Photo credit: Katrina.Tuliao - https://www.tradergroup.org
Canadians can weigh in on the government’s proposed changes to one of the most egregious and expensive tax loopholes – the stock option deduction.
This unfair tax break allows high-paid executives to only pay tax on half the money they make from cashing in the compensation they receive in stock options. Over 90 per cent of the value of this $1 billion loophole goes to the top 1 percent and two-thirds goes to the top 0.01% richest Canadians.
It also hurts economic growth by inciting CEOs and executives to have their corporations engage in share buybacks, which boosts the value of their own compensation, rather than investing in the economy and creating more jobs.
In its 2019 budget, the federal government identified the stock option deduction as unfair and promised to limit the deduction $200,000 a year on the grant value of stock options for each individual in a large long-established firm.
Canadians for Tax Fairness welcomed the government’s announcement earlier this year to limit the loophole, but we believe it doesn’t go far enough. The new rules would still allow many to pay lower taxes on income from stock options than ordinary Canadians pay on their employment income . The government’s proposed changes would replace this larger loophole with a lot of smaller loopholes and make the tax system more complicated.
Please tell the government that it’s time to close this loophole completely.
The Ministry of Finance is accepting written comments on its plans until September 16. Email your comments to: fin.ESO-OAAE.email@example.com