its Dual Objective of Supporting Income and Incentivizing Work? The Effects for Couples in Ontario and Quebec","authors":"L. Godbout, Suzie St-Cerny","doi":"10.32721/ctj.2023.71.2.fon","DOIUrl":"https://doi.org/10.32721/ctj.2023.71.2.fon","url":null,"abstract":"In this article, Luc Godbout and Suzie St-Cerny focus on the effects of enhancing the Canada workers benefit (CWB) in 2021. More specifically, they seek to determine whether, for couples in Ontario and Quebec, the enhancement served to render work more rewarding (by lowering effective marginal tax rates) and to provide better income support for low-income workers (by increasing disposable income). The authors show that, while the objective of income support was achieved, the results for the objective of work incentivization were mixed, depending largely on a couple's family income level and working income split. The authors suggest how the CWB might be reformed to better fulfill its role in incentivizing work.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116052381","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-07-01DOI: 10.32721/ctj.2023.71.2.itp
R. Danon
The author analyzes the Supreme Court of Canada's judgment in Canada v. Alta Energy Luxembourg SARL in light of the rules of the Vienna Convention on the Law of Treaties (VCLT), including general principles of law such as good faith and legal certainty pursuant to the principle of systemic integration set out in article 31(3)(c) of the VCLT. The author concludes that the findings of the majority are correct as a matter of public international law.
根据《维也纳条约法公约》(VCLT)第31条第3款(c)项规定的系统整合原则，包括诚信和法律确定性等一般法律原则，笔者分析了加拿大最高法院对加拿大诉Alta Energy Luxembourg SARL一案的判决。作者的结论是，就国际公法而言，多数人的结论是正确的。
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Pub Date : 2023-07-01DOI: 10.32721/ctj.2023.71.2.plekhanova
V. Plekhanova, C. Noonan
Drawing on narrative analysis developed by communications scholars, and applied by scholars of economics and international law and in policy analysis, this article studies action 1 of the Organisation for Economic Co-operation and Development's (OECD's) base erosion and profit shifting (BEPS) project as a policy narrative. The authors outline the role of narrative in international tax policy making and evaluate the probability and the argumentative and material coherence of the OECD's story about the need to ensure the stability of the international tax framework and system. Focusing on the narrative strategy adopted by the OECD to promote its pillar one proposal, the authors assess the likely persuasiveness of the OECD's stability argument—in particular, how it may have influenced the response to the proposal by the members of the Inclusive Framework on BEPS. The authors conclude that the OECD's concern about potentially destabilizing effects of digital services taxes and similar taxes on the international income tax system propagates a global fiscal illusion, and may not sustain long-term support for pillar one by many members of the Inclusive Framework.
{"title":"Strategic Narratives in International Tax Policy Making: BEPS Action 1 and the Stability Argument","authors":"V. Plekhanova, C. Noonan","doi":"10.32721/ctj.2023.71.2.plekhanova","DOIUrl":"https://doi.org/10.32721/ctj.2023.71.2.plekhanova","url":null,"abstract":"Drawing on narrative analysis developed by communications scholars, and applied by scholars of economics and international law and in policy analysis, this article studies action 1 of the Organisation for Economic Co-operation and Development's (OECD's) base erosion and profit shifting (BEPS) project as a policy narrative. The authors outline the role of narrative in international tax policy making and evaluate the probability and the argumentative and material coherence of the OECD's story about the need to ensure the stability of the international tax framework and system. Focusing on the narrative strategy adopted by the OECD to promote its pillar one proposal, the authors assess the likely persuasiveness of the OECD's stability argument—in particular, how it may have influenced the response to the proposal by the members of the Inclusive Framework on BEPS. The authors conclude that the OECD's concern about potentially destabilizing effects of digital services taxes and similar taxes on the international income tax system propagates a global fiscal illusion, and may not sustain long-term support for pillar one by many members of the Inclusive Framework.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121805607","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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