LAW: The Impact of the United States on Canada`s Tax Law Policy and the “Brain Drain”

CANADIAN TAX RATES AND BRAIN DRAIN TO U .S .A

S .NO HEADING PAGE NO 1 INTRODUCTION

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2 CANADA ATTRACTS STUDENTS FROM U .S

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3 TAX REFORMS OF CANADA 6

4 NEED FOR TAX REFORM 7

5 TAXATION IN CANADA : 8

6 COMPARISONS OF FEDERAL INCOME TAX RATES FOR 2007 FOR INDIVIDUALS : 11

7 PROVINCIAL AND TERRITORIAL PERSONAL INCOME TAXES 12

8 CANADA 'S CORPORATE INCOME TAX 13

9 COMPARISON BETWEEN USA AND CANADA 15

10 IMPACT OF BRAIN DRAIN FROM CANADA 16

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JUDICIAL DECISIONS ON TAX ISSUES 20

12 CONCLUSION 22

10 REFERENCE 24 1 . INTRODUCTION

Canada , with one-sixteenth of the world 's land area and probably more than one-sixteenth of its natural resources has as yet only about one -half of one percent of the world population , the part which the immigration is destined to play in the future development of the dominion

Canada is a constitutional monarchy with 10 provinces and 3 territories and it is a federal state with a democratic parliament

It is interesting to analyze the following data

COUNTRY

ESTIMATED POPULATION

AREA ( IN SQ MILES CANADA

30 ,007 ,094 (2001

3 ,851 ,787 sq .miles The brain drain is the current hot in Canada . [Wayne Kondro] Students after finishing their education in Canada are migrating to the U .S mainly on the reason that they can obtain good salary and standard of living in U .S . There are two reasons attributed for the brain drain from Canada . High salary and standard of living in U .S and high rates of income tax at Canada are the two reasons for the brain from Canada

Though , Canada is attracting more people from Europe and Asia by way of immigration , simultaneously it also witnessing exodus of skilled labour to U .S .A mainly due to tax advantage and savings potential . The exodus has become more prevalence since the free trade agreement [FTA] and after the implementation of the North American Free Trade Agreement (NAFTA

Brain drain of highly skilled professional and entrepreneurs in a large scale is a matter of concern . The flow of high end professionals from Canada to U .S .A is influenced by the yawning gap between U .S and Canadian incomes - a fissure that can be plugged only if Canadian productivity nurtures faster than Americans . Both the previous and present Canadian government has seized of the problem and taking concrete steps to reduce this brain drain . Further , recent study shows that most exodus to USA is taking place under NAFTA temporary work visa

Canadians are proud and enjoy in paying higher taxes to Canadian government than Americans as they feel that they receive back more valuable government services in return . But , of late , Canadian health care systems are in deteriorating condition as far as service to the consumer is concerned . If the Canadian government has not taken any positive steps , it may augment brain drain as the creamy layer may be of the opinion that they are paying higher...