My Thoughts on the Liberal’s Proposed Tax Changes

My Thoughts on the Liberal’s Proposed Tax Changes

tax changes

I have spent considerable time reading through the draconian proposed tax changes and can only reach one conclusion; the current Liberal government is spending us down the river and are desperate for revenue. Our Prime Minister’s quote that “Budgets will balance themselves” rings rather hollow now. Where better to make a tax grab but from all the “rich” middle class folks who own businesses or farms. (The “rich” middle class who are not part of the 1% that he campaigned on). Now, Justin Trudeau and Bill Morneau seem to talk about the middle class with disdain, sighting “income sprinkling” and the numerous other tax “dodges” we are all accused of taking advantage of.

I have owned two businesses in the 47 years I have lived in Canada. First as partner in a farm equipment business in Grande Prairie. For the last 20 years I’ve worked as a financial advisor in Central Alberta. I came here from Great Britain in 1970 at the age of 22 for the great opportunity that I knew Canada could offer me and have never looked back or ever regretted that decision.

That being said, I do have huge issues with the proposed changes. The first issue I have with this whole process is it seems to be designed to agitate and encourage class warfare. Looking through many comments about the proposed changes I am fearing that most do not understand the draconian impact these changes will have on small business owners and ultimately on their own personal job security. It’s very simple; take away incentives for professionals and entrepreneurs to set up businesses in Canada and they will move south to our more tax friendly neighbour.

The second issue is only allowing 75 days for consultation and review of the proposals. The fact that the time frame coincided with many people’s holidays or harvest time is an affront to the whole process. Any major proposed changes to our tax act should have at least a full year allowed for any consultation process.

Much was said in the run-up to the election and since about “Looking out for the middle class” and a business tax cut was discussed but never delivered. We currently have an integrated tax system. This means that a dollar earned by a wage earner as compared to a dollar earned inside a corporation will net about the same amount of after-tax income. The benefits for a corporation are a level of creditor protection for the shareholders and the deferral opportunity with money held in the corporation at the low business tax rate.

Consider that small business owners employ over 70% of Canadians. Small businesses take the risks, pay the bills, make sure employees are paid, and put in countless hours beyond a nine to five work day. On top of this, many business owners are not making as much net income as their employees. Small business owners do this because they love the freedom and independence that owning our own business gives them.

It’s very easy for the Liberals, NDP and Greens to vilify small businesses as money grabbing capitalists, but the significant income disparity talked about is with the 1% ultra-wealthy. The reality is that this is an unprecedented attack on the middle class of Canada, insulting our intelligence in the manner it was presented. This could tip our great country into a very serious economic recession.

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