(OTTAWA) The House Budget Commissioner estimates that the federal government’s proposed changes to the “alternative minimum tax” will generate $2.6 billion in additional tax revenue over five years.
This “alternative minimum tax” aims to ensure that high-income individuals and trusts do not pay a disproportionate amount of tax in relation to their income compared to what other taxpayers pay.
The Liberal government has proposed changes to the alternative minimum tax in the 2023 budget to ensure higher earners pay a larger share of total income from this tax.
The changes, which come into effect in January 2024, would increase the alternative minimum tax rate from 15% to 20.5%. Additionally, the income bracket excluded from the alternative minimum tax calculation would increase from $40,000 to $173,000.
While the Parliamentary Budget Officer expects the changes will mean that high earners will pay the highest share, he does not expect the same to be the case for trusts.
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