Canadian Conservative Proposes Bold Income Tax Plan

by Mike Godfrey, Tax-News.com, Washington

12 February 2004

Tony Clement, a candidate for the leadership of the Canadian Conservative Party has proposed radical new tax plans that will free Canadians from paying federal taxes on the first $250,000 of their lifetime income.

According to Clement, the measure aims to stem the so-called ‘brain drain’ of skilled workers moving abroad, by offering a tax incentive to forge a career in Canada.

"This is about giving young people an opportunity to start their lives here in Canada," he commented. "A lot are immersed in student debt, they're looking for an opportunity to make a start in life and here's a chance if you stay in Canada, the first $250,000 you make is tax free."

Under the plan, those who accumulate lifetime earnings of between $250,000 and $500,000 will be taxed at 14%; income of between $501,000 and $750,000 would attract tax at 24%; and above $1 million, a tax rate of 27% would be levied.

Clement envisages that the earliest the proposals could be put into effect would be 2006, should he become the country’s next leader.

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