By Peter Mairy, The Globe and Mail”This is an issue that we’re all familiar with, the gap between what we earn and what we pay in taxes.
The issue of the middle class and income inequality is one of the most significant issues facing Canadians,” said Liberal Leader Justin Trudeau, in a statement Friday.
“I want to congratulate Prime Minister Trudeau on the great leadership he’s shown in taking on this challenge.”
Mr. Trudeau said he’s also “proud” of the Liberal government’s approach to dealing with the tax-fraud issue.
The Liberals announced a tax break for small businesses in October and the promise to introduce a $9-billion tax break on small business income from Jan. 1.
In a speech in September, the Liberal leader pledged to raise $12 billion in the first half of 2020 from small business.
“I think the government has got a very solid plan, which includes a big tax break, which will increase revenues in the short term,” said David Eby, president of the Canadian Taxpayers Federation, who supports the tax break.
“But, we know that that is not enough.”
Mr: tax,tax,taxThe Liberals plan would also eliminate the corporate income tax rate, which has been the focus of a long-running debate in Canada.
It would be replaced by a “corporate income tax” rate of 20 per cent.
“If you are a small business owner, you will pay a lower rate than if you are somebody who is a very big corporation,” said Ms. Eby.
“This will help you to pay your taxes more efficiently.
We think it’s an important measure, and we think it will provide real relief for small business owners.”
Mr Eby said he hopes the new tax break would be passed on to the next generation.
“The middle class is going to benefit from this.”
“The middle income tax bracket will be reduced by about $10,000, which is about the same amount that you would pay in a corporation tax rate,” he said.
“It will reduce the income tax brackets for all Canadians by $5,000.”
The Liberals also say they would boost the corporate tax rate to 25 per cent, which would be the lowest since the early 1990s.
The new tax would be effective in 2021, and the Liberals plan to bring it into effect in 2022.
Mr. Einby said it’s important to note that the Liberals’ plan would reduce the number of tax brackets, not eliminate them.
“We’re not going to be eliminating the top bracket.
We’re going to lower it,” he told CBC News.
“You are going to see a big reduction in the corporate bracket.”
Ms. Ebys concerns about the Liberals plans are also based on the fact that they’re not actually offering a tax cut.
“Our government will not be raising corporate income taxes,” she said.
“It’s a big leap to start raising corporate tax rates.”
The Liberal plan is expected to raise an estimated $3.4 billion in revenues over the first five years of its operation, which Mr. Trudeau’s Liberals have promised to use to “increase investments in the economy and to support jobs, public services and economic growth.”
The tax breaks will also be passed along to the middle classes, according to Mr. Ebeby.
That means, in the next five years, they will be able to save up to $9,000 each year on their tax bill.
“We are going back to basics,” he added.
“That’s why I think this is important.”
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