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Tax Hikes Ahead? Corporate & Wealth Planning 2025

Tax Hikes Ahead? Corporate & Wealth Planning 2025

Tax Hikes on the Horizon? How to Plan for Potential New Corporate and Wealth Taxes in North America and Europe

rising tax bills in North America
  • Research suggests that while no major corporate tax hikes are locked in for 2025, proposals in the US could push rates up to 28%, and global minimum taxes might affect big firms everywhere.
  • It seems likely that wealth taxes could expand, with new ideas in Canada targeting those with over $10 million in assets, 
  • and Europe already taxing the super-rich in places like Norway and Spain. Evidence leans toward proactive planning being key, such as using trusts or charitable giving, to soften any tax blows without assuming the worst.
  • There's controversy around these changes—some see them as fair for funding public needs, while others worry they might hurt investment and growth.

Imagine opening your mailbox to find a bigger tax bill than expected, all because governments are looking for ways to balance their books after tough economic times. With whispers of higher taxes on companies and wealthy folks in 2025, it's natural to feel a bit worried. But don't panic—many of these are just proposals, and smart planning can help. In this post, we'll break it down simply, like explaining to a 10-year-old why saving pocket money matters.

What Might Change for Corporate Taxes?

Companies might face higher costs if rates go up or new rules kick in. In the US, the current 21% rate could stay, but some want it higher. In Canada, things look stable, but global rules add pressure. Europe has varying rates, with a new minimum tax affecting multinationals.

Wealth Taxes: Targeting the Rich?

Wealth taxes focus on what you own, not just what you earn. The US has ideas for taxing big fortunes, Canada proposes rates starting at 1% over $10 million, and Europe already has them in a few spots.

Simple Planning Tips

Start with easy steps like maxing out retirement savings or giving to charity. For businesses, choose the right structure. Always chat with an expert.

As governments across North America and Europe grapple with budget shortfalls, rising debt, and calls for fairer systems, discussions about tax hikes have intensified. While nothing is certain—many changes are still proposals or depend on politics—the landscape in 2025 shows clear signs of evolution. This comprehensive overview draws on recent data and expert insights to explain potential shifts in corporate and wealth taxes, backed by facts, stats, and real-world examples. We'll use simple language to make it accessible, like chatting over tea about why sharing toys (or wealth) can be fair but tricky.

We'll cover the current state, proposed changes, and practical strategies, including how companies like John Deere have navigated taxes in the past. Remember, this isn't advice—consult a professional for your situation. For more on related topics, check our internal guides on Estate Planning Basics or Investment Strategies for Uncertain Times. Authoritative sources like the OECD's global tax page

and Tax Foundation reports provide deeper dives.

Understanding Corporate Tax Changes in North America

Corporate taxes fund public services, but hikes can make running a business tougher. In 2025, North America isn't seeing sweeping increases yet, but pressures from global rules and domestic debates are building.

United States: Steady Rates with Expiring Perks

The US corporate tax rate sits at 21% in 2025, a permanent drop from 35% under the 2017 Tax Cuts and Jobs Act (TCJA). This change was meant to boost competitiveness, but it has cost the government about $1.3 trillion in lost revenue from 2018 to 2027. No immediate hike is set, but if Congress doesn't act, some TCJA perks like the pass-through deduction (letting business owners deduct 20% of income) will expire in 2026, effectively raising taxes for many.

Proposals vary by politics. Some Democrats push for a 28% rate to fund social programs, while Republicans, including former President Trump, suggest dropping it to 15-20% for US-made goods. A recent tax bill floats $6 trillion in cuts offset by $2 trillion in increases, affecting sectors broadly. Take John Deere as an example: In 2018, the company earned $2.15 billion but got a $268 million tax rebate, thanks to smart planning under lower rates. Their effective rate was negative, showing how deductions and credits can slash bills—even amid hikes, strategies matter.
US Corporate Tax Key Stats (2025)
Current Rate: 21% (permanent)
Pre-TCJA Rate: 35%
Revenue Loss from TCJA: $1.3T (2018-2027)
Average Annual Corporate Revenue (2018-2024): $342B (1.39% of GDP)

Canada: Stable but with New Twists

Canada's federal corporate rate holds at 15% after reductions, with a basic 38% minus abatements. Provinces add their own, but 2025 sees minor tweaks, like Nova Scotia dropping its small business rate to 2% from 2.5%. No big hikes, but the 2024 Fall Economic Statement reinstates incentives for clean energy and manufacturing.

Global influences loom: Canada adopted the OECD's 15% minimum tax for multinationals with over €750 million in revenue, effective for fiscal years starting after December 2023. A Digital Services Tax (DST) hits tech giants retroactively from 2022, potentially raising billions.

Practical tip: If your firm imports, note the new CARM system for customs, which could increase admin costs. For small businesses, explore expanded SR&ED credits for R&D.

Corporate Taxes in Europe: Diversity and Global Alignment

Europe's patchwork of rates averages 21.5% in 2025, below the global 23.5%. Highs include Malta at 35% and Germany at 29.9%; lows like Hungary at 9% attract investors. Recent hikes in Czechia (to 21%) and Slovenia (to 22%); Portugal dipped to 30.5%.

The big shift: OECD Pillar Two's 15% global minimum, now in force in many EU nations, targets profit shifting. By 2025, 90% of in-scope multinationals face this, with the Undertaxed Profits Rule (UTPR) kicking in. The EU proposes a new tax on firms with turnover over €50 million to boost budgets. Example: A US firm operating in Ireland (12.5% rate) might pay top-ups under Pillar Two if effective taxes dip below 15%.
European Corporate Tax Rates (Select 2025)
Highest: Malta (35%), Portugal (30.5%)
Lowest: Hungary (9%), Bulgaria/Ireland (12.5%)
Average: 21.5%
Changes: 5 countries increased, 1 decreased

Wealth Taxes: A Growing Focus on Assets

Wealth taxes hit net worth—houses, stocks, savings—beyond income. They're controversial: supporters say they fight inequality; critics fear flight of the rich.

North America: Proposals vs. Reality

In the US, no federal wealth tax exists, but 2025 budgets float ideas like a 25% minimum rate on households over $100 million net worth, plus doubling capital gains to 39.6%. Project 2025, a conservative plan, cuts taxes for the top 0.1% by up to $2.4 million while raising them for the middle class. By 2029, low-income folks might see hikes if TCJA isn't extended.

Canada's proposal: 1% on wealth over $10 million, 2% over $50 million, 3% over $100 million, affecting 0.6% of families. It could raise $39 billion yearly, funding housing and care, with 80-90% public support. Counterarguments: Potential avoidance, but global reporting helps enforcement.

Stats: Top 1% hold 24-29% of Canada's wealth; a tax could generate $495 billion over 10 years.

Europe: Established but Limited

Only three countries tax net wealth: Norway (1% over NOK 1.7M, 1.1% over NOK 20M), Spain (0.16-3.5% over €700K, plus solidarity tax 1.7-3.5% over €3M), and Switzerland (cantonal rates vary). France eyes a 2% tax on over €100 million, backed by economist Gabriel Zucman. Denmark might lead on a super-rich tax amid G20 talks.

Example: In Spain, a €5 million estate might pay 1-2% annually, varying by region.
Wealth Taxes in Europe (2025)
Norway: 1-1.1% over €146K-€1.79M
Spain: 0.16-3.5% over €700K
Switzerland: Varies by canton
Proposed in France: 2% over €100M

Planning Strategies: Protect Your Assets Diplomatically

Tax hikes aren't inevitable, but planning shows empathy for all sides—balancing personal goals with societal needs. Here's how, explained simply.

For Corporations

  • Entity Choice: Switch to pass-throughs for deductions, but watch expirations.
  • Credits and Incentives: Claim clean energy or R&D credits; Canada expanded these in 2025.
  • Global Compliance: Use Pillar Two safe harbours to avoid top-ups.
  • Tip: Like John Deere, leverage international structures for lower effective rates, but stay ethical.

For Individuals and Wealth

  • Trusts: Use Grantor Retained Annuity Trusts (GRATs) for asset growth to heirs tax-free if it beats interest hurdles. Example: Fund with stocks expected to rise.
  • Charitable Giving: Donor-advised funds or Charitable Lead Trusts (CLTs) cut taxes while helping causes. Give appreciated assets to avoid capital gains. 
  • Retirement Maxing: Convert traditional IRAs to Roth for tax-free growth, ideal for low-value assets with potential.
  • Family Loans: Lend to relatives at low rates instead of gifting, saving on transfer taxes.
  • Asset Allocation: Hold tax-efficient investments; explore family offices for holistic management.

Bullet tips:

  • Review withholdings yearly.
  • Plan successions for family businesses.
  • Consider relocation to low-tax spots like Hungary, but weigh lifestyle.
  • For controversy: Wealth taxes might reduce inequality but could slow growth—studies show mixed effects, so hedge bets.

In conclusion, while tax hikes aren't guaranteed, 2025's proposals highlight a push for fairness amid economic pressures. Stay informed, plan ahead, and consider consulting a tax advisor today to safeguard your future. What are your thoughts—share in the comments!

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