From the Canadian Taxpayers Federation

By Jay Goldberg 

The topic on everyone’s mind is tariffs: Will Trump act on his threat to impose 25 per cent across-the-board tariffs on the Canadian economy?

But there’s something else Canadians should worry about: income taxes.

During President-Elect Donald Trump’s first term, he lowered income taxes for Americans at virtually at all income levels. And Trump pledged during the presidential election campaign to cut taxes further.

Here in Canada, our tax rates are already uncompetitive. With a possible tax cut south of the border, it’s time to re-examine Canada’s income tax policies.

Let’s take a gander at how Canadians who earn $75,000 a year are taxed compared to Americans.

A taxpayer in Ontario earning $75,000 a year pays an income tax rate of about 30 per cent.

Compare that to the two states bordering Ontario: Michigan and New York. In Michigan, a taxpayer earning $75,000 a year pays a 26.3 per cent income tax rate. And in New York, one of the highest-taxed states in the U.S., that taxpayer would face a 27.5 per cent income tax bill.

Considering that sales taxes and hydro rates are lower south of the border, Canada is clearly at a disadvantage. Add to that the fact that Canadians pay a punishing carbon tax while Americans don’t.

The situation is even more stark for those with higher incomes.

A taxpayer earning $150,000 in Ontario sends roughly 41.7 per cent of their income to Queen’s Park and Ottawa in income taxes.

Compare that once again to Michigan and New York. A Michigander making $150,000 a year pays a 28.3 per cent income tax rate. And a New Yorker pays 30 per cent.

These numbers are glaring. Canadians pay dramatically higher income taxes than our neighbours to the south. And Michigan and New York are some of the higher-tax states.

In Texas, a taxpayer earning $150,000 pays a 24 per cent income tax rate. That’s lower than the income tax rate for an Ontarian who earns half that much.

The cross-border tax gap will likely grow further in the new year. Trump says he plans to further lower income taxes while the Trudeau and Ford governments show little appetite for providing taxpayers up north with a similar break.

For the sake of Canada’s economic competitiveness, income tax cuts need to be placed firmly back on the public policy agenda.

Premier Doug Ford promised to cut income taxes for middle-class Ontarians by nearly $800 a year when he was first became premier six years ago. He pledged to do so by lowering Ontario’s second income tax bracket by 20 per cent.

If there was ever a time for Ford to follow through on his election promise, that time is now.

The feds need to look at cutting income taxes too. Most of the income tax burden in Canada is caused by high tax rates at the federal level.

To insulate Canada from the magnetic pull that will be triggered by a second round of Trump tax cuts, Prime Minister Justin Trudeau must look at lowering personal income tax rates.

Trudeau can cut income taxes substantially without hiking the deficit because there’s plenty of opportunities for savings.

Here’s where to start: The Trudeau government spent $47 billion on corporate welfare in 2021.

If Trudeau eliminated corporate welfare, the feds could cut personal income taxes by 20 per cent across the board without hiking the deficit.

Canada’s politicians can’t be complacent. We can’t control what Trump chooses to do when he gets back into the White House, but Canada’s politicians can control public policy north of the border to make the Canadian economy more competitive.

That starts with cutting income taxes.

From the Daily Caller News Foundation

By Jason Cohen

Canadian businessman Kevin O’Leary proposed on Thursday that the United States and Canada eliminate the border between them to form a united front against China and Russia.

Trump suggested in a Christmas Day Truth Social post that Canada should become the United States’ 51st state, which the president-elect asserted would boost the northern country’s economy and provide it with military security. O’Leary, on “The Big Money Show,” said the potential economic and security benefits of the countries uniting are attractive prospects.

WATCH:

“There’s 41 million Canadians, basically the population of California, sitting on the world’s largest amounts of all resources, including the most important, energy and water. Canadians over the holidays the last two days have been talking about this. They want to hear more,” O’Leary said. “And so there’s obviously a lot of issues and more details, but what this could be is the beginning of an economic union. Think about the power of combining the two economies, erasing the border between Canada and the United States and putting all that resource up to the northern borders where China and Russia are knocking on the door.”

“So secure that, give a common currency, figure out taxes across the board, get everything trading both ways, create a new, almost EU-like passport. I like this idea and at least half of Canadians are interested. The problem is the government’s collapsing in Canada right now,” he continued. “Nobody wants [Canadian Prime Minister Justin] Trudeau to negotiate this deal. I don’t want him doing it for me. So I’m going to go to Mar-a-Lago. I’ll start the narrative. The 41 millions Canadians, I think most of them would trust me on this deal.”

Trump in November threatened to place a 25% tariff on all products from Canada and Mexico unless they do more to curb the flow of illegal immigration and drugs entering the United States, with the Canadian government subsequently boosting its border security apparatus. Trudeau also met with Trump at his Mar-a-Lago residence following the president-elect’s threat.