My Davies tax group colleagues Chris Anderson and Etyan Dishy (both of whom are former Osgoode students of mine!) have published a terrific article in the latest Canadian Tax Journal on “The Permissibility of Surplus Stripping”. The authors begin with a review of the legislative and judicial context surrounding sections 84.1, 212.1 and subsection […]
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Joint Tax Filing for Spouses
A threshold issue for the design of any tax system is the taxing unit. In Canada our taxing unit for personal taxation is and has always been the individual. The Carter Commission recommended we change the taxing unit to families (spouses and their dependent children) on the grounds that families constitute the basic economic […]
Resurrecting the Advisory Panel’s Recommendation for a Full Exemption System
For some time there has been debate about our current system of providing double tax relief for foreign-source active business income earned by Canadian corporations indirectly through foreign affiliates. In the 1970’s the drafters of the Act chose a hybrid mechanism using both the exemption and credit systems. But this requires surplus account tracking, […]
Keeping Canadian Corporate Tax Rates Competitive
The latest issue of the Canadian Tax Foundation’s newsletter, Perspectives on Tax Law and Policy, examines from different perspectives whether Canadian corporate tax rates are too high, too low, or just right. My contribution to the newsletter is linked below. It comes from my perspective that incentives matter very much – we need to […]
Wealth Taxes – A Poor Solution for Canada
As a Canadian tax policy commentator, I am troubled when U.S. policy proposals are reflexively promoted by some in Canada, without necessarily examining whether the underlying rationale applies in this country. For example, the wealth tax proposals advocated by Democratic primary candidates Elizabeth Warren and Bernie Sanders were developed in the U.S. context of […]
Eligible Dividend Designations – Let’s Change the Default Rule for Public Corporations and their Subsidiaries
Some of the annoying complexity of our tax system stems from how we integrate corporate taxes and personal taxes when a corporation pays a dividend to an individual shareholder. Our integration system grosses up the dividend (to reflect the assumed amount of income earned by the corporation before its corporate taxes), applies the personal […]