OPINION: Liberal tax increases change behaviours, including charitable giving

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In 2016, Minister Morneau increased the top personal income tax rate to 33% from 29% on incomes above $200,000. The Liberals originally expected to generate $2.8 billion from the tax increase. However, they scaled that estimate back to $2.0 billion one month after being elected in November 2015 — with no mention from the government on how smart successful Canadians might respond to the tax change.

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Canada Revenue Agency’s recently released preliminary data for the 2016 tax year. No surprise, the tax revenue collected from those in the top 1% (Canadians earning above $250,000 a year) fell by $4.9 billion in 2016. That’s probably worth repeating. Instead of generating $2.8 billion from taxing these Canadians at a higher rate, the government lost $4.9 billion.