IDEAS home Printed from https://ideas.repec.org/a/ctf/journl/v71y2023i4p1111-1124.html
   My bibliography  Save this article

Policy Forum: The Thresholds Set for Automobiles—Are Tax Policies Outdated in Light of New Challenges?

Author

Listed:
  • Annick Provencher

    (Faculty of Law, University of Montreal)

Abstract

The Income Tax Act has often been criticized for its complexity and arbitrary distinctions. This article offers a reflection on two of these arbitrary thresholds related to automobiles: (1) the personal-use limit of 20,004 kilometres, to reduce the standby charge benefit; and (2) the ceiling for the capital cost of an automobile for the purposes of calculating the capital cost allowance. The article traces the historical evolution of these thresholds and argues that they may no longer align with their original tax policy objectives. The 20,004-kilometre limit, introduced to address situations of minimal personal use, seems to have deviated from this objective. The capital cost limit, designed to prevent the financing of luxury cars with public funds, raises questions about its sufficiency after years without adjustments. The author suggests that environmental considerations were likely not considered when these measures were introduced. In this context, she proposes that policy makers reconsider measures related to automobiles to account for social, economic, and environmental changes, especially considering Canada's emphasis on reducing greenhouse gas emissions.

Suggested Citation

  • Annick Provencher, 2023. "Policy Forum: The Thresholds Set for Automobiles—Are Tax Policies Outdated in Light of New Challenges?," Canadian Tax Journal, Canadian Tax Foundation, vol. 71(4), pages 1111-1124.
    • Handle: RePEc:ctf:journl:v:71:y:2023:i:4:p:1111-1124
    DOI: https://doi.org/10.32721/ctj.2023.71.4.pf.provencher
    as

    Download full text from publisher

    File URL: https://www.ctf.ca/EN/Publications/CTJ_Contents/2023CTJ4.aspx
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.32721/ctj.2023.71.4.pf.provencher?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctf:journl:v:71:y:2023:i:4:p:1111-1124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jim Lyons (email available below). General contact details of provider: https://www.ctf.ca/EN .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.