is minimum tax fair?

1S THE recently-
proposed minimum tax
for the wealthy fair?

‘By LISA SMEDMAN

Last week, | looked at the
mechanics of how the
“alternative minimum tax.”
proposed to take effect in
the 1986 tax year, will work.
This week, I'll try to answer
that question.

The alternative minimum
tax has been described as a
‘political’

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move, both
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campaign promise, and
because the $300 million it
will bring in will do little to
ease Canada's nearly $34
billion deficit.

It has also been described
as ‘San important start’’ by
NDP leader Ed Broadbent.

Next year, an alternative
minimum tax of between 24
and 27 per cent will be
charged on any income that
exceeds a base of $40,000,
once personal exemptions
and employment expenses
have been deducted. This
means the tax will hit those
who eam between about

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$45,000 and $50,000,
especially those who make a
lot of money from capital
gains or dividends, or who
use tax shelters,

Finance Minister Michael
Wilson could have chosen
two other methods of bring-
ing ina minimum tax.

Wilson could have simply
put @ maximum figure. on
the percentage of gross in-
come that can be written off
by using tax shelters, the
dividend tax credit, or the
capital gains rules. This kind
of minimum tax has been
tentatively adopted by

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Quebec.

Or he could have had
high-income earners pay
either their regular tax, or a
Nat percentage on their gross
income, whichever was
higher,

Instead, the alternative
minimum tax unveiled on
Dec. 4 is complicated, full of
carry forwards and double
calculations.

The tax will prevent all
but about 2,000 of the more
than 15 million Canadians
who file income tax returns

See Investor
Page 20

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11 - Sunday, December 29, 1985 - iNorth Shore News

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>. “---~ WORLD OF FOOD
Use your .
Personal Shopping Monday Dec. 30th
handy to Sunday Jan. 5th
Woodward's Prices effective at Lower Mainland and

Clearbrook stores only.