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Canada's Tax Competitiveness: A Response to Trump's Tax Cuts
Analysis of the widening tax gap between Canada and the US after Trump's election win, and recommendations for Canadian tax policy reforms.
English
Canada
PoliticsEconomyUs PoliticsUsaCanadaInternational TradeTaxes
Fraser InstituteNato
Donald TrumpJustin Trudeau
- Why are Canada's higher tax rates a concern according to the authors?
- Canada's higher tax rates, particularly for personal and business income, compared to the US, make it less attractive for skilled workers and businesses. This reduces investment and economic growth.
- What business tax reforms are proposed to enhance Canada's competitiveness?
- The authors recommend that Canada only tax business profits not reinvested in the company and reverse the recent capital gains tax hike to encourage investment. These changes would boost Canada's economy.
- What is the authors' overall conclusion regarding the need for action in Canada?
- While acknowledging potential downsides to Trump's policies, the authors emphasize the urgent need for Canada to address its tax competitiveness problem to avoid falling further behind the US.
- What specific personal income tax changes do the authors suggest Canada implement?
- To improve tax competitiveness, the authors suggest Canada reduce personal income tax rates, creating a two-rate system (15% and 29%). They also propose lowering business tax rates to match potential US reductions.
- What is the main policy difference between Canada and the US regarding taxes as described in the text?
- Donald Trump's victory in the 2020 presidential election will likely lead to lower taxes in the US, while Canada has recently increased taxes. This creates a tax competitiveness issue for Canada.