The third Liberals, federal budget is going to be announced on Tuesday. All eyes are now on the Finance Minister of Canada Bill Morneau and what he does with the major tax issues in the country. The following are some of the tax issues that might be considered in the budget.
Personal tax rates
There was a tax cut for the middle-income group from 22 percent to 50 percent and an increase in the tax for the higher income group in 2016. The statutory tax rate is anywhere between 20 to 50 percent, depending on where you are residing and your income. The 2018 U.S. tax reforms proposed by Trump have made the personal tax rate to top at just 37 percent. There is about 18 percent of the tax difference between the two countries. This gap has to be addressed in the new budget that Bill proposes in order to hold the highly skilled and mobile workers from moving base to the U.S.
The 2018 US tax reform has reduced the corporate tax to 21 percent from 35 percent. The Business Council of Canada wants the FM of Canada to make an immediate tax cut as far as corporate taxes are concerned.
Those in the small businesses need to keep an eye on what the FM dishes out for them during the Budget session.