(OTTAWA) The Parliamentary Budget Officer 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” is intended to ensure that individuals and trusts with high incomes do not pay a disproportionately small amount of tax relative to their income, compared to what other taxpayers pay.
The Liberal government proposed changes to the alternative minimum tax in the 2023 budget so that individuals with the highest incomes pay a greater proportion of the total revenues arising from this tax.
The changes, which will take effect in January 2024, would increase the alternative minimum tax rate from 15% to 20.5%. In addition, the bracket of income excluded from the calculation of the alternative minimum tax would increase from $40,000 to $173,000.
Although the Parliamentary Budget Officer believes that the changes will cause individuals with high incomes to pay the largest share, he does not expect this to be the case for trusts as well.
