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.
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.