You probably know someone who drives a car bought or leased by their employer. Company cars are usually perks. But this perk may actually be more of a burden. Under current tax rules, employees who receive company cars pay additional income tax based on the cost of the vehicle. Since the tax rate is the same across the board, a gas-guzzling SUV is taxed at the same rate as a fuel efficient car.
“Tax shifting” is used to describe taxing environmentally destructive activities while rewarding environmentally beneficial activities. One tax shift proposed by the David Suzuki Foundation on company cars would reduce fuel costs for businesses and employees, and cut down on pollutants.
