Liberal Budget 2024: Capital Gains Tax Changes
Introduction
In a bid to make wealthy individuals and corporations pay more taxes, the federal Liberals have announced that they will be increasing the capital gains inclusion rate—the share of capital gains that is taxed as income. The change was announced in Budget 2024, which was released on April 16, 2024.
Details of the Changes
The 2024 budget would increase the inclusion rate from one-half to two-thirds on capital gains above $250,000 for individuals. So, for the first $250,000 in capital gains, an individual would pay tax on half of the gain. For gains above $250,000, they would pay tax on two-thirds of the gain.
Impact on Canadians
According to the federal budget, the inclusion rate increase will impact approximately 0.13% of Canadians. These are individuals who have more than $250,000 in capital gains in a year.
The change is expected to raise $1.7 billion in additional revenue over the next five years.
Reaction to the Changes
The proposed changes have been met with mixed reactions. Some experts have praised the move, saying that it will help to make the tax system fairer. Others have criticized the change, arguing that it will discourage investment and hurt the economy.
The Canadian Chamber of Commerce has called the changes "unfair and counterproductive." The chamber argues that the changes will make Canada less competitive and will discourage investment.
The Canadian Taxpayers Federation has also criticized the changes, saying that they will "punish" successful Canadians.
Conclusion
The proposed changes to the capital gains tax are a significant change to the Canadian tax system. The changes are expected to raise $1.7 billion in additional revenue over the next five years. However, they have been met with mixed reactions from experts and stakeholders.
Comments