Ceo stock option tax loophole
Mar 20, 5: Mar 20, The stock option deduction is a tax break for employees that critics say largely benefits wealthy corporate executives. Sophia Harris Business reporter sophia. Sophia Harris has worked as a CBC video journalist across the country, covering everything from the start of the annual lobster fishery in Yarmouth, N.
She now has found a good home at the business unit in Toronto where she produces for national TV news and writes and shoots and edits video for CBC. The federal Liberal Party at one time agreed. As part of its campaign promise "to target tax loopholes that particularly benefit Canada's top one per cent," it pledged to cap the stock option deduction.
During the election, the Liberals pledged to cap the stock option deduction. Howlett and other critics hope that in Wednesday's second budget, Ottawa will finally live up to its election promise and claw back the perk.
Advocates of the perk argue that it encourages innovation by helping startups and smaller companies attract new talent. But most employees who are granted stock options are already pulling in fat salaries, argues David Macdonald, senior economist with the Canadian Centre for Policy Alternatives. The organization is a left-leaning think-tank focused on economic and social policy. A recent study by the Centre for Policy Alternatives reported that in , about 99 per cent of the benefits from the stock option deduction went to Canada's top 10 per cent of income earners.
In a second study on CEO salaries, the organization reported that among the highest paid CEOs in Canada in , 75 received stock options as part of their pay package. Top earners included Hunter Harrison, then the CEO of Canadian Pacific Railway. Howlett says the government could protect smaller businesses by capping the amount that is taxed at the lower rate, instead of axing the lower stock option deduction altogether.
Then in March, according to the Canadian Press , Finance Minister Bill Morneau halted the plan, stating that he was informed by "many small firms and innovators that they use stock options as a legitimate form of compensation for their employees. CBC News asked the government why it backtracked on its plan to cap the stock option deduction. As part of its commitment, the government is reviewing the tax system as a whole "to ensure fairness, simplicity and effectiveness," she said.
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Stock Options: The Billion Dollar Tax Loophole | Canadians for Tax Fairness
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About The Author Sophia Harris Business reporter sophia. Related Stories Canadian innovators worried about planned changes to stock-option rules Shopify CEO asks Liberals to abandon tax plan for stock options Budget math: How much is that tax credit in the window?
Canada's richest CEOs will make your entire annual salary before you have lunch today. That's one reason many critics would like to see the deduction eliminated. Report Typo or Error Send Feedback. Uber co-founder Travis Kalanick steps down as CEO: NYT June 21, 2: Video Tims lawsuit 5: Watch The Exchange here.
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