Services/Departments Research "Tax Facts" High Income Tax Cuts: Robin Hood in ReverseTAX FACT: Many of the tax cuts being proposed by the Liberals and the Canadian Alliance are especially regressive, because the benefits are focused almost exclusively on high-income earners. This includes the capital gains exemption, eliminating the 5% surtax, and the proposed "flat tax."
High-Income Tax Cuts:Robin Hood in Reverse
Raising the Capital Gains Exemption (to 50% from 75%)
What it Does: Investors only have to declare 50% of capital gains on tax return.
Who it Benefits: Annual tax savings resulting to...
Top 2% of the population: $1.2 billionTop
10% of the population: $1.5 billion
Bottom 60% of the population: $100 million
Eliminating the High-Income Surtax What it Does: Former 5% surtax on federal tax above $12,500 is eliminated.
Who it Benefits: Annual tax savings resulting to...
Top 2% of the population: $500 million
Top 10% of the population: $1 billion
Bottom 60% of the population: nothing
17% Federal Flat Tax on All Income
What it Does: All taxpayers pay 17% tax rate, regardless of income level.
Who it Benefits: Annual tax savings resulting to...
Top 2% of the population: $7 billion
Top 10% of the population: $11 billion
Bottom 60% of the population: nothing
Source: CAW Research estimates from Dept. of Finance, "Budget
Plan 2000" and "Economic Statement and Budget Update"; Canada
Customs and Revenue Agency, "Tax Statistics on Individuals." Flat
tax simulation includes impact on federal tax only of the change in
the tax rate; proposed increases in personal exemptions (which are
not part of the flat tax) are excluded.
