Fair is fair

More on Justin’s historic slitting and gutting of the entrepreneurial class or, as he calls it, “fairness.”

First a word about the comment section which two days ago turned into the equivalent of a coked-up knife fight among rival biker gangs (of accountants). As regular addicted readers will know, we recently debated whether the steerage area of this blog was out of control and needed cops, filters or just a muzzle. You offered your thoughts. They were analyzed by a crack team of advisors (thanks, Bandit) and a conclusion was reached. The comments stay. There’ll be no tiered responses and no ability for people to pile on a single poster. No Trumpian bullying. No registration form, either. All deplorables may stay anonymous. And the membership fee remains the same. It’s tax-deductible.

What did thus week’s debate here show? Simply, that the above works.

Yeah, a few moronic comments were deleted, some salty language was cleansed and a number of flagrantly stupid posts deserved a rectifying footnote. But the debate here – of those who think T2’s assault on doctors, plumbers and IT guys is outrageous, and those who believe everyone should be an employee, all dollars are equal and successful folks are tax criminals – was healthy. The formal is chronological, as opposed to logical. Readers can scroll through a variety of thoughts from a wide cross-section of people – those making $26,000 to half a million, from commies to tories. Thus it shall stay for a while. Just don’t threaten me or I’ll sulk.

Meanwhile there are 35 days remaining in the seventy-five day summer consultation period the Department of Finance has declared before the tax rules on small business are drastically altered. This week the Bill-what-the-hell-are-you-doing? campaign kicked into high gear with finance minister Bill Morneau being besieged with taxpayer letters, accountant protests and lobbying efforts from farmer groups to manufacturers. Suddenly the issue of ‘fairness’ doesn’t look so fair through the eyes of those whose ox is about to be gored.

This is worth a second post this week. So here’s is what two of you had to tell our government:

From James, in Oakville:

Hey Bill: I quit my job at age 36 when my wife was 6 months pregnant with our first child to start a business.  Borrowed no money from the bank, doubtful they would have given me any with no University degree and no 50 page business plan.  But with a lot of hard work and lean times my business partner and I have built a pretty successful business over the last 10 years.  We now employ over a dozen staff and are continuing to slowly grow.  We pay a LOT of taxes.  Six figures of payroll remittances every month, six figures of HST every quarter, over $50k of EHT a year, $24k in property tax every year (we bought some office space rather than paying rent and struggled taking less personal income for 6 years to save a down payment).  We each pay a huge pile of personal tax each year –  $161,683.84 myself in payroll deductions YTD plus another $33,398 in tax installments.   I will likely end the year somewhere around $225k in personal tax.  Never mind that I will pay another $40k in HST on all the things we buy to live our lives.  Thank goodness the wife discovered boxed wine recently Bill, that LCBO budget is a killer.

I work a lot of hours as you can imagine.  As a small business I have to look after operations, HR, finance, sales, tech support, recruiting, training and coaching of staff, etc. etc.  My wife left her job two years ago to look after our 2 young daughters because I could not be there as much as she needed me to.  I was too busy trying to be an entrepreneur.  She played a large roll in the start-up of the business – can you imagine many pregnant wives encouraging their husbands to quit their very secure job of over 10 years to start a new business?  She also has been a huge support over the last decade and we talk about the business every single day.  She is full of ideas and helps me very much.  After running this little gig for 9 years we finally got to the point where my business partner and I each opened new hold co’s and just this year started to pay our spouses some dividends as payment for their decade of supporting the start-up and growth of this small business.  You don’t think this is fair apparently.  You don’t feel my family is contributing enough tax to the country apparently.  I will tell you Bill that I think it IS fair that my wife is compensated and that we can save a little tax.  We are already contributing FAR more than our fair share.  Because we took a risk and started a business, the coffers of CRA see a couple of million dollars a year in extra taxes.  We have no pensions, I am not covered by employment insurance.  I pay $5,000 a year for disability insurance and what do you think will happen to this business if something happens to me Bill?  There was a massive amount of risk starting this business.  What are the rewards?  Long hours?  Stress?  Never taking a single vacation in 10 year without my laptop and phone and several hours of work every day, 7 days a week?  Oh there was a small reward with spousal dividends we just started taking advantage of but you don’t feel that is fair.

My thoughts today are that I will probably just give up trying to grow this business much from here.   My wife and I have always lived beneath our means.  We gave up a lot of luxuries in live to avoid debt and we paid off our mortgage 7 years ago.  We live in house we paid $580,000 for Bill, no swanky mansions with housekeepers for this small business owner.   We always maxed out our RRSPS and have built a decent little nest egg so even with no fat government pensions I guess we will be ok.  No French Fry money for this guy.  Just a lean paycheque eviscerated by the liberal tax machine.  No trips to Paris, private yachts or helicopters for us Bill.  My wife has a nice Hyundai if you ever need a lift.

From Aman, in Vancouver:

Hi Bill: I’m a business owner and am now, after years of toiling, I am considered to be a high income earner.  I have no pension, no benefits, I took one vacation day off last year because I have no other choice, and I work at least 50 hours per week.   Funny thing is, I don’t feel wealthy or a high earner.

Like tens of thousands of other businesses owners across the country, I pay a tremendous amount of money that benefit other Canadians through salaries to employees,  payments to Canadian suppliers and service providers, regulatory fees to Canadian institutions, and taxes to the Canadian government. No one with an even rudimentary understanding of economics would argue against the benefit that Canadian small businesses have on the economy.

Your new tax proposals are at best discouraging to the entrepreneurial spirit and at worst punitive to those that do so much for the country and have the smallest safety net possible.  I believe your proposals have not recognized that many successful business owners also have failed business under their belt too, or years of student debt and personal capital sacrificed for a dream that benefits all Canadians. Often times small business ownership is forced upon individuals due to a modern trend towards hiring individual contractors as opposed to full time employment (A practice that is alive and well in the Canadian public sector as well)

It is important to emphasize that the entrepreneurial dream that small businesses provide is also one that welcomes all people – there is no gender, ethnic, or other exclusive membership that prevents one to become a business owner.  For a government that prides itself on equality, most would argue that the open path to small business ownership has been the only truly unhindered way for people to receive equal opportunity to achieve their respective economic dreams.

I understand that under the banner of “fairness” these tax rule changes were conceived.  But they are just the opposite.  They are unfair to those who go without rich public sector pensions, unfair to those that take on a tremendous amount of risk while putting food on the tables of many other Canadian households.    Worst of all it is an assault on the incentive to enter one of the only paths that promotes true economic fairness for all.

Please rethink this or I, as well as millions of others that value small businesses, will be responding with our vote.

For or against, you should be part of this conversation, and respond to the feds before the next round of tax changes are carved into stone.

Here is the much-criticized Bill Morneau document on “fair” changes to the way small business are taxed.

And here is how to reach the minister: [email protected]. You can find your own MP’s email here. And here is a picture of puppies. Choose wisely.

290 comments ↓

#1 trexx on 08.29.17 at 5:45 pm

42.5% of all Canadians income now services taxes.
Go JT, go.

#2 Trading Naked on 08.29.17 at 5:48 pm

#154 MF on 08.29.17 at 10:04 am

You’re just posterior-hurt about TIMING. What I’m about to say to you, I usually say to a Boomer (my parents!), so I can’t believe I have to say it to Millennial, too, but here it goes:

The ROI on prudence and diligence has dropped over the last 40 years. And that’s not your fault. We, good people that we are, want to get a decent ROI on whatever hard work we can squeeze out of ourselves in the 24 hours we have each day. We want to be personally responsible for our destiny. When we watch our parents get a certain ROI for their efforts, we want the same for ourselves. (Example: my parents have done quite well for themselves just by being diligent, disciplined, and thorough, with no real need for innovation and creativity, and they’re all posterior-hurt that I have to put on my ol’ thinking cap just to achieve the same results they got. World’s changed – sorry!) But in this globalized world (of which Canada’s real estate market is one result), we are in less control of our financial destiny than my parents were. Our job is just to do our best.

I was talking to a late-stage Boomer the other day who was moaning that his daughter would probably never be able to buy real estate. And then he made a joke about his daughter wanting to give him a push when he’s at the top of the stairs. Why are Millennials so hung up on buying, and why are their parents so hung up on wanting them to be able to buy?

Because ultimately, we all want to be aristocrats. Who doesn’t, right? Of course we aspire to be above that line. My friend in China works in middle management (his job is a blur of PowerPoint presentations and meetings…some of them out of town that he has to pay for out of his own pocket because that’s how they do things in China. You know how at McD’s you get one free meal per shift? Not in China.) at the municipal waterworks of a suburb outside Guangzhou. And of course he’s prudent with his finances; it’s cultural. And even he needed help from his parents to scrape together a down payment for an apartment for his family. That’s all he could afford. When we told him that most immigrants to Canada 40 years ago bought houses just because that’s what everybody did, his eyes widened and he said, “oh, so most Canadians of that era had villas?” Yeah, that’s what they call SFH’s over in China – VILLAS. That architecturally questionable multi-million dollar thing overlooking the water in West Vancouver? “Villa.” Garth’s cute little place in Nova Scotia? “Villa.” We want to be emperors and empresses presiding over that villa. It’s natural.

But what if we can’t? You are raging against a machine that is way bigger than your super-awesome intellectual capabilities and industriousness. You will lose. Most of us will lose. Some aristocrats will win.
But is it the end of the world? Renting sucks, yes. It sucks that shelter – a basic need – comes with sucky hurdles that weren’t there before. But we can put our heads together and find alternatives. There is always an alternative. We just have to do our best and manage our expectations.

#3 Tax Morneau, Trudeau and Poloz on 08.29.17 at 5:52 pm

When will the Sunshine List employees who preach about Gender Equality pay their fare share?

What a mess of double standards that entrepreneurs are penalized while Sunshine List parasites do not want to pay their fair share.

Why should I pay more tax to fund upper-middle class Gender Equality initiative pet projects for upper-middle class Sunshine List workers living mainly in downtown Toronto (incl. Rosedale & Bridle Path), and also in Westmount Montreal?

#4 Doger on 08.29.17 at 5:57 pm

I do not feel sorry for for the self employed as I am one myself, quit crying and suck it up buttercups as you voted liberals

#5 Renter's Revenge! on 08.29.17 at 5:58 pm

The left is not going to listen to the people. The left already knows what is best for the people.

#6 Mike on 08.29.17 at 5:59 pm

Garth,

You keep giving examples of real business owners. But problem is those professional corporations which pretend to be business owners when they are not.

Doctors – They are not small business. They are individuals. They generate ZERO jobs(except clinic owners who are small business). All they do is use the small business shield to avoid taxes. Why can they sprinkle income with family?

Now, you say they don’t get pensions, benefits(actually they have RRSP and TFSA rooms – which they top up for sure), but that is no excuse to make paychecks for family members who are NOT part of business. They can ask for more reimbursement for seeing patients, and if they dont get it – they can strike. Thats how employees get their rights, by constiution. Not by issuing fake paychecks and getting income as dividends.

Talking about business owners taking risks – do employees not take risk? You have brought up Sears, Nortel plenty of times yourself. And the list can go non stop……

#7 Deb on 08.29.17 at 5:59 pm

Let’s be honest – Bill Morneau doesn’t need to be convinced it’s a bad idea, he just needs to know that many Canadians fall for it – “tax the rich” “tax fairness”. So many people just get hung up on someone’s gross salary or business income without understanding full employee costs, costs of risk, etc.

#8 Spoy on 08.29.17 at 6:00 pm

At least the Vancouver market is slowing down
July Average Price Change: -0.4%
August Average Price Change: -2.43%

as per ( http://www.myrealtycheck.ca )

#9 mbucky32 on 08.29.17 at 6:03 pm

Like all empires, they eventually must crumble – usually due to over taxation, usually to support a large war machine. Much like the Roman Empire went to dust.

People see cycles, in life, companies and nations. We have reached peak stupidity in government globally and now we’re seeing the hunt for taxes under the guise of “fighting terrorism”. It’s due to governments being broke and wanting to squeeze every last nickle.

It’s also why you have civil unrest globally, whether its the upset of the PC’s in Alberta after 44 years of reign, Blue lives Matter, BLM, Antifa, mass migration/immigration its all tied to civil unrest as a result of government overreach.

Sad, but predictable times. We humans never learn.

#10 Mike on 08.29.17 at 6:03 pm

.
…..and even employee’s spouses give up their career to raise kids. No point there.

I make 100k+ as employee. Private firm. Work 40+hrs a week. Spouse gave up career to stay with kids. Job is risky, who know when next round of layoffs come.

Why can’t I get to pay dividend tax rates and sprinkle income? It is all about fairness Garth.

#11 Gentle ,Loving Kindness on 08.29.17 at 6:05 pm

The taxes proposed by the Liberals have nothing to about fairness. This is pure math politics. The snowflake millennials are now a larger voting block than the boomers. Therefore, suck up to the millennials and throw the entrepreneurs under the bus.

#12 Dave on 08.29.17 at 6:07 pm

Its time for Canadians to learn about Libertarianism. Our reaction to bad government is to elect the bad government we got rid of eight years earlier and then we wonder why things get worse.

As Governor of New Mexico, Gary Johnson was praised for having the highest job growth of all 50 governors. But during his 2012 campaign, he said, “I didn’t create a single job.” That’s because entrepreneurs, businesses, and a supportive economic environment did. Johnson’s small business policy is simple: implement a regulatory and tax environment that makes it fair and easy to start businesses and create jobs. Government regulation should be used to protect the American people from bad or unfair business behavior. But it shouldn’t get in the way.

#13 Money Miser on 08.29.17 at 6:21 pm

The first guy pays $225,000 in personal tax and implies he’s going to struggle because of this minor tax change? He must be a multi millionaire with that kind of salary. No sympathy from me!

#14 Keith on 08.29.17 at 6:25 pm

James’s stories:

If what you say is true, and you spent $40,000 in HST on
“all the things we buy to live our lives.” Wow. Ontario HST is 13% so in a year that’s $307,000 and change in lifestyle expenditures. Not a bad life. Then there’s “always maxed out RRSPs.” For ten years. Those making five figures year as a family should be so lucky.

“I will likely end the year somewhere around 225k for personal tax.” “Just a lean paycheque eviscerated by the liberal tax machine.” No european holidays, wife drives a Hyundai.

Garth, I think James needs to revise his story, I can drive a truck through the inconsistencies here.

#15 Debtslavecreator on 08.29.17 at 6:27 pm

Socialism
What else did you expect ? And these are still good times. When the sovereign debt crisis hits here within 3-4 years the emergency budgets will start and then the real fun begins
There is nothing more dangerous than a broke government and the large and growing army of financial illiterates who will scream for their “promised ” benefits
and some politicians will come along who will pander until the system completely collapses
The game now is to FIND any excuse to steal
It will continue to worsen
Those few who survive the crazy feed, taxes , seizures, and other confiscation actions will see their savings and income ravaged by accelerating currency debasement
Stagflationary depression
That’s what central banks and corrupt governments bring you every time without fail

#16 Mark on 08.29.17 at 6:27 pm

“We pay a LOT of taxes.  Six figures of payroll remittances every month, six figures of HST every quarter,”

I’d merely point out that the business owner here in question is not paying the taxes. Payroll remittances are paid by the employee. HST is paid by the customers. The employer merely acts as a collection agent on behalf of the government, not the actual payor.

“I will likely end the year somewhere around $225k in personal tax.  Never mind that I will pay another $40k in HST on all the things we buy to live our lives.  Thank goodness the wife discovered boxed wine recently Bill, that LCBO budget is a killer.”

So this guy spends $250k+/year to live his life (as evidenced by his claim, yet he’s crying poverty? Business owners damage their own credibility and case for action by embellishing. Most Canadians live quite fine on a mere fraction of the spending power, and don’t have to resort to buying boxed wine at the LCBO.

#17 Entrepreneur on 08.29.17 at 6:27 pm

I am sure glad we have elections. The only thing left for the people of a nation.

I have to agree #3 Tax Morneau, Trudeau and Poloz…and be role models and pay your fair share and not hiding it. Come on, be responsible and lead us way. Or is it do what I say not what I/we do?

I like to see small business flourish here in Canada. And too bad they are not getting the support from their own government.

Is it because they do not need us anymore, globalization and automation? More interested in supporting the public sector?

But they have forgotten that we, the people of the nation, are in numbers and have elections.

#18 TraderX on 08.29.17 at 6:28 pm

So important to PROTEST this… I’ve been both a business owner and an employee. We need small business to have as much incentive as possible, they are the real economy!

#19 Move Up Buyer Fuel on 08.29.17 at 6:30 pm

“What’s really interesting is the gap right now between a house and a condo. In many cases, I don’t think I’ve ever seen it this small,” Ms. Houlihan says. “Previously, if you wanted to move from condo to a house it was a stretch. But now people are getting so much money from a condo they can move into an entry-level house. Condos are getting stupid prices.”

https://beta.theglobeandmail.com/real-estate/vancouver/mouldy-mini-mansions-pricey-average-homes-vancouver-house-hunting-is-a-wild-ride/article36091411/?ref=http://www.theglobeandmail.com&

And that was exactly what BC’s Home Buyers Program was intended to do – jack prices up on condos to allow move up buyers. The condo market was dormant and not moving and the step on the property ladder to SFH ownership was removed.

Along comes the loan program giving you 38k up to 750k and magically prices go up. A well constructed initiative…

#20 rainclouds on 08.29.17 at 6:31 pm

I omitted copying my MP, the always entertaining yet completely irrelevant Hedy Fry in my missive to the Finance Minister. Based on past attempts at correspondence She is way too busy to be responding to little people. Her main talent is being pompous.

In my dream world the mainstream media will give this subject the deep dive and hold the Grits feet to the fire so we can rest easy and sip mint juleps on the back patio till after Labour Day……I know, delusional.

Since it isn’t just a nightmare, AND the press is useless. I sure hope Andrew Scheer takes this to the house and the Cons spend time hammering the government on this issue.

Already had enough of Selfie Boy and his band of Progressives. Conrad Black had a great article in the Post on the weekend

http://nationalpost.com/opinion/conrad-black-canada-suffers-from-unimaginative-government-heres-some-radical-ideas

#21 Ana on 08.29.17 at 6:32 pm

Re: #6
Why would a doctor NOT be considered a business for tax purposes? They have clinics, usually staff, and many overhead costs. They have professional services they are offering…just because they bill the government (OHIP) for their services vs the patient individually doesn’t mean that they don’t run a business like environment. Would you say an accountant who has 1 administrator doesn’t run a business? Or a dog walker? Or an electrician? The business world includes ‘services’ not just goods that someone sells. And I am not a doctor – but felt that your statement deserved a response. Google the definition of ‘business’ if you need to.

#22 CDH on 08.29.17 at 6:32 pm

I went with puppies. Much happier having done so.

#23 Goldie on 08.29.17 at 6:33 pm

Right on Garth! At a time when online censorship is ramping up to previously unseen levels outside of Russia or China, it’s nice to know there is still a little corner of (lightly moderated) free speech still surviving. It’s the right choice sir.

As for Justin, what can I say that hasn’t already been said? Not good things, that’s for sure.

#24 Greed on 08.29.17 at 6:35 pm

Wrote to Bill the other day telling him to stay strong in the face of these whiners.

Becoming an entrepreneur is for people who want to be their own boss, not people who want to exploit the tax system. If your reward is completely extrinsic don’t start your own business. Sorry to say, you bit the greed bug so you could count virtual numbers instead of living life experiences you seem to wish you would have taken. If you really hate employing those people so much and having a martyr syndrome type life, maybe sell the business to the workers and to travel/realise the world doesn’t revolve around you.

Or keep doing what you’re doing because you enjoy it, and invest in your TFSA, and pay yourself an RRSP. I’ve run my own business, paying myself let me contribute to my RRSP and payroll. Didn’t feel like it was ethical to withhold taxes by keeping it in the corp, even if I was working harder. You guys (and Garth it seems) are a bit greedy. By the way, life isn’t harder for you. You’re not special. If no-one told you yet. ;)

#25 Ed on 08.29.17 at 6:36 pm

Just more fodder for Conservatives to mock in the upcoming election.

#26 Fran Deck Jr. on 08.29.17 at 6:38 pm

Communism is not meant to be fair … it is designed to subjugate the proletariates and create dependence on the state. Canada is a postmodern society where ambition and self-reliance are discouraged. This isn’t America.

#27 crossbordershopper on 08.29.17 at 6:39 pm

Canadians are funny, they think they live in a fair country. Canada was set up from the beginning to be run by the elite. The founding fathers in the US, where not the lawyers in PEI who set this “coroporation” called Canada up. Listen, the government came up with the paperwork for this CCPC change, its done, will be in writiing in couple months. if it makes you feel any better to complain and voice your concern about the changes, go ahead. free country right?
anyway, it will be passed as written, and people will pay tax because millions of little people are waiting for your money. They assume you will take it, and pay up, most have in the past. IF you want to leave like me, go ahead, they know some will leave, millions of nieve foreigners are sold on Canada every year, they will simply bring in new immigrants, and keep the ponzi scheme alive.
like i said many times, just go to the USA, at least you have visibility about you operating your life and business with more clarity.
Canada has never been set up to make its people wealthy, real estate going down is part of the scam to keep people poor. The Canadian way, by hook or crook the Canadian government keeps everyone in line.
Canada is not a real country, try not to forget that, i surely wouldnt fight for it in any war or anything, i would laugh, and say take it. Canada is just like my university days, 4 guys from 4 different places all living together in one place for one purpose(go to school). havent seen or talked to them since. Why? Canada has no sole.

#28 Damifino on 08.29.17 at 6:43 pm

#6 Mike

Talking about business owners taking risks – do employees not take risk?
——————————

Nope. I was an employee all my working career. I worked and I received a paycheck. Someone else took care of all the ugly details.

A wage earner is a wage earner is a wage earner.

#29 Jbird on 08.29.17 at 6:46 pm

Sounds about like what’s happening in Canada right now.

https://jonrappoport.wordpress.com/2017/08/29/socialism-thick-lipstick-on-a-global-pig/amp/

#30 Dwilly on 08.29.17 at 6:46 pm

Good other viewpoint on the debate here, with which I largely agree.

http://www.michaeljamesonmoney.com/2017/08/small-business.html?m=1

Like most issues, the right answer is probably somewhere in the middle. We need not gore TRUE small business owners, and I think there’s definitely incremental risk that some of them will give up/walk/whatever.

However I tend to agree that it’s not fair that an INDIVIDUAL who incorporates gets radically different tax treatment. The wife story above sounds good, but as has been stated, my wife could take time off for me while I devote myself to being an executive at a company, and I get no such treatment.

Thought starter, is there a way to separate true small businesses (ie those that genuinely grow beyond one person, create jobs) from an individual corporation of one?

#31 Danny on 08.29.17 at 6:48 pm

Glad to hear the comment section remains as is.
Hopefully most will be respectable in their comments and not resort to Trumpian bullying…as you requested….I am sure many of us to some degree witnessed bullying while we grew up….either being the recipient or the bully themselves.
Also good to know that people of all income levels participate in the comments.
Long live multi-culturalism…..except for the indigenous people we are all immigrants or descendants of immigrants.

This is why Garth…your comment section helps us be less ignorant and more understanding of people’s concern and why your blog makes democracy works…between elections.

#32 mitzerboy aka queencitykidd on 08.29.17 at 6:48 pm

mmmmm puppies

#33 FOUR FINGERS WATSON on 08.29.17 at 6:54 pm

Turdo told us during the election campaign that he was gonna borrow billions and billions and billions of dollars and that the budget would balance itself. He told us that upfront! Now he has to find a way to rustle up some cash to cover all that spending of money he had to borrow. And you guys are surprised ?! Morons.

#34 Indefensible on 08.29.17 at 6:55 pm

These tax measures are just plain indefensible. They are poorly written and ill-conceived. Even IF you agree with the notion that certain professionals are abusing policies that were designed to promote investment and reinvestment in active businesses, the proposed rules throw the proverbial baby out with the bath water.

Between the income sprinkling rules, passive investment holdings and attack on capital gains, there is very little incentive to run a BUSINESS in Canada anymore. You can attack greedy upper middle class professionals with more specific measures against “professional corporations” similar to the “personal service business” rules. Morneau is LYING to the public when he implements blunt tax instruments (virtually unenforceable and vague “reasonableness” tests for every new rule) under the guise of “fairness for the middle class.”

These rules do not achieve nor strive towards fairness for the middle class. They just make it more attractive to work for the CRA than for a start-up.

The ultra-wealthy are INDIFFERENT about “income sprinkling.” They require so much money for personal use that everyone in their family is taxed at the top rate anyways. This will cost them a trivially higher amount of tax. ENTREPRENEURS will pay through the nose.

Why do Canadians eat this shit up? Because he says the right words. He is lying to their face but telling such sweet, sugar-coated lies that they can’t taste the horse shit within.

It’s frustrating that these rules are probably going to get put through, offensively formulated as they are, and we are going to have to deal with the fallout of it long after T2 is immortalized as the hero of the middle class (and the conservatives that come in to clean up his mess get blamed for the ensuing recession T2’s misguided policies cause).

#35 Bezengy on 08.29.17 at 6:56 pm

Note to Canadian voters: The next time some ildealistic person stands before you and promises everything to everyone, please keep in mind someone will need to pay for it, and if you think it will be someone else, you’re probably a Canadian.

#36 Howard on 08.29.17 at 7:00 pm

Have you seen PM Kardashian’s latest selfie-fest?

He showed up at my alma mater, McMaster U, the “help” students move in.

https://www.thespec.com/news-story/7522456-mcmaster-students-get-move-in-help-from-justin-trudeau/

#37 yorkville renter on 08.29.17 at 7:01 pm

Hey MIKE (#6 and #10) – you’re wrong.

Doctors create jobs — does the Dr. answer phones, take blood, schedule appointments, build their own offices, clean their offices, etc..?

Also, as an employee you are guaranteed paid vacation, *some* income if your company goes bust and EI if necessary. Do you have a work-funded pension? How about a benefits plan?

Will you give that up, in the name of “fairness”? Will you let your benefits get taxed in the name of “fairness”?

Also, nothing is stopping you from opening a corp – nothing except your attitude and lack for trying.

Maybe you’ll succeed… maybe you’ll fail.
Most businesses fail before they turn 5.

I wrote my MP two days ago – I’m still waiting for at least the canned response!

#38 Dave on 08.29.17 at 7:05 pm

If it is so horribly bad being self-employed then why don’t these people become employees?

#39 Vancouver's Defiance on 08.29.17 at 7:07 pm

Vancouver Sees Biggest Drop in New Listings In Canada

And the Vancouver market defies all logic once again, and does what every arm chair real estate bull said – owners are pulling listings, which dries up supply, which puts upward pressure on prices.

Every year, its the same things – just when there is a hint of change, the market comes back with a vengeance.

So much for the ‘plunge and collapse of sales’ and the ever teasing ‘price drops around the corner’…

See Vancouver IS different. Oh well, I am sure in a year’s time we will be analyzing why the market did not drop after the rise in interest rates and new OSFI stress tests. Gee, I wonder whatever could it be keeping things afloat…

https://betterdwelling.com/city/vancouver/vancouver-real-estate-sees-the-highest-drop-of-new-listings-in-canada/

#40 Spock on 08.29.17 at 7:08 pm

Garth: You should publish letters from the other side also.

View of jealous folks like Mike.

The letter will go like this – taking inspiration from the movie “My cousin Vinny”.

—–

To Bill,

Whatever that previous guy (James or Aman) said is BS. Thank you.

– A salaried employee who is jealous of business owners including my employer

#41 Dolce Vita on 08.29.17 at 7:10 pm

In the end, it is a MORAL issue.

-Most business start-ups fail & thus are high risk: about 85% survive 1 full year, 70% survive 2 years and 51% survive for 5 years.

-Governments to make business start-ups viable, quickly, have provided a lower taxation rate of 14.4% on average.

-To encourage more business locating/staying in Canada lowered the corporate tax rate to 26.7% on average.

-Business owners do not receive typical salaried employee perks from Government such as EI, CPP, OAS etc.

-Successful business owners have used the above lower business tax rates AND various other low tax income dispersal methods privy to a corporation to shelter income and/or lower its taxation.
_________________________________

The Moral Issue is:

Are lower start-up tax rates enough compensation for the risk undertaken by entrepreneurs?

AND

Should further compensation be allowed to successful entrepreneurs by using corporate tax methods to further lower their personal taxes privy only to a corporation?
_________________________________

The Liberals in their “Tax Planning Using Private Corporations” say the latter issue is immoral when compared to a salaried employee.
_________________________________

I will tell you Garth, the 2 letters you posted do little other than whine about how hard it has been to make a business successful; thus, I deserve more money for this.

Those letters will undoubtedly fall on deaf Ministerial ears and you having been one, should know that.

They provide no compelling reasons other than profit margins are tight, my wife drives a Hyundai and I (really, the corporation) pay you lots of tax already.
_________________________________

And yes, I started up a high tech engineering/manufacturing business during a recession (with a business plan), 0 to 3 yrs: $5.5 MM Revenue early 90s, 7/24 shifts and created about 30 jobs or so.
_________________________________

Entrepreneurs confuse themselves, the individual with the corporate entity, which is another individual to the Government and Tax Person. They think they are

Do what corporate CEOs do and take a salary, stock options and incentives and tax them at marginal tax rates. On average, they still earn more than 200X what the average salaried employee earns.

#42 Dolce Vita on 08.29.17 at 7:14 pm

Last post incomplete sentence.

They think they are, should be:

They think they are 1 and the same, they are not.

#43 Niko Shepherd on 08.29.17 at 7:16 pm

They hypocrisy of it all is that Trudeau (who accomplished nothing outside of riding his father’s name back to 24 Sussex) was a trust fund kid.

Morneau – who at least has an impressive educational background – was a trust fund kid of his father’s company, Morneau Shepell.

Morneau’s wife was a trust fund kid with from the McCain family (McCain foods).

These clowns didn’t even create their family’s wealth – they just benefited from the trust that were set up.

Now, they believe other business owners (of lesser means than them, I’m sure) shouldn’t do the same thing for their families.

“There are three things in the world that deserve no mercy, hypocrisy, fraud, and tyranny.” – Frederick William Robertson

#44 Ponzius Pilatus on 08.29.17 at 7:17 pm

The church sign cracked me up.
I’ll guess we’ll find out how many Methodists are on this blog.

#45 Sebee on 08.29.17 at 7:19 pm

I knew the picture of puppies would anger me. Leashes for each don’t match the bandanas. Outrageous.

Don’t bother complaining about taxes. Automation alone will eliminate millions of jobs. Governments need to shore up tax revenues before the shift hits.

#46 crowdedelevatorfartz on 08.29.17 at 7:20 pm

@#20 Rainclouds

Interesting article from His Lord Blackship.
I agree with most of it.
Unfortunately, as he stated, Canadians are too complacent and happy to “go with the flow” to make radical political and economic changes that would work.

So on Canada’s 200th birthday ( when I’ll be a whiny , toothless, flatulating 106) we’ll all sing “Solidarity Forever” in Mandarin while saluting a Rainbow Flag as the PC police bludgeon the last Newfie seal hunters to extinction.

Viva Canada Ziyou’!

#47 espressobob on 08.29.17 at 7:21 pm

Some individuals push the envelope. Work and study hard to better their lives. Engineers, doctors, business operators, the engines of society are being punished for their accomplishments.

Under this government that sounds about right.

#48 crowdedelevatorfartz on 08.29.17 at 7:24 pm

@#38 Vancouvers defiance

When the drop in listings only lasts for so long…..and if price drops begin to pick up speed…..panic sets in…..then the rush to list…….more panic……more listings……..

Lets see how this winter plays out ’cause methinks the rate rises and the new rules for mortgages are gonna be a huge knacker to the nads for most financially stressed Canucks…….aka 75% of home moaners?

#49 Hello is it me you're looking for on 08.29.17 at 7:26 pm

I’d like to respond to the first quote specifically: why is it that business owners think it was their hard work that is responsible for everything?

#1, this guy clears at least 500k a year and he’s complaining about not making enough.

#2, he makes zero mention of all the people that are working for him making him money. Sorry brother, but those payroll deductions, ei contributions, cpp contributions are all due compensation for them. They do not belong to you. They are a compensation that you pay for employing people that are making YOU RICH. Where’s the gratitude?

#50 Blobby on 08.29.17 at 7:30 pm

I strongly oppose this.

But I’m awful at putting stuff into writing.

I don’t think emailing “I voted for you, and now you’re screwing me over” is going to help much

#51 Cherry Picker on 08.29.17 at 7:32 pm

Pay yourself and contribute to an RRSP like employees – why does that seem unfair?
Giving a salary to a spouse that isn’t working for a company simply to avoid taxes seems unfair.
Avoiding taxes by passively investing in a corporation seems unfair when employees can’t.

I’ll repeat, a much fairer way would be to have a wealth tax and reduce income and corporate taxes for everyone.
But as we all know, fair got nothing to do with this, so suck it up buttercups. It’s your turn. It’s not like the eviserated working class, and castrated unionists haven’t had theirs.

#52 Dolce Vita on 08.29.17 at 7:35 pm

#15 Debtslavecreator

Well, that was Apocalyptic.

People are Conservative by nature.

Soon they get tired of scrimping and saving successfully and thus, want to cut loose, live it up and enjoy the fruits of their labor.

That’s what Liberal Governments are for.

Unfortunately this time around, we did not scrimp and save much; rather, we decided to live it up with really cheap money from other people.

As usual, along comes a Liberal Government during this cycle.

Where it will end, I do not know but much of what you say is true and that, I hate to admit for if true, it will not end well this economic cycle.

#53 kia drivr on 08.29.17 at 7:37 pm

What? Just start a new business every few weeks and the go the casino a few times a week. Its easee.

#54 Ponzius Pilatus on 08.29.17 at 7:40 pm

Dogs, better agree with Sir Garth.
Or he’ll shutter the comments section.

#55 crowdedelevatorfartz on 08.29.17 at 7:41 pm

@#37 Dave
“If it is so horribly bad being self-employed then why don’t these people become employees?”

*******
Hmmmm let me think of my last 3 jobs with large, mind numblingly beaurocratic organizations…….

HR rules all.
These are the people that even THEIR employers despise.
They create nothing, produce nothing, and cost a fortune in touchy feely huggy kissy pc correct Orwellian doublespeak.
And then ….When they have to fire a slew of single moms, dads and older, long term( insert expensive here) due to outsourcing……they go off on “stress leave’ …..because lets face it…Firing people is “icky”
HR people know how to game the company medical plan. I cant count how many times I couldnt get ahold of ANYONE in HR due to the fact they were “off sick”.
Shakespeare was wrong when he said “Kill all the Lawyers” only because he hadnt suffered through an interview with a “fresh out of university, common sense devoid, pretentious, ass kissing, company propaganda spewing lickspittle” that had never worked anywhere else.

I could also talk about incompetant managers that prove the “Peter Principle” Theorum.
Or the accountants that demanded endless information that no one ( including them) ever read.
Or IT depts who had the social skills of a recently castrated grizzly with an abcessed tooth.

No.
Lets just say .
Entrepreneurs are sick to death of the corporate Bullshit and leave it at that shall we?

But, if you’s a large organization without an HR dept to fend off the lawsuits…..your bloody meat in the water for lawsuitsnever actually worked. Excellent degrees

#56 Gasbag Boomer on 08.29.17 at 7:41 pm

James: Where do you buy a decent boxed wine in Ontario?

#57 jim on 08.29.17 at 7:43 pm

#27

“Why? Canada has no sole.”

Sheesh, this issue was complicated enough before someone brought fisheries management into play.

Although perhaps you have inadvertently given us a metaphor here, vis-a-vis tax policy.

Canada’s sole population might have better long term prospects than Canada’s private sector workers if the Trudeau government continues its move towards French style socialism.

#58 rental property math on 08.29.17 at 7:43 pm

#36 Howard on 08.29.17 at 7:00 pm
Have you seen PM Kardashian’s latest selfie-fest?

He showed up at my alma mater, McMaster U, the “help” students move in.

https://www.thespec.com/news-story/7522456-mcmaster-students-get-move-in-help-from-justin-trudeau/

—————————
Surprised he’s not doing selfies with all the illegals crossing our borders.

on a side note.
AUG 31 – I get my keys back to my rental unit after giving the tenants the boot. They were shitty tenants though. Hoarding, removing smoke alarms, late rent.
No choice but to give them the boot and make an extra $475 a month going forward. From $875 to $1350 a month. About a $55% increase. Landlords win 10 times outta 10!

#59 Another Deckchair on 08.29.17 at 7:44 pm

@10 Mike:

“Why can’t I get to pay dividend tax rates and sprinkle income? ”

It is probably your choice. Ask your employer, start up a small business, and contract yourself to them.

Just make sure you know what you are giving up…

#60 Ponzius Pilatus on 08.29.17 at 7:45 pm

So “Hi, Bill” is now an acceptable way to adress a representative of the Crown?
At the least one should use “Hi, Honorable Bill”.
Now wonder this country is going down the crapper.

#61 Another Deckchair on 08.29.17 at 7:47 pm

@51 cherry picker

“I’ll repeat, a much fairer way would be to have a wealth tax and reduce income and corporate taxes for everyone.”

And, reduce benefits, get the employees to pay CPP, give the employees a couple hours notice with no severance, no insurance, no …. You get the idea (I hope)

#62 Spock on 08.29.17 at 7:48 pm

#6 Mike on 08.29.17 at 5:59 pm

Look at your employer and ask him this Qs. He has taken a massive risk (which he will regret eventually) in giving you employment at supposedly $100K+ wages.

You on the other hand – the only risk you take is slacking off and not working and calling business owners names because you are too jealous of everyone else.

#6 Mike on 08.29.17 at 5:59 pm

Talking about business owners taking risks – do employees not take risk?

#63 Lead Paint on 08.29.17 at 7:53 pm

#42 Niko Shepherd on 08.29.17 at 7:16 pm

Very well said. They don’t want any new families gaining the level of wealth they were born in to.

Wouldn’t it be more fair if their taxes were increased on inherited wealth , not income for growing companies employing fellow Canadians ?

#64 Ponzius Pilatus on 08.29.17 at 7:53 pm

#55
oops, should read “Minister of the Crown”

#65 espressobob on 08.29.17 at 7:53 pm

#49 Hello is it me you’re looking for

Business owners provide employment to individuals who survive on pay based on what they have to offer.

It would probably be better for our government to provide education incentives to employees so they can educate themselves and become a more valuable asset to that company they work for. Hence an increase in income.

Some may exceed that level and become business owners themselves. Why is that a crime?

#66 Pete on 08.29.17 at 7:56 pm

Why do those with the most money cry poor? There are some unfair elements to the new tax changes but the excess amount of the crying poor makes me believe they (business owners) want all that extra cream all to themselves. I don’t know much but my boss who has money falling out of his pockets was screaming like a madman in the office on voted Liberals(he was going through the potential tax changes). To be honest it made a lot of people happy to see the richest guy we know crying like a baby. Poor guy won’t be able to buy that Island he always wanted.

#67 Dolce Vita on 08.29.17 at 7:57 pm

#39 Vancouver’s Defiance

A meager defiance at that.

In Vancouver and in the last 102 days, as of Aug. 29:

Total $ Sales have plunged from $1.39 billion to $726 million, -48%.

Total Units Sold have plunged from 993 to 604, -39% – no supply problem here, problem is sales, inventory = 2,774 units.

Average price has gone from $1.4 MM to $1.2 MM.

Better Dwelling comes up with numbers that are from Mars, near real time data from Zolo, My Realty Check and REBGV Listed vs. Sold are lost on that web site.

The Vancouver market is positively skewed by condo sales resulting in a median price of $833 K.

Vancouver RE is about as defiant as the 416 RE market nowadays.

And list price changes, negative every month since Oct. of last year when the Morneau stress test for insured mortgages came to be. Result of that per TransUnion:

Mortgage originations in Vancouver dropped to 6,226 from 9,162. Mortgage size $517,415 in the first quarter of 2017, compared with $553,719 in 2016.

That’s 32% fewer mortgages and $1.86 Billion less in mortgages.

50% of Big 6 Bank mortgages are uninsured and rising at 14%/year. OSFI B-20 will stress test those as well.

Defiant for how long?

#68 Gary smith on 08.29.17 at 7:58 pm

A lot of good arguments supporting dividend payments to the “stay at home spouse” who provides child care and other support.

wonder why these high income earners object to providing lots of $$ for spousal support in divorce cases?

I mean they did contribute to the success of the business!

#69 SoggyShorts on 08.29.17 at 7:58 pm

#6 Mike on 08.29.17 at 5:59 pm
Garth,
You keep giving examples of real business owners. But problem is those professional corporations which pretend to be business owners when they are not.
*******************************
These changes do NOTHING to differentiate between even what you consider “real business owners” and what you consider”pretend”

#10 Mike on 08.29.17 at 6:03 pm
…..and even employee’s spouses give up their career to raise kids. No point there.

I make 100k+ as employee. Private firm. Work 40+hrs a week. Spouse gave up career to stay with kids. Job is risky, who know when next round of layoffs come.

Why can’t I get to pay dividend tax rates and sprinkle income? It is all about fairness Garth.
********************************
If your spouse supports you through an extra 10 years of schooling by paying your tuition, rent, and grocery bills, how are they not entitled to some of your income?
If a doctor is the product being sold by the business, their spouse is the manufacturer who made that product.

#70 AK on 08.29.17 at 7:59 pm

“Please rethink this or I, as well as millions of others that value small businesses, will be responding with our vote.”
——————————————————————–
Correct. Libtards should never be in power. 2019 is not very far away.

#71 just a dude on 08.29.17 at 8:00 pm

James & Aman: respect, gentlemen.

Superbly said. Thank you for sharing and for encouraging me by your respective examples to write in to my local MP & Mr. Wild Bill.

Garth, thank you as well for sharing.

#72 Ian on 08.29.17 at 8:02 pm

I can’t wait until we can get rid of these idiots in 2019. The damage they have already done is beyond words. They damage they will do by then is incalculable.

Go blues!!!!

#73 Ponzius Pilatus on 08.29.17 at 8:03 pm

And I thought that the prime motivator for entrepreneurs was “Being your own Boss”.

#74 Capt. Serious on 08.29.17 at 8:05 pm

I chose puppies, for the record.

Let’s make the rule that for you to be able to sprinkle to your relatives you must employ at least as many non family members in your business, and we’ll call it even.

#75 wallflower on 08.29.17 at 8:06 pm

Sent: Sunday, August 27, 2017 9:28 PM
To: ‘[email protected]
Subject: the changes

Completed a business plan early 2017. Likely not going to launch now.
Ontariowe and Canada seem both quite hostile toward business.
Banks have no interest in lending to small biz.
So the risk is high and the reward is questionable.

#76 db on 08.29.17 at 8:06 pm

I agree with one of the comments which suggested the letters to Morneau displayed thus far are heavy on woe is me and light on why this could be a bad idea… so here’s my take:
On gender equality. The briefing document has some golden nuggets. One, the vast majority of sprinklers are men and the majority of sprinklees are women (please feel free to indulge in golden shower puns) but the research isn’t totally clear as to why this is the case. Wouldn’t it be prudent to first discover why this is the case? If women are disproportionately contributing to small businesses with in-kind uncompensated services and support during the lean early years of start-up wouldn’t banning sprinkling be a form of gender discrimination at the worst or ignoring the whole point of gender based budget analysis at the very least?

#77 steph on 08.29.17 at 8:16 pm

#22 CDH

I clicked on the puppies also. I fell much better now.

#78 Tim on 08.29.17 at 8:16 pm

Defending the specific tax avoidance strategies discussed because a) starting a business is risky, or b) one’s spouse provides support to the family is unconvincing to me.

It is in society’s best interest to encourage businesses to start up and grow. However, it seems unlikely that someone would choose to do this just to take advantage of various corporate accounting techniques to reduce one’s income tax bill below what it would be if one were an employee making the same gross income.

The reward for taking risk is the fact that the owner “earns” the entire annual profit of the business after expenses (including taxes) are paid.

This surplus from the use of capital and the owner’s own labour can be small or large, and one hopes for large to make up for the risk.

Of course, the drop in business taxes at the federal level from 29.12% to 15% and even lower rate for small businesses means there is more left over to keep by the owner. This is one substantial way the tax system has been changed over the past 17 years to incentivize business ownership by increasing business profits, which go directly to the owner.

Moreover, the owner builds up a stored value in the business over time and when he or she sells the asset (including an established customer base, facilities, and so on), they potentially realize a huge sum, also a compensation for risk. This return is also taxed at a very favorable capital gains rate, another big tax break for owners of capital.

And the owner is his or her own boss, a freedom which some people really value.

People should be incentivized to start businesses in ways that directly link the success of business in the economy to a larger financial return for the owner. That’s the risk-reward tradeoff. More success, more growth, more personal return. The motivation should not be to gain access to on-the-side tax-avoidance strategies one could not otherwise use.

Merely using the legal structure of a business to lower taxes (via income sprinkling, holding really a personal investment portfolio in a private corporation’s financial structure, or converting operational profit into capital gains) all are machinations that lower society’s overall tax revenue without really aligning the business owner’s interests with the overall social interest in encouraging business investment and growth.

That’s what the corporate tax rate and capital gains tax break are for. Creative and likely initially unanticipated ways that accountants have discovered over time to lower a business owner’s personal tax rate beyond what someone else would pay just looks like loopholes to me.

#79 Catalyst on 08.29.17 at 8:17 pm

I always hear from business owners – ‘I have no pension’. Well, other than scant amounts of cat food they call the ‘CPP’, most Canadians don’t either. Canadian business is very hypocritical, for example, the protected dairy industry, subsidized lumber industry, contractors with outrageous government contracts, auto supply chain subsidies, banks operating in a oligopoly etc.

I can also understand the feeling of unfairness when a business owner pays $225k in taxes but that also means they also made a lot of money. They need to reframe their thinking as either ‘It’s the cost of maintaining roads for your trucks to drive on’ or wages for government workers who buy your goods. It enables favourable startup capital options like BDC/EDC which are also government funded. One huge thing business owners often forget is they buy commercial property and pay it down through rent to a HoldCo with PRE-TAX dollars. Then when they sell the property they use lifetime capital gains tax exemption to make windfall profits (often through family trusts multiplying this effect) – something 90% of Canadians will never get to take advantage of.

Is this the right measure being proposed? – I don’t know. But something did need to be done. I would have preferred lowering personal tax rates to the point of making these accounting strategies useless but that would involve cutting spending by government which is something no government in the world can figure out how to do. The world has a spending problem, America can print it’s way out of it; I’m not sure we will be so lucky.

#80 Ootder Hoos on 08.29.17 at 8:18 pm

#31 Danny:
The Canadians who are born here were less communistic minded than the people coming in, over the last five decades. Not all cultures are the same as Canadian culture. I was born in Canada. My wife was not, but she was alarmed that foreign, more communist minded people were starting to take control here.

This tax change is because of multi-culturalism.

The shift to the communist mindset has occurred in USA too. That is why Obama was elected. Everyone talking about moving to USA is incorrect, unless Trump succeeds are stopping the transformation of USA by mass replacement of the population which is underway; ie. 10% per decade is the Canadian rate.

#81 Sean on 08.29.17 at 8:18 pm

I am blown away daily (especially the last couple of days with this hot button issue) at the inability or unwillingness of so many to hold a principled position. The comments degenerate into petty jealousies and comparisons… If so and so has more than me, then I have no sympathy, he can afford it, etc. No thought as to the underlying principles of fairness, not to mention incentives.

Very sad, even within this self-selected group (blog dogs) of high earners and high achievers, that the stereotypical Canadian quality of dragging down winners is so rampant. It doesn’t bode well for our future.

#82 Costco Nation on 08.29.17 at 8:18 pm

Reading through the comments I slowly realize that this commie drama supply teacher is not an unfortunate accident happening to Canada. It’s the majority of this people imbibed by jealousy which is nascent and thriving ground for Bolshevism. You totally deserve what’s coming. Educated advice to the few who are same, run, don’t look behind. Cuba and Venezuela is what’s happening. Enjoy the lines for milk. They’re coming.

#83 Screwed Canadian Millenial on 08.29.17 at 8:18 pm

I haven’t even been around and your comment section is according to you, a bigger disaster than ever. You see Garth, even though you hate Screwed Canadian Millennials, I am the least of your worries.

Does Smoking (too much substance) Man have spell check? I am deeply concerned for his well being.

#84 will on 08.29.17 at 8:18 pm

Yeah best to leave the comment section in its current raw state. Good call Garth.

#85 mark wolovetz on 08.29.17 at 8:19 pm

Glad to hear.

#86 Victor V on 08.29.17 at 8:19 pm

http://nationalpost.com/news/politics/john-ivison-surprise-doctors-dont-like-being-branded-tax-cheats

Jennifer Chan, a 44-year-old physician from Winnipeg, works in the most economically disadvantaged postal code in Canada. She doesn’t feel like a “fat cat,” yet she is about to bear the brunt of the Liberal government’s new small-business tax reforms, which it says are aimed at closing “unfair tax loopholes” being exploited by the top 1 per cent of earners.

“I just had my 2004 Subaru towed to the garage. We are very fortunate but we are not fat cats, and I don’t feel like I am cheating the system.”

The cash-strapped Liberals would like to get their hands on up to $3 billion of the $27 billion or so of “passive” income earned by small-business corporations. Simply put, Bill Morneau, the finance minister, needs the money — even at the risk of reducing the rewards available to would-be entrepreneurs.

#87 Tim on 08.29.17 at 8:20 pm

Note that the address to send comments on the proposal to (as per the text on page 6) is:

[email protected]

Sending the feedback to the Finance Minister’s e-mail address may not get the feedback to the right place.

#88 db on 08.29.17 at 8:26 pm

On passive investments. Dear me this one should be obvious but conveniently eludes those with a finance banking background. Let’s call this one what it is; an attack on self-finance via cash-flow. If you dare accumulate capital in your business for those rainy days where a) you have a sudden cash-flow drop b) you’re in a cyclic business c) you’re revenue isn’t quite steady state but fluctuates in a way you still haven’t quite figured out d) you prefer to pay for equipment outright rather than being fleeced by lease financing e) you’re committed to having money on hand to pay all of your bills come hell or high-water well by golly we’ll treat that as tax cheating ’cause your employee can’t do that. However as compensation we’ll let you declare usury lease rates on equipment you need as a business expense so instead of paying 22% it will be more like 15.5% interest… I actually have no problem with the earned income from passive investments being taxed at the marginal rate which would should do more than enough to deal with aggressive tax avoidance schemes while still allowing business some flexibility. You might wait 5-10 years for the right opportunity to come along to deploy capital, especially in manufacturing/R&D/construction where the learning curve on new equipment is steep and opportunities are sporadic (i.e. major capital projects like bridges, tunnels, transit etc.).

#89 Smoking Man on 08.29.17 at 8:32 pm

They will not change there mind.

All small biz as a unit withhold your Payrole and HST. Only way to reverse it.

I told you dogs a year before tinker bell and his band of theives came to power were comming for your loot. Told you to get it out of the country slowly.

They belive in equal outcome. Good if your dirt poor and if your wealthy your picking up the tab.

Like how some blog dogs got me figured out, from yesterday.

Smokeys a loser pissed away all his loot at the casino, had to sell his boat, his house. Can’t get a job because he’s a loser. Did you see his crazy clips on parascope. What a complete failure. Makes for perfect screen play.

Well it’s true and after the up coming road trip. I’ll be completely broke. :) the only thing left will be a new suv I bought on my unsecured avion credit card. That still has 10 k left on it. And that too will end up in a slot machine in new orleans, mississipe or Atlantic city.

#90 Soviet Capitalist on 08.29.17 at 8:33 pm

This is not about fairness, socialism or some ideology.
Justin needs revenue to reward his voting block. People like entrepreneurs have currency and mostly did not vote for him, so they are the perfect target to fleece.
Want fairness? Then form a bigger voting block than Trudeau’s.

#91 Yuus bin Haad on 08.29.17 at 8:37 pm

“the next round of tax changes …” tick “the next round …” tick “the next round …” tick “the next round …”

#92 MSM-Free Zone on 08.29.17 at 8:41 pm

Total hypocrisy.

If this was your average Canadian blue collar worker struggling against long hours, poor working conditions, and inferior compensation, the classic ‘entrepreneur’ response would quite likely be, “If you don’t like your job, then quit!”….

…..immediately followed by “I have a labour shortage! can’t find qualified personnel! More Temporary Foreign Workers!”

#93 Jungle on 08.29.17 at 8:44 pm

As a business owner, sky is the limit. Your reward is what you put in, how much you get out, how successful you are in making more money because you have unlimited opportunity.

The reward is not to pay less tax by shifting income to your spouse because you worked harder to make more money.

Pretty simple.

#94 MF on 08.29.17 at 8:45 pm

The people who voted for these idiots are responsible for their stupid policies.

Over 25 and voted Liberal? Either lazy, delusional or has their head in the sand.

Funny. Few people admit they voted Liberal anymore.

MF

#95 Stone on 08.29.17 at 8:48 pm

The world is ever changing. We make decisions and the world continues to change. We adapt, make new decisions and live with the consequences of our choices. Some of those choices are made by us and some are made by those that we voted for. We’re not going to agree with everything the political class comes up with. Unfortunately or fortunately, this is the political system we have, for better or worse.

For the 2 examples given today, we seem to live in two different worlds. Appears to be a sense of entitlement I hear. Intrinsic versus extrinsic value. Maybe you made your choices for the wrong reason.

If some don’t like how gouvernment is run, nothing stopping you from running for office in the next election. Everything is possible. After all, the world is always changing.

#96 Willy H on 08.29.17 at 8:49 pm

Not losing any sleep over small-medium sized business entrepreneurs having to ante up a few more bucks in taxes considering it will have minimal impact on 80% of these folks.

Most small business owners are sole proprietors with average incomes.

“Data from Statistics Canada show that two-thirds of Canadian small business owners are earning less than $73,000, and employers earning less than $40,000 outnumber those earning more than $250,000 by four to one.”

http://www.cfib-fcei.ca/english/article/8343-canada-s-small-business-owners-are-four-times-more-likely-to-be-low-income-than-rich.html

The vast majority of these folks are just making a living and they are not incorporating or setting up holding companies for tax avoidance purposes. Generally only very successful small and medium sized business can employ these tax avoidance strategies.

Aman and James appear to be well beyond the $250K+ revenue category from what I can deduce.

They should keep in mind that they do indeed take all the risks but the flip-side is that they, and they alone, get all the rewards (even if they pay normal income tax rates). They can choose to re-invest or take their rewards as income. They are not entitled to preferential tax treatment.

As for not being reliant on government, it’s a tad disingenuous. Could their firms have been successful without publicly funded infrastructure? (eg, roads, bridges, rail stations, airports, telecommunications etc….) Do they rely on public sector contracts or indirect government spending?

Tallying up all the income taxes and deductions of their employees does not make them entrepreneurial God’s. It’s called the cost of doing business.

#97 ben on 08.29.17 at 8:54 pm

People complain about tax on work, yet few are aware of the alternative idea pushed by many major economists (and I mean Friedman/Smith, not some idiot from the modern day).

Tax land not labour. Land value tax. All these people who have worked hard to create businesses as per your examples posted today: well done to them all!

All the people who profited by withholding housing from families until they pledged a huge amount of labour for the same pile of bricks people bought easily a generation ago: burn in hell!

There is wealth *creation*.

There is wealth *appropriation*.

We can sink these scumbags. Tax land not labour.

Henry George. Progress and Poverty.

https://www.amazon.com/Progress-Poverty-Industrial-Depressions-Increase/dp/0911312587

#98 Bob on 08.29.17 at 8:56 pm

Canada today is all about the politics of envy…business and monetary success is frowned upon as they contradict “fairness”. Accordingly, we seem intent as a nation(?) to penalise those who wish to do better for themselves. Our mentality today is to demand that our elites take down a successful section of society one peg at a time…all in the name of fairness.

As a society we have forgotten the age old axiom that life is not fair but we seem to be intent on changing that outcome.

Ultimately, the government will do as it sees fit and a large section of the population will love them for it.

#99 Headhunter on 08.29.17 at 8:58 pm

Divide and Conquer same old play book since man could scrawl on caves. In Canada now just game the system, work enough to enjoy your life.

being a business owner I’m starting to agree with all who dont run a gig telling me its nirvana.

Its a good life I took risks, maxed my credit card(s) to make payroll. Until you have done that you can never understand.

#100 Manitoba Whale on 08.29.17 at 9:01 pm

mbucky32 on 08.29.17 at 6:03 pm
It’s due to governments being broke and wanting to squeeze every last nickle.
*****
Come on now. I am so tired of countering this argument to both lefties and righties at work or socially.
Governments are not broke. They have a budget that funds basic needs as well as costly vote getting pet projects. We have a spending problem in Canada, especially Ontario, that is not being remedied.
For the love of all things cute and cuddly, if a project at work does not make sense we put the brakes on, say it is FUBAR, and move on. We don’t keep throwing $$ at it until we are 30 billion in the whole, or kick the damn thing down the road so we can get promoted!
As someone said a few days ago, would you hire Justin? Would you hire Kathleen?
Where O where are the Brad Walls and Danny Williams of the future.
Rant over, Whale out.

#101 Robert Daisley on 08.29.17 at 9:04 pm

If the role of a supportive spouse is to be taken into account, why can’t a public servant (for example) split income with a spouse? My wife gave up her career to follow me to northern Canada but the government doesn’t give us any tax break for that….And let’s have some solutions instead of just complaining, Garth: what would you do differently to make the system more fair? Or is the present system as good as it gets? (I’m sure that will fill a column!)

You have a DB pension. No sympathy. — Garth

#102 mike from mtl on 08.29.17 at 9:05 pm

I believe the core issue is taxation itself needs to be reimagined. And no, total anarchy bartering rocks and ammo libtard style is not the answer.

The current construct is needlessly complex, catering to exceptions, special interests, you know the usual.

F-all that. Simply put a flat dunno say 8% tax on EVERY “cash” real or digital transition, no exceptions. However… eliminate ALL other silly constructs, like income brackets, treatment for dividends, registered accounts like RRSP, TFSA, arms-length corporate holdings, RE primary residence exception, various tax credits. You name it.

A dollar is a dollar is a dollar. Might be too crazy that’s why it could never happen.

#103 Steve Thompson on 08.29.17 at 9:10 pm

Please people, take a few minutes and send a letter rather than an email. A letter to an MP holds a lot more weight than an email and will actually garner a written response rather than a spam-style return email.

#104 Valleyboy on 08.29.17 at 9:13 pm

so the average wage in Canada is 50k. So these poor poor business folk that probably are cleaning up clearing 200k plus. Cell phone wright offs, vehicle wright off’s, home wright offs, yes you took a risk but do you really feel when the risk pans out you deserve assloads of cash more than the average Canadian wage. Just delusional business owners who think there above workers who don’t take risk, or are content. Still the gov should help new business out for 5 years. But after that your not special. I can’t income split with my stay at home wife and I pay a ton of tax also for what I make. Use your wright offs, but get a life on all the other free loop holes. Cause your not special. If you can income split why can’t I what’s the difference.

#105 Al on 08.29.17 at 9:17 pm

The first case study can be summed up as “I work really hard and have misplaced priorities (being “successfull” vs spending time with their family), thus I deserve to pay less taxes”. You could replace entrepreneur with any number of salaried positions in that paragraph. He also seemingly wanted to continue this behaviour of not seeing his family (“continue to grow the business” ) all while already making an income in the very top of the population. I guess the additional monies at his already very high income are more valuable to him than seeing his family. Because of the proposed tax changes, he will rescind from trying to make more money (“growing the business”).

Second story, ” I work really hard, don’t take vacations and since I earn lots of money I pay lots of taxes on an absolute basis. Every salaried worker in Canada has public servant pensions, I don’t, that’s not fair, and besides, I’m a job creator, the salaried proles are not as useful as me to the well being of our country, plus I took risks so I could have a shot at making more money and have full autonomy, I deserve tax break.”

There are probably better use cases/reasons to rouse support for the anti Bill movement. Perhaps Bills disingenuous comparison of salaried income vs income from small business to assess a “fair” tax rate. The salaried workers salary has inputted benefits the small business owner salary does not, in other words the salaried workers compensation is more than just their salary.

#106 Valleyboy on 08.29.17 at 9:18 pm

@willy H

Well said.

#107 Willy H on 08.29.17 at 9:19 pm

#98 Bob on 08.29.17 at 8:56 pm

Canada today is all about the politics of envy…business and monetary success is frowned upon as they contradict “fairness”. Accordingly, we seem intent as a nation(?) to penalise those who wish to do better for themselves. Our mentality today is to demand that our elites take down a successful section of society one peg at a time…all in the name of fairness.
__ __ __ __ __

Nope, it’s much simpler.

It the growing chasm between haves and have-nots.

It will influence public policy and taxation for decades to come. This is just the beginning.

Failure to address this disparity will result in a permanent underclass, increased crime, child abuse, ghettos and gated-communities. (Many parts of the USA and UK demonstrate this already.)

The death of the middle class is a reality in the west that many affluent folks chose to ignore. The post WWII middle class is dying and it’s not coming back anytime soon.

#108 Smoking Man on 08.29.17 at 9:20 pm

Got a few x friends, he and her both Govt workers with huge DB pensions. They have a painting business on the side, cash only. Probably pulled in a few million or two over the last 20 years.

They are retiring in luxury this year, late 50’s. if I was an asshole like many posters here I would rat them out to CRA.

Never going to happen, Taxation is theft and good for them is my line of thinking despite the fact that I hate them.

#109 Porsche on 08.29.17 at 9:20 pm

It’s time for a tax revolt in Canada

http://m.edmontonsun.com/2017/08/26/its-time-for-a-tax-revolt-in-canada

#110 Tim from Timmons on 08.29.17 at 9:23 pm

The incentive for being a capitalist is that you receive the profit of the enterprise, not that you get special tax breaks. Confusing the two is just dumb.

#111 Gyga on 08.29.17 at 9:27 pm

I still don’t understand this spouse so called loop hole.
So if they pay dividends so you still need to do your personal income tax. How do you exactly benefit?

#112 Manitoba Whale on 08.29.17 at 9:28 pm

#34 Indefensible on 08.29.17 at 6:55 pm
These rules do not achieve nor strive towards fairness for the middle class. They just make it more attractive to work for the CRA than for a start-up.
*****
I would agree. When I was in business school 30 years ago we were warned not to work for the government as employees in private corporations had better upward mobility. Today, ‘things are different’ for real.

#113 I'm stupid on 08.29.17 at 9:32 pm

Garth you know better than anyone (being a politician once) that once they’ve decided to do something no amount of emails will change their minds. We can lament all we want but the only way to change policies is to change govt.

#114 Smoking Man on 08.29.17 at 9:34 pm

#103 Steve Thompson on 08.29.17 at 9:10 pm
Please people, take a few minutes and send a letter rather than an email. A letter to an MP holds a lot more weight than an email and will actually garner a written response rather than a spam-style return email.
….

What don’t you get it’s a foregone conclusion.

Won’t matter. Do you think it’s a coincidence that all of a sudden all around the world, transgender classes for 4-year-olds?

It’s a global initiative, turn boys into girls for the final take over. Everything coming down the pipe is thought out and implemented by attendees at Davos and Bilderberg. The Dr tax coming to a western country near you. Except for the Beautiful USA.

Where the rednecks and the hicks that have ten times the brain power of the university dumb down idiots and voted in Sr Donald J Trump.

He’s like a modern day Jesus Christ to me.

#115 Leo Trollstoy on 08.29.17 at 9:38 pm

Gartho u can’t convince low income wage slaves who think that a job is risky. They outnumber you.

#116 Matt on 08.29.17 at 9:38 pm

Don’t forget small business people get to write nearly everything off ….need toilet paper for the house buy it through the business….need gas for your personal car buy it through the business….Friday night date night with the wife sounds like a business entertainment expense….I see hundreds of self employed tax returns a year and it’s rediculous how little most small businesses actually pay in tax. It’s about time they start to crack down on it but not far enough… they will still get to write off their personal expenses and hide them as a business expense

#117 Leo Trollstoy on 08.29.17 at 9:39 pm

I love reading triggered wage slaves

Makes the scotch go down smoother

#118 akashic records on 08.29.17 at 9:40 pm

Pitting people against each other always work. It is politicians favorite past time.

Now seventy-five day summer consultation period for various parties to prove why they are unfairly screwed and others are shamelessly favored. With long list of suggestions how to change that. Mostly by making sure that every one else is screwed at the same level, possibly a bit more.

While you are busy writing your opus, Trudeau and Morneau are probably having fun somewhere. Real summer vacation.

Eventually they will also fire up an email to their staff, asking them to pick the most representative vox of populus responses that fit the best to support the new changes, decided within a day or two after taking power.

I actually like Conrad Black’s. It is refreshing that he doesn’t get boxed into the simplicity of “tax rules on small business are drastically altered”.

The declares that “Universality is bunk” – which magically helps to dissolve smallish groupthink before it turns into pitting the dogs against each other.

Here are some of the refreshing details.

“We should sharply reduce all income taxes on lower personal and corporate taxes, have a personal ceiling of 35 per cent and 20 for companies, but impose a wealth tax on high net worth people of one per cent, which would be paid by operating or supporting approved bona fide plans to employ and train disadvantaged people. It would be reduced toward zero as the number of designated poor people was reduced. Taxes on elective (largely luxury) spending and most corporate financial transactions could be raised a few points.

All drugs should be legalized, with compulsory treatment for hard drug addicts (if necessary, in confinement), and the industry’s revenues would accrue to the federal and provincial governments equally. (The War on Drugs has been the worst defeat the West has endured since the fall of Saigon.)

Private medicine should be accepted, all graduating medical doctors should contribute three months to the public health-care service at modest pay, and there should be user fees and declining benefit scales for people of above-average wealth. Universality is bunk; we must help those who need it.”

#119 canuck on 08.29.17 at 9:48 pm

I’d like to thank James for his whiny rant on his first world problems. My biggest guffaw was his statement about having a dozen employees and having to remit 6 figures a month in payroll remittances. I’m thinking he’s including the cents in that number.

What a pantload. Sparky isn’t going to get much sympathy having to pay 225k a year in income tax.

#120 T on 08.29.17 at 9:51 pm

Am I smelling a veiled attempt reducing house prices? Hitting us all on the income side this time! Cruel, very cruel.

Do those tiny, boring, concrete box soviet condo’s pass as ‘tiny houses’?

I do hope i’m wrong….

#121 dr. talc on 08.29.17 at 9:55 pm

morneau and t2 are proven liars
they both bear false witness and salute false flags
they will not read your email
they don’t care what you think

take care of yourselves and your families

#122 conan on 08.29.17 at 9:57 pm

Still not getting the grief,

Passive investments within a corporate structure are coming under the microscope.

Passive investments = a buy and hold ETF portfolio
Some advisers are going to get hurt by this. Say it aint so, Joe!

Income sprinkling: As far as I know any legitimate payments will be allowed. Paying your trophy wife 75K a year, to wash the golf balls, will not fly.

Dividend payments to children, the cat, and anything else tax loop holy, is going to get flagged.

Ask the authors of the letter submissions to detail how much they were allowed to write off on their businesses, before they got to the “Nirvana” zone.

My guess is most of the whine and cheese is coming from people who inherited businesses. The entrepreneur who starts a business from nothing is still going to get the deductions that they need.

#123 Puzni on 08.29.17 at 9:58 pm

Garth: When you published that blog you said it took government 6 years to debate the tax changes. No wonder nothing ever gets done and when it does it’s too late. By usual Websters definition a Corporation is a entity that hires thousands of workers around the globe , not a pretty secretary that doubles as a wife; and dividend taking entity. Majority of RE agents in Vancouver are Personal RE corporation. What risk… stuff sells itself and the only risk is that mothership ( RE borad will not adjust the numbers). You have published an alleged electrician that makes 70 K , in Vancouver under ibew rates that person would have earned $40+ per hour and made more money than working for himself. I wonder if his numbers were reported after the “creative accountants” gave him a helping hand.
Lastly me and you know that original tax in Canada was 12 pages and now it’s over 3000 pages . No wonder accountants are not backing changes…..Simplifying and making it more fair would not be in their interest……

#124 Prairieboy43 on 08.29.17 at 10:00 pm

Thirty Billion defecits annually. Seems like fed is going ahead with this corporate tax. This tax collection on small corporations is chump change for Feds. This brings me to think what will be the Next Big Tax? Garth you mentioned in prior blogs that Revenue Canada employees dream 24/7 of new ideas to tax Canadian citizens. These employees take stress leave because there boss, “Bill M”, putting heat on to come up with new “Fair”, Tax policy. This is where “Doc and spouse”,can get even.
PB43

#125 Fake News Again on 08.29.17 at 10:06 pm

And now we know where all the money is going that JT is taking away from Canadians…….to the Middle East to the tune of 180 million dollars.

Canada is doomed.

#126 meslippery on 08.29.17 at 10:07 pm

#56 Gasbag Boomer on 08.29.17 at 7:41 pm
James: Where do you buy a decent boxed wine in Ontario?
————————————
I would try any Walmart in the USA.
Ontario, buy grapes @ No Frills remove shoes….

#127 Lessons Learned on 08.29.17 at 10:09 pm

My spouse and I have had a professional corporation for 12 years (not doctors). Here is a list of “benefits” and “advantages” that not being employees has afforded us:

paid stat holidays – 0
paid vacation days – 0
paid sick days – 0
paid professional development and membership fees – 0
medical/dental benefits – 0
dc or db pension – not applicable
employment insurance – not eligible
cpp – pay both employer/employee portion
employment security – 0
errors and omissions insurance – $5k per year
general liability insurance – $2k per year
WSIB insurance – $500 per year
accountant fees – $3.5k per year

We both contribute and withdraw the same amount of income and earnings so no income splitting advantages there.

Do you think we deduct more expenses then what we would “earn” as employees for vacation, stat, and paid sick days.

Just wanted to provide a little insight to those who feel that allowing an employee to income split with their ever supportive spouse is the same thing

#128 akashic record on 08.29.17 at 10:10 pm

@ Smo.Kingman and others…

https://www.youtube.com/watch?v=wnh9NmU_oKc

#129 MF on 08.29.17 at 10:14 pm

#117 Leo Trollstoy on 08.29.17 at 9:39 pm

The new term now is “wagecel”.

Usage: “look at all these wagecels getting defensive!”

#184 Happy Housing Crash Everyone! on 08.29.17 at 4:4

Try harder you trololol.

The Mayor of Milton has you beat.

#124 Prairieboy43 on 08.29.17 at 10:00 pm

Nope. Revenue Canada just enforces the tax laws drawn up by whoever is elected. Place your blame on whoever voted for these clowns.

MF

#130 Manitoba Whale on 08.29.17 at 10:15 pm

#116 Matt on 08.29.17 at 9:38 pm
Don’t forget small business people get to write nearly everything off ….It’s about time they start to crack down on it but not far enough… they will still get to write off their personal expenses and hide them as a business expense..
*****
Don’t forget small business people follow laws and must deal with CRA/HST/WSIB/etc. audits.

Since I looked at the puppies a few minutes ago I am trying to get back to providing solutions in my life rather than rants.
How about suggesting to your MP/MLA about having more auditors doing more audits. Perhaps the hundreds of tax returns you see will be more sanitized in the future?

#131 Larry on 08.29.17 at 10:16 pm

So there are currently tax breaks for buisiness owners … but only if you are married?

#132 Blobby on 08.29.17 at 10:18 pm

I find it depressing reading comments in favour of this tax reform from people who haven’t taken the huge massive risk of setting up their own business.

While they sit their with their ei, company provided extended medical, etc etc..

If i get sick, I don’t make money, I don’t get sick pay. If I run out of work, I don’t get ei.. etc

But you think it’s “fair” that I get no benefits at all?

I’m on 6th year of running business. First year where I’ll be profitable.. just as any “gains” are taken away from me.. yeah.. great…

I should’ve carried on being a wage slave, than actually helping the economy and creating work for employees, etc…

#133 joe on 08.29.17 at 10:19 pm

only way to live a good comfortable life in Canada is to have 4+ kids and work cash while claiming maximum govt assistance. I know many many people who have 5-7 kids, get $700 each child, either or on unemployment or some type of disability while drive a cab or run retail business. life is good. or be a refugee, selfie boy pays u $3000/month only for housing expenses
If you work a payroll job – u r pooched.
if you are incorporated – u r about to be pooched!
sad state of affair!

#134 Bottoms_Up on 08.29.17 at 10:20 pm

I think the point is to reward successful small business owners while ensuring fair tax treatment. The tax changes should be geared toward those that abuse the system, such as paying their teenagers wages in order to avoid tax. Hopefully Bill gets it right.

#135 Willy H on 08.29.17 at 10:20 pm

#124 Prairieboy43 on 08.29.17 at 10:00 pm

“Thirty Billion defecits annually. … This brings me to think what will be the Next Big Tax? … Revenue Canada employees dream 24/7 of new ideas to tax Canadian citizens. …”
__ __ __ __

Pretty darn simple. Raise the GST back to 7%

Had Harper left the GST alone he would have been back to balanced budgets 2-3 years earlier. The Reformicons would not have had to make irresponsible choices to balance the books. Harper would likely still our PM!

Each 1% cut in GST removed between $7-8 billion in revenues annually.

The government has never managed to find a way to make up this shortfall after oil prices collapsed.

Some economists would argue that he GST cuts were pure politics and that they stimulated an economy that was already firing on all cylinders.

#136 paulo on 08.29.17 at 10:22 pm

Does anybody know what percentage of small biz owners are actually “sprinkling Income” ? even a educated guess. i have to wounder if the cra is playing a smoke and mirrors game on this one.
From a different angle, lets say that taxpayer A opens a corporation. the gig does well he creates 10 full time jobs.contributes to tax revenue,exports goods or services
as anybody knows running a small biz is a 24/7 event.
you usually stick your ass on the line guaranteeing loans for your biz,work massive numbers of hours and your ass is grass if it fails, no unemployment insurance,no defined pension etc.
So taxpayer A has a wife whom works full time taking care of the kids and home, and essentially QB’s taxpayer A in the venture. the wife’s contribution indirectly significantly contributes to the success of taxpayer A’s biz.
do you really think that it is unfair to pay a reasonable wage to the wife in consideration of her efforts and support of the biz ?

#137 Ace Goodheart on 08.29.17 at 10:24 pm

If they’re going to look at fairness in taxation, then they have to also look at fairness in tax dollar expenditures.

First place to look: Political patronage.

Why is it impossible to get a job in any high level Crown or Provincial corporation, without having actively assisted a sitting MP or MPP to get elected?

Are the best people for these jobs really people who worked to get politicians their jobs? Is this fair?

If the Senate makes the final decisions for all of us, does it make sense that the only way to get in is, once again, political patronage?

Fair is fair right? Why are all of our high level civil service positions staffed by people whose only claim to qualification for the job is that they helped a politician get elected? We pay these folks many hundreds of thousands (and often millions) of dollars per year. They are set for life with full pensions, they fly around the world at our expense, they stay first class only, eat and drink like rock stars, all paid for by us lowly working people. And they are completely unqualified for anything that they do. Hired only because of connections.

If they want to make us all equal, then make us all equal. Open up the senate to everyone who applies. Hire the best qualified person. Do the same with the heads of all Crown Corporations. All senior level civil servants. Everyone can apply. Hiring based on merit.

They talk and talk about how small business owners are getting away with stuff. While they collect their benefits, their golden pensions and their expense accounts, living first class lifestyles at the expense of people who pay payroll taxes. Flying around the world, courtesy of Joe factory worker’s monthly deductions, hiring their friends into high level positions, funding their own pet projects.

I mean seriously, is a politician really talking about fairness? With a straight face? This guy is not Robespierre. He is the usual millionaire politician, same as JT and most of his crowd, first class everything, expense it all and then complain that the rest of us are not being fair.

These people are intolerable.

#138 Niko Sheppard on 08.29.17 at 10:30 pm

#105 Al on 08.29.17 at 9:17 pm

HA HA … That is insane. You assume that some who works hard doesn’t spend time with their families so that you can justify your choice not to work hard.

I’m a parent, I work hard, and I spend time with my kids. One of the most important things that you can do as a parent is to instill a good work ethic… which is done by example. Enjoying work and the satisfaction of receive from completing an honest hard days of work is invigorating. It enhances the quality of life.

I also taught my kids not discriminate people based on attributes they have no control over. … however, they know it is OK to hate lazy people.

I apologize if my kids don’t like yours.

.

#139 Dmitry on 08.29.17 at 10:32 pm

Hi All,

This is my first comment.
Just wanted to voice my opinion here.
I’m one of those incorporated consultants with 3-4 customers and I think that qualifies me as a small business (as opposed to a contractor/consultant with a single customer). The reason I have 3-4 customers is not that I really need to, but because government rules clearly state that if there’s only one customer – you’re not corporation/small business/etc but employee. So to qualify I had to have 3-4 customers.
Next, having CCPC to shelter taxes (not to mention not to pay taxes) is a myth. Just ask any professional accountant (no the ones that help cheating). There’s only two ways to get money out of corporation legally by the owners – pay salary or/and dividents. If paying salary, same tax rate applies as any employed non-incorporated person. The rest of money left in corporation is taxed at 15.5% small business rate. Only ater paying 15.5% small business corporation taxes the money can be distributed as dividents, which also means individuals pay personal income tax on top of that.
If you count 100K of income or more (either salary or dividents or combination) it’s a wash – no advantage there.
I tried all combinations, there’s really no advantage.
Ratained earnings (what’s left after paying salaries/expenses/corporate taxesw/dividents) stay within corporate account usualy until owners retire and just keep paying dividents.
There’s some advantages and disadvantages comparing to RRSPs – there’s no limit (keep as much as you’ve earned after paying taxes) buit after 15.5% tax.
RRSPs – it’s pre-tax but there’s a limit.
Also I guess there’s difference in how these can be invested, but I have not invested anything, so can’t tell teh difference there.

Then there’s that perceived unjust/unfare/evil “income sprinkling”.
To me it’s just another attack on family values.
See, I work with my spouse for the well being of our FAMILY. I do not earn income for myself. My spouse doesn’t earn income for herself. We do it TOGETHER for our FAMIILY. FAMILY is ONE atomic unit.
Saying that small business in form of CCPC “sprinkles income” between spouses as something that is wrong/evel is an attack on FAMILY. It’s basically saying that one part of the family is independent/separate from another part of the family.
This new proposed law discourages having a family here in Canada as it’s basically does not put any incentive to have family, as financially there would be absolutely no difference.
My spouse could just go and work as full-time employee or have her own business (BTW that would increase unemployment rate). But instead we chose different priorities and decided that raising kids and giving more attention to them is more important that another full source of income. And BTW, because of the liberal sex-ed and transgender agenda in schoold we had to home-school our kids. Also secondary and high-school education in Ontario is garbage, so having to take kids to math classes/sports/etc also takes time/resources. It is not by our choice – government forced us to do that with their anti-family agenda.
So fo the person that is single it’s very hard to comprehend what family is and all family values and why “income sprinkling”, as they call it, is no a bad/evel thing, but a must have for any family.
I would incourage Mike and all others that speak about “income sprinkling as bad/evel thing instead ask Liberal MPs, Bill and JT to rethink and do what conservatives wanted to do – inconme sharing for all canadian families. That would be fair as it will give a signal that FAMILY is a priority, raising kids is priority and this is what needs to be encourages, NOT discouraged.
But it all does not matter, as it’s the continuation of liberal attack on traditional family values – ontario sex-ed, trasgender agenda, pride parades, LGBTQ propaganda in schools or amongst children. And now this “fairness” agenda. I call this BS as it is not fair to families. It may seem to be “fair” to single individuals who think that if someone’s spouse does not have a full-time employment he/she has no right to be part of FAMILY.

#140 X on 08.29.17 at 10:35 pm

re#16 – I don’t think he is crying poverty, but if these tax changes are being implemented based upon ‘fairness’…..it does appear they are paying more than their fair share…I look forward for Mr Morneau to introduce tax fairness where everybody pays the same personal tax rate. That seems reasonable.

To all of the people who post out of jealousy as they don’t earn what some of the business owners do…..Borrow half a million dollars and start a business! Go for it. To make your rent, salary payments, timely deliveries, then you will change your opinion. It is far from a standard 40 hour work week.

Morneau is going to kill every business that does through a lean year, these changes will force business owners to take as much money out of the business every fiscal year. No cash reserves.

re#113-pretty sure Garth is aware no amount of emails will make a difference to Morneau….but I think Garth enjoys being a pain in the ass to him.

re#116-if audited CRA will look for personal expenses to ensure this was not taken advantage of.

I do think that some corps will shut down, and go the sole proprietor route. Accoutants will feel that one. But I do think that a lot of cash will change hands. CRA may feel that one. Even the level of taxation has its tipping point, where it is worth the risk of getting caught by revenue Canada, vs what it takes to earn the money honestly.

I hate going into restaurants or stores where they are ‘cash only’. Far too common. Where is the Liberals proposal for tax fairness to the honest businesses that have to compete with that type of underground cash only businesses. Oh wait, the honest guy, who has registered his business and is operating in a medical practice, where very little cash only transactions are done, is punished by being taxed more. (insert dentist, optometrist, massage therapist, chiropractor, or any other none cash occupation)

#141 Nonplused on 08.29.17 at 10:36 pm

#16 Mark

Employees do not pay taxes, they don’t have any money. Employers, and thus ultimately the customers pay all taxes. Thus taxes are merely a surcharge on what you would have to pay someone who didn’t have his salary taxed. Remember, people work for after tax income. Thus, a plumber who might fix your toilet for $40 an hour with no tax will have to charge you $80 an hour if Moroneau raises his tax rate to 50%. And you pay it ultimately or your toilet stays plugged.

It’s the same with salaried employees, they don’t work for whatever great sounding number their salary sounds like, they work for what goes in the bank. The employer sends the tax money thus they pay it and must raise prices to come up with the money. You have to follow the dollars all the way back to the end customer to see who is paying and guess what? It’s you.

#142 Smoking Man on 08.29.17 at 10:38 pm

I’ve reversed my shorts on Auto MFGs, all those cars under water in Houston will need replacement.

Never let a tragedy go to waist.

#143 saskatoon on 08.29.17 at 10:39 pm

simple: strip government employees of suffrage rights.

#144 Smoking Man on 08.29.17 at 10:43 pm

Once the final edit of my book is done. Hired a Millenial 100 pages and 6 months later it’s almost done.

Changing my twitter profile too.

I’m the Author of Deplorables, blacklisted from Bay and Wall Street. My Crime? openly supported Donald Trump and called out the evils of globalism.

Please help fellow deplorables, got nothing else. Please buy my book and God bless you.

#145 Irish Stew on 08.29.17 at 10:45 pm

Ask the middle class how they have enjoyed that massive tax surge from the 1% they received and what did it really cost the government.

#146 Layoffs are coming on 08.29.17 at 10:51 pm

Acquaintance of mine at a large red telco/cable/wireless company told me they are going through significant layoffs in customer service dept.
Wifey works for an orange fin company and saying theit IT dept slashed a good number of jobs and restructuring their ops. Especially laying off full-timers!
Looks like the big players see what’s coming and are cutting their costs.
What got me thinking is layoffs of full-timers. This is an especially bad sign, as usually when temporary troubles are expected, contractors are the first to be let go. When full-timers are sent packing, employers expect long-term lean times.
Oops?

#147 Paully on 08.29.17 at 10:53 pm

#56 Gasbag Boomer on 08.29.17 at 7:41 pm

“James: Where do you buy a decent boxed wine in Ontario?”

Try your local Magnotta store. Good wines. Better prices.

#148 DON on 08.29.17 at 10:58 pm

#83 Screwed Canadian Millenial on 08.29.17 at 8:18 pm

I haven’t even been around and your comment section is according to you, a bigger disaster than ever. You see Garth, even though you hate Screwed Canadian Millennials, I am the least of your worries.

Does Smoking (too much substance) Man have spell check? I am deeply concerned for his well being.
*************

You are too young to be a prick…grow up!

#149 DON on 08.29.17 at 11:06 pm

I am for a hybrid approach to weed out the bad and enable and encourage entrepreneurship. Valley Boy had the right idea. A wholesale change should not be in the cards.

This is utter stupidity by a short sighted government listening to special interest groups. While you are all at it, stop with the orange, blue, green, red political gangs. Start voting as if your lives and livelihood depend on it.

#150 DON on 08.29.17 at 11:11 pm

Thank you for leaving the comments as is. I have read almost all the comments to date…a good but tiresome study on human nature.

Are we in the denial stage yet?

#151 A man on 08.29.17 at 11:17 pm

#6 Mike on 08.29.17 at 5:59 pm
Can’t agree more….

#152 Pete from St. Cesaire on 08.29.17 at 11:22 pm

#139 Dmitry – Welcome to the comments section. And your analysis of the situation is spot on. Glad to hear that you’re homeschooling, it’s the only way to go these days.

#153 Trojan House on 08.29.17 at 11:23 pm

From Mark:

“I’d merely point out that the business owner here in question is not paying the taxes. Payroll remittances are paid by the employee. HST is paid by the customers. The employer merely acts as a collection agent on behalf of the government, not the actual payor.”

WRONG!

Employers pay half of their employees CPP contribution or 4.95%. They also contribute 1.4 times the employee deduction for employment insurance (EI). Employers pay HST on the things they buy to supply, etc, their business.

Paying their share of CPP and EI are big reasons why they decide to lay people off. It costs big bucks to have employees.

#154 Questions on 08.29.17 at 11:28 pm

I don’t think for a moment that James in Oakville will be impacted. His case is certainly not the scenario they are after.

The problem to me is that this government will reserve the right to impact him, and are communicating as such.

Not a good time for that sort of thing.

#155 Cassandra on 08.29.17 at 11:32 pm

Oh the horrors! They’re coming after your money.

I would expect that, in the very near future, they’ll go after dividends as well, so you might as well just put your spouse on the payroll “officially”, and expect those retained earnings to get taxed sooner or later.

Those of us with bad accountants have had joint- or sole- proprietorships for years and we managed to get by. It’s Canada, not f’ing Shangri-la.

#156 rainclouds on 08.29.17 at 11:34 pm

#94 MF”Funny. Few people admit they voted Liberal anymore.”

few did.

Why do u think Jr ditched electoral reform ?

#157 Cassandra on 08.29.17 at 11:34 pm

I DO wish we could up/downvote posts.

Some people here are deserving.

#158 Manitoba Whale on 08.29.17 at 11:38 pm

#137 Ace Goodheart on 08.29.17 at 10:24 pm
If they’re going to look at fairness in taxation, then they have to also look at fairness in tax dollar expenditures.
*****
If the changes go through as proposed, so be it. I will pay what has to be paid, I don’t sprinkle money around to my kids and for the rest, well I am doing just fine.
I just wouldn’t be so bummed about this or that government policy or plan if I still had faith in their ability to make decisions for the betterment of our country.
It is so sad to see all the grandstanding and divisiveness in politics by all parties today, starting with the federal Liberals. At least in the past you could refrain from watching the newscast or turning to the sports section.
Fairness? No, all that matters to them all is 2019 baby, because, 2019 starts with the next social media story.

#159 Doug on 08.29.17 at 11:39 pm

Talked to my accountant today. Gonna be astronomically penalized for passive income within the Corp if the government follows through on these tax changes. Worked 60-80 hrs a wk most of my life. No pension. No benefits. Compromised vacation time if I could take it since the phone and laptop never far away. Should been way smarter when I was younger. Just should have learned to speak French an get a gov job. 36 hrs a week. Fully indexed pension with benefits. Tons of holidays an NO STRESS! What was I thinking?

#160 FOUR FINGERS WATSON on 08.29.17 at 11:40 pm

Its all our fault. We got what we deserve. We raised a bunch of millennial snowflakes who voted for The Turd. Some of US even voted for The Turd. And he will get reelected too, after he’s finished transferring your wealth to the ” entitled ones “,the snowflakes will vote The Turd in again with an even greater majority, maybe 40% this time hahaha. You get what u deserve. Wake up and smell the Beaver!

#161 HDJ on 08.29.17 at 11:42 pm

It’s all about income inequality, which our taxation policy has intentionally produced over the decades. There are far too many in this country for whom wages are too low and taxes too high – this large percentage of the population has been left behind because every previous government acted in the interests of a wealthy and politically influential minority. And now the Liberals are perhaps moving in small steps to reverse the inequality this greed and political power has produced. I’m glad Trudeau and Morneau are attempting to solve what has become a major societal and economic problem. The world has countless problems that must be addressed, and income inequality is one of them. Ignore the inequality and we’ll all eventually go down the drain.

#162 Fake News Again on 08.29.17 at 11:46 pm

#90 Soviet Capitalist on 08.29.17 at 8:33 pm
This is not about fairness, socialism or some ideology.
Justin needs revenue to reward his voting block. People like entrepreneurs have currency and mostly did not vote for him, so they are the perfect target to fleece.
Want fairness? Then form a bigger voting block than Trudeau’s.

___________________________________

Wrong.

The Govt needs cash to pay for the 150,000 govt workers retiring every year with full gold plated pensions. Meanwhile the private sector continues to get screwed. Good luck with that….

#163 BS on 08.30.17 at 12:20 am

#16 Mark on 08.29.17 at 6:27 pm
“We pay a LOT of taxes. Six figures of payroll remittances every month, six figures of HST every quarter,”

I’d merely point out that the business owner here in question is not paying the taxes. Payroll remittances are paid by the employee. HST is paid by the customers. The employer merely acts as a collection agent on behalf of the government, not the actual payor.

Payroll remittances include CPP which is directly paid 50% by the employer and EI which is directly paid over 50% by the employer. Note the income taxes that are paid are originally paid by the employer as a wage. All HST paid is generated from company revenue that the employer creates.

Furthermore, how much does he paid to collect and remit all that HST and payroll taxes? Nothing.

You would think keeping a minor personal tax break that currently exists for a family would not be asking too much for all of the above. But I guess for a guy who probably collects a cheque from the government every month rather than remitting one this is difficult to understand. It sounds like the Liberal government would prefer to have more people collecting the cheques from them rather than running enterprises that provide the funds to the government to be able to pay those cheques to those who need them.

This type of policy simply shifts more people from being net tax payers to people who collect more government benefits than they pay towards. Punishing those who work hard, create jobs and are massive net tax payers towards government is not the way to drive the economy. You drive an economy by rewarding people who create jobs and drive the economy. There are too few people currently who do this to put further disincentives in place.

#164 Sus on 08.30.17 at 12:20 am

#124- what will be next? Inheritance tax of course, there’s a huge pile of money waiting to be stripped.

#165 NS on 08.30.17 at 12:27 am

#104 Valleyboy
Here’s a post just for you:
https://taxburst.wordpress.com/2017/08/29/jerry-they-get-to-write-off-everything/

#166 Mark on 08.30.17 at 12:32 am

Easy pick. Puppies.

#167 BS on 08.30.17 at 12:33 am

#116 Matt on 08.29.17 at 9:38 pm
Don’t forget small business people get to write nearly everything off ….need toilet paper for the house buy it through the business….need gas for your personal car buy it through the business….Friday night date night with the wife sounds like a business entertainment expense….I see hundreds of self employed tax returns a year and it’s rediculous how little most small businesses actually pay in tax. It’s about time they start to crack down on it but not far enough… they will still get to write off their personal expenses and hide them as a business expense

Small business people don’t get to write off any of those things you listed. If they do it is tax evasion.

If you see “hundreds” of self employed tax returns a year that do this maybe you should report this fraud to CRA rather than complain about it on a blog.

If this type of thing is a big problem don’t you think CRA would be better off focusing their resources on collecting taxes that are already due under current laws rather than making new laws that collect taxes from those businesses that are legitimately paying them now?

#168 JSS on 08.30.17 at 12:54 am

No sympathies from me for the starving business owners.

I am on Mr. Morneau’s side on this one.
Go Bill go!

Also – tummy rub – Scotia bank – dividend increase!

#169 BS on 08.30.17 at 12:54 am

39 Dmitry on 08.29.17 at 10:32 pm

…This new proposed law discourages having a family here in Canada as it’s basically does not put any incentive to have family, as financially there would be absolutely no difference…

I will add not only does it discourage keeping the family unit together, in most cases it hurts the female spouse should the family split up. It is the female spouse who in most cases receives the dividend income in her account in order to income sprinkle. This income is the female spouses money to do what she wants and provides more property rights should there be a divorce. If there was no income sprinkling the funds would stay in (mostly) the male spouses account and would give the female spouse no direct control. Should there be a divorce the female spouse would have to fight in court to get anything. Under current rules income is mostly split and the female already has her share of the money in her own account under her control.

#170 M-cube on 08.30.17 at 1:14 am

If I was Bill, I would toss the letter from James (in Oakville) in the rubbish bin. Why? Because it fails to mention what net income is associated with the various taxes he complains of paying.

Is he taking home $45,000/year after paying $300,000/year in tax?

OR

Is he taking home $4,500,000/year after paying $300,000/year in tax?

Big difference in my sympathy for his situation. But he failed to mention that little bit of info, so my next question is…why?

Dear Bill….time to buy a large shredder for the all the complaint letters you have been receiving that seem to be omitting critical details.

#171 Cd on 08.30.17 at 1:19 am

Garth, with your governmental experience I am wondering if you know how much of the changes come directly from bill m? Does his staff shape policy and can they take the blame? Or are the ideas pushed down from the party?

#172 Vanrentor on 08.30.17 at 1:39 am

https://qz.com/1064061/house-flippers-triggered-the-us-housing-market-crash-not-poor-subprime-borrowers-a-new-study-shows/

House flippers triggered the US housing market crash, not poor subprime borrowers

The grim tale of America’s “subprime mortgage crisis” delivers one of those stinging moral slaps that Americans seem to favor in their histories. Poor people were reckless and stupid, banks got greedy. Layer in some Wall Street dark arts, and there you have it: a global financial crisis.
Dark arts notwithstanding, that’s not what really happened, though.
Mounting evidence suggests that the notion that the 2007 crash happened because people with shoddy credit borrowed to buy houses they couldn’t afford is just plain wrong. The latest comes in a new NBER working paper arguing that it was wealthy or middle-class house-flipping speculators who blew up the bubble to cataclysmic proportions, and then wrecked local housing markets when they defaulted en masse.

#173 SoggyShorts on 08.30.17 at 2:04 am

#102 mike from mtl on 08.29.17 at 9:05 pm
I believe the core issue is taxation itself needs to be reimagined. And no, total anarchy bartering rocks and ammo libtard style is not the answer.

The current construct is needlessly complex, catering to exceptions, special interests, you know the usual.

F-all that. Simply put a flat dunno say 8% tax on EVERY “cash” real or digital transition, no exceptions.
*******************************
So just sales tax? No income tax at all? it would have to be a hell of a lot higher than 8%, more like 50%+
I for one would squirrel everything away and try to fins a way to take it out of the country for retirement.

#104 Valleyboy on 08.29.17 at 9:13 pm
so the average wage in Canada is 50k. So these poor poor business folk that probably are cleaning up clearing 200k plus.

Wrong. 2/3 of small buisness owners make under 73K
http://www.cfib-fcei.ca/english/article/8343-canada-s-small-business-owners-are-four-times-more-likely-to-be-low-income-than-rich.html

#116 Matt on 08.29.17 at 9:38 pm
Don’t forget small business people get to write nearly everything off ….need toilet paper for the house buy it through the business….need gas for your personal car buy it through the business….Friday night date night with the wife sounds like a business entertainment expense….I see hundreds of self employed tax returns a year and it’s rediculous how little most small businesses actually pay in tax. It’s about time they start to crack down on it but not far enough… they will still get to write off their personal expenses and hide them as a business expense
***************************
What you are describing is A CRIME, and has nothing to do with the proposed changes.

#174 n1tro on 08.30.17 at 2:09 am

All you butt hurt posters going on about fairness… Learn your place. Life isn’t fair. Never will be. Instead of wishing others misery because your life sucks, do something about it.

As stated many times, doctors were encouraged to be individual corporations by the government because they didn’t want to pay out more for their services. Your opinion on whether they are a “real” business or not is moot.

As for the other whiners on some of the entrepreneurs who have shared their stories. Who the hell gives you the right to diminish their contributions? They just act as an agent remitting taxes, blah,blah,blah… What you cry babies conveniently forget is that entrepreneurs create economic activity by the sheer fact of doing business. More so than an employee collecting a paycheck. If the entrepreneur makes a ton of money, good for them. Let them get rich and fat using whatever legal loophole created by the government because they add a ton more value than you whiners.

This ” fairness” tax will most likely go through and idiots will cheer. But know this, the “evil” doctors and entrepreneurs will still make more money than you while you toil away at your worthless lives full of bitter resentment.

Wake up already and realize you are being played by devisive politics. The irony is that it is coming from politicians that have used the same “loopholes” to keep their money in their pockets in the past.

Change your mind set, change your life.

#175 jane24 on 08.30.17 at 2:18 am

Sorry Garth but I totally disagree with you on this one.

In the 1980’s I was a very successful Toronto RE agent and I opened a small company on my accountant’s advice so I could legally siphon money off to pay my stay at-home -with-kids hubby a good wage with little tax for him and reduced overall taxes for me.

At the time I had moral issues with it and I did think it was totally unfair on regular working Canadians but I did it any way. I guess human greed.

My thoughts on this procedure for avoiding income taxes has not changed. It is wrong and very unfair on your fellow citizens. And this from a Conservative Chair, myself!!!

#176 Ponzius Pilatus on 08.30.17 at 3:15 am

#75 wallflower on 08.29.17 at 8:06 pm
Sent: Sunday, August 27, 2017 9:28 PM
To: ‘[email protected]
Subject: the changes

Completed a business plan early 2017. Likely not going to launch now.
Ontariowe and Canada seem both quite hostile toward business.
Banks have no interest in lending to small biz.
So the risk is high and the reward is questionable.
————
Banks don’t lend to small biz.
Guess why.
Most small biz owners have no business plan, just the desire to “Be their own Boss”.
And BTW, most small bizs are not making it past their first year.

#177 crayshrimper on 08.30.17 at 3:33 am

#57 jim on 08.29.17 at 7:43 pm

#27

“Why? Canada has no sole.”

Sheesh, this issue was complicated enough before someone brought fisheries management into play.”

I am making this comment just for the Halibut!

#178 When Will They Raise Rates? on 08.30.17 at 3:55 am

There are an infinite number of ways to legally avoid theft/taxation on income (if you’re not an employee) that Garth is either unaware of, or simply can’t get into… I’ve previously outlined one method that I myself use. This new law will have zero effect on those who refuse to have their wealth stolen.

All I can recommend is that you do your own research, think outside the box, and for chrissakes, stop funding your own enslavement!

Starve the beast.

And vote Libertarian.

http://www.libertarian.ca/

#179 Jay (not that one) on 08.30.17 at 4:41 am

This whole “us vs. them” philosophy is only going to play into the Liberals hands.

For 2 big reasons.

1. The false “only business owners” statements directly contradict reality. “Only business owners take risks. Only business owners spend money to make money. Only business owners hire people. Only business owners need supportive wives” — bollocks. If things you’re saying contradict what people experience, then you are only going to fire up people who already believe you, and you’re going to convince people on the fence that you’re wrong — even if you’re not wrong about the larger message.

2. Taking nuanced opinion and slashing it into “this is what everyone who disagrees with me believes” is once again going to fire up people who agree with you, but it’s a Gambit that, if you get it wrong, will convince people on the fence that you don’t know what you’re talking about.

For these reasons, even though philosophically I could be convinced, you’re instead convincing me that business owners are small-minded, unscrupulous, entitled folks who have no idea what other people do to make their money and feel morally obliged to their sketchball tax loopholes by virtue of that ignorance.

Since we’re talking about a tiny minority trying to convince a larger majority why they deserve special treatment, this isn’t a great way to go about doing it.

#180 FLHTK on 08.30.17 at 5:41 am

Wow! These people need to give their heads a shake. Over spending liberals and now it’s catching up and they’re trying to come up with more ways to generate income.

Came across an interesting article from a Doctors perspective…..she says she puts 60k away for retirement…..thats almost what I make in a year! Not going to lie….kind of jealous she can save that much!
http://nationalpost.com/news/politics/john-ivison-surprise-doctors-dont-like-being-branded-tax-cheats/wcm/af529316-948e-4277-9b59-3ed218428969

#181 Dharma Bum on 08.30.17 at 7:01 am

Trudeau & Morneau = eau eau (“Oh-oh”)

https://www.youtube.com/watch?v=cIPfEBuA7HY

#182 fancy_pants on 08.30.17 at 7:31 am

good choice with the church sign pic today … I suspect charitable organizations and the definition of such will be next in the cross hairs in the not so distant future.

It’s another gold mine if they tighten or remove charitable non-refundable tax credits, I mean it would hit those who clearly have money to burn right?

luckily it’s different here because we all know “the budget will balance itself”.

#183 fancy_pants on 08.30.17 at 7:32 am

Good choice with the church sign pic today … I suspect charitable organizations and the definition of such will be next in the cross hairs in the not so distant future.

It’s another gold mine if they tighten or remove charitable non-refundable tax credits, I mean it would hit those who clearly have money to burn right?

… but of course that will never happen because we all know “the budget will balance itself” ;)

#184 Trumpocalypse2017 on 08.30.17 at 8:10 am

Get ready. North Korea will be hitting Guam, and then after Trump responds……

New York City.

http://www.msn.com/en-ca/news/world/what-would-nuclear-war-with-north-korea-look-like/ar-AAqWZyI?li=AAggNb9&ocid=mailsignout

Only fools are not preparing.

#185 Trumpocalypse2017 on 08.30.17 at 8:10 am

Get ready. North Korea will be hitting Guam, and then after Trump responds……

New York City.

http://www.msn.com/en-ca/news/world/what-would-nuclear-war-with-north-korea-look-like/ar-AAqWZyI?li=AAggNb9&ocid=mailsignout

Only fools are not preparing.

#186 maxx on 08.30.17 at 8:15 am

Much more tax revenue is lost in “under the table” transactions.

#187 Dissident on 08.30.17 at 8:36 am

RE – #1 trexx on 08.29.17 at 5:45 pm
42.5% of all Canadians income now services taxes.

It was that way under Harper too, don’t forget. Its disgusting. For example, after a $55K paycheque, I can keep $33K. Enjoy saving for retirement and paying off a 750K house!!! Not!

I feel like whining is the only thing Canadians have in common, for this very reason.

Oh, and why do you think the ‘economy and jobs’ look a bit better? A) they are giving you fudged numbers to justify a rate hike, and B) maybe people started working EVEN MORE hours to pay for the expensive houses they are now on the hook for!

#188 Smoking Man on 08.30.17 at 8:39 am

This 45 min clip explains the argument we are having right now in the comments section.

https://youtu.be/FDkWYtUnQnA

#189 Smoking Man on 08.30.17 at 8:40 am

This 45 min clip explains the argument we are having right now in the comments section.

https://youtu.be/FDkWYtUnQnA

#190 Q2 Class 2-B-C-2 Duplex Drive on 08.30.17 at 8:46 am

It goes without saying that Stephen Harper likely would not have put through such regressive changes. But people thought he was a creep! Justin is so cute and so cool, and he has a tat and everything!

#191 Tater on 08.30.17 at 8:49 am

The benefit of being self employed is that you keep ALL of the profit you generate.

If you’re a lawyer or an investment banker, you’d need to generate 5 to 10 times the profit to reap the same personal reward. That’s why people start their own businesses. And, sorry entrepreneurs, 50 hours a week isn’t that much. Plenty of salaried people, making 70 or 80k are putting in those hours. Not getting paid overtime, but under threat of losing their job if they don’t.

The reward you get from starting a business is much more autonomy and the chance to keep all profits. You don’t need a tax break as well.

#192 Gyga on 08.30.17 at 9:03 am

#139 Dmitry
Great comment
15.5% regardless if dividends+personal income tax
if you pay her as self-employed, still personal incometax adn CPP
if you pay her as employee, double CPP+personal incometax

What tax loop hole are we talking about??

#193 Ponzius Pilatus on 08.30.17 at 9:19 am

#110 Tim from Timmons on 08.29.17 at 9:23 pm
The incentive for being a capitalist is that you receive the profit of the enterprise, not that you get special tax breaks. Confusing the two is just dumb.
———–
Exactly.

#194 Leo Trollstoy on 08.30.17 at 9:22 am

#179 Jay (not that one) on 08.30.17 at 4:41 am
This whole “us vs. them” philosophy is only going to play into the Liberals hands.

For 1 big reason…

most people are scared, mediocre, wage slaves

#195 Ponzius Pilatus on 08.30.17 at 9:22 am

Saying “The small biz owner takes all the risk” is like saying “houses prices will always go up”.

#196 Ace Goodheart on 08.30.17 at 9:22 am

#186 Dissident on 08.30.17 at 8:36 am:

Have a look here:

https://simpletax.ca/calculator

$150,000 employment income = $49,312.00 in income tax

$150,000 self employed income = $50,041.00 in income tax

$150,000 dividend income = $22,584.00 in income tax

$150,000 capital gains income = $15,735.00 in income tax

The self employed are taxed the highest, followed by employees.

The wealthy, who do not work and earn their incomes off of dividends and capital gains, are taxed the least.

This is the way it has always been and likely always will be.

Ask your MP about this. Chances are, most of his or her income comes from dividends and capital gains. Why won’t they change this?

Because the wealthy don’t like paying taxes.

#197 Leo Trollstoy on 08.30.17 at 9:27 am

#153 Trojan House on 08.29.17 at 11:23 pm
WRONG!

Employers pay half of their employees CPP contribution or 4.95%. They also contribute 1.4 times the employee deduction for employment insurance (EI). Employers pay HST on the things they buy to supply, etc, their business.

Paying their share of CPP and EI are big reasons why they decide to lay people off. It costs big bucks to have employees.

Mark the unemployed, who can’t find a well-paying job in a Canadian boom despite having 2 STEM degrees, gets skuled on entrepreneurship (and everything else)

What a surprise…

#198 Leo Trollstoy on 08.30.17 at 9:37 am

US BOOOOOOMING!

GDP revised UPWARDS!

https://www.cnbc.com/2017/08/30/us-revised-second-quarter-gdp.html

#199 Gonkman on 08.30.17 at 9:40 am

#162 Fake News Again on 08.29.17 at 11:46 pm

Wrong.

The Govt needs cash to pay for the 150,000 govt workers retiring every year with full gold plated pensions. Meanwhile the private sector continues to get screwed. Good luck with that….
___________________________________

No your Wrong…

Public Service Pension plan has almost 100 BILLION $ in it.. And there isn’t 150,000 Government employees retiring each year… LOL

Pension Plan is Privately Managaged.

http://www.investpsp.com/en/public-service-pen-plan-ff.html

Fast Facts
Fiscal year 2017 net return: 12.8%
Fiscal year 2017 comprehensive income: $11,012 million
Total net assets as at March 31, 2017: $98,447 million

Try again…

#200 Keith in Calgary on 08.30.17 at 9:40 am

I scrolled past the 180 odd comments here already, and didn’t read any of them, because those that whine are merely “canards”……….

Politically I am a conservative. On the spectrum of things, my beliefs are to the right of those held by Genghis Khan.

I have yet to see anyone here explain in a logical manner how “income sprinkling” is not immoral, unethical, or outright fraudulent. Not one person can do this, because it is so.

I have yet to see anyone here say that they decided to run a small business “specifically” to make the exact same amount of money as they made when working as an employee. Not one, because you don’t, you make a lot more. I cleared 4-5 times as much when I ran my business for example, and that was just in salary.

#201 Ponzius Pilatus on 08.30.17 at 9:40 am

People are complaining about too many gvt employees.
But want more CRA agents.

#202 waiting on the westcoast on 08.30.17 at 9:42 am

US GDP continues to push up… prior quarters revised up. From CNBC…

“With GDP quickening in the second quarter, the economy grew 2.1 percent in the first half of 2017. That was up from the 1.9 percent reported last month.”

https://www.cnbc.com/2017/08/30/us-revised-second-quarter-gdp.html

#203 Ludacris on 08.30.17 at 9:56 am

For all the non self employed Canadiabs happy to see business owners get over taxed, all I can say this will be a case of careful what you wish for.

For starters business owner or non business owner we as Canadians value everyone in Canada as equal ? So why do these non business owners enjoy seeing a group of Canadians overtax or treated unfairly ? It’s not very Canadian.

2nd as a small business owner myself. Let me tell all you hating negative Canadians , we are business owners we adapt always to business change, this means we will adapt and guess who will pay the price ? That’s right you the eomployees. You will lose hours / raises / etc because we will adapt and cut back. It’s real simple. This is an actual attack on employees. We the business owners have always run business as business , so no hard feelings when we drop the hours and people we employee. It’s all fair and just right ?

Lastly something people need to think about. Lots of business owners have money saved away. That means we can stop working and still have money to live and enjoy life. Can you employees say the same thing ? After you lose your job will you still be able to live when the pay cheque runs out ? Or will you beg for an actual job / work?

Again keep in mind “careful what you wish for” might be even harder to find a job

#204 Wrk.dover on 08.30.17 at 10:00 am

It is hard to support either side of an argument about an obsolete method of taxation.

Clinton could not initiate Canadian style healthcare because millions of insurance industry administration jobs would have been redundant with the stroke of a pen.

So along came Obama care which left all of the redundant parasitic jobs intact, at great wasted expense.

Now here are all of you on the internet, bickering over rules, loop holes, accounting methods All of which are archaic hold overs from the pencil, pen and paper ledger, postal, horse and railroad era.

When the currency goes digital, every transaction from pay to purchase, can be done rubbing cell phones together. Central administration will withhold a certain percentage from each parties phone for revenue stream. Automatically every time, no exceptions

End of story. No statements to file ever. Govt. revenue collected fairly, same percentage of contribution from all purchases, sales, earnings and a new one…wages payed out (or there will be abuses right there on a can’t exist exemption for that reason key). Besides that, it will replace corporate tax, and probably gross pay will need to be less because net pay will increase, so the employer has the leftover difference for wage payed tax right there. It is the other half of the income tax the employee pays in effect.

No more accounting industry, no more advantaged people, no more disadvantaged people missing out on loopholes applying to them that they were unaware of.

Barter will be the way of underground transactions. Mow my lawn and so you don’t get nicked, I will give you a bottle of booze I payed the transaction tax on…so that is only half a cheat…but big hairy deal, there are more ways to do underground as the system stands, including especially within the office towers with legal accounting methods twisted to fit.

Imagine. No kinds of income tax at all, just a lost percentage every time money changes hands.

And the trust fund selfie lad can refund the taxed transactions on the first ten grand earned, clawing back the percentage on that transaction too.

#205 Sue on 08.30.17 at 10:00 am

#137 Ace Goodheart on 08.29.17 at 10:24 pm

Cheers to that! Enjoy your common sense comments. Have we hit peak taxation? now the privare sector will be as unproductive as the public sector, and we will run out of ‘other peoples money’ then what happens. What can we do? How do we organize and change this country when the Brad Walls leave politics? I will focus on my family and crunching the numbers to work as little as possible and pay the least taxes possible. Whats the point anymore. If these changes do go through the conservatives have just won the next election. Only 781 days until next federal election. The substitute drama teacher has done enough damage. Need one of those ‘make canada great, make trudeau a drama teacher again hats….

#206 Greg on 08.30.17 at 10:17 am

At the very beginning of this blog you spelled Moron wrong!

#207 Spock on 08.30.17 at 10:19 am

I propose that to make things fair:

1. Remove defined benefit pension plan for all those who depend on tax payers to match.

2. Remove health benefits and make it 100% employee paid.

3. Remove paid vacations for employees

4. Remove EI

5. Allow employees to split income once the above are implemented.

Not a lot of people realize that for investments within a corporation – interest income is already taxed at the highest rate 52% + from the first dollar. Same goes for dividends and capital gains – taxed at highest bracket regardless of business income.

#208 Pritzl on 08.30.17 at 10:27 am

I think people may be over-reacting and taking Bill’s proposals out of context. My wife is a physician and she attended a financial planning seminar where the tutor, who shall remain anonymous, explicitly outlined how to “take advantage of the tax code”. We’re not talking about fair compensation for spouse or reasonable business expenses. We are talking about some really shady practices like gifting money, paying grandma $40K for baby-sitting and deducting everything under the sun.

I think this latter unethical exploitation of the rules that will be cracked down on. I doubt that a legitimate business expense will be jeopardized. There are going to be mistakes made of course, but I think the intention is to eliminate tax cheats who are gaming the system.

I will not speak to fair or not because that is subjective. For example, I don’t see taking a risk to start a business as somehow more valuable than a salaried job and therefore justly deserving of more recompense. You may disagree and you’re entitled to. Neither of us can deny though that abusing a system benefits no one but the abuser.

#209 Nick on 08.30.17 at 10:28 am

Don’t kid yourselves. These measures are going through no matter how many letters and complainers there are. I own my own company, I have a holdco, etc. fortunately (stupidly??) I never took advantage of income splitting in a corporation because my wife has her own gig and it never fully felt legit. I do take issue with the attack on retained earnings. I hedge my ups and downs by keeping money in the company as a buffer. That is just wise financial planning, and now I’m being told I’m a crook.

I agree with some of the sentiment here that someone whining about paying $225k/yr in taxes will fall on deaf ears as the prollies will cheer at his greed being devoured and BM (Bill Morneau or Bowel Movement?) know it.

Taxes will continue to only go one way. Over 53% in the upper bracket in Ontario. This parasite of a government needs to cover its interest payments which will be going up for everyone including them.

The stupid sheeple keep voting them in (not that the alternatives are any better). My prediction: Libs get in again next round and taxes go up another 10%.

Screw it, I’ve bought my homes/cars/boats. I don’t need the money, I will coast the business, take marginal salary and let the prolies clammer for jobs that someone else can work to make.

There is no incentive in this country to work hard and save, since you’re beaten down on both fronts. I know several other business owners that are fed up like me.

I hope the government raises income taxes to 100%. Perhaps then the “deplorables” will get motivated.

#210 Headhunter on 08.30.17 at 10:32 am

“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.” Ayn Rand

#211 rainclouds on 08.30.17 at 10:35 am

The Oracle explains “Bubbles” It seems to fit certain RE markets to a T

http://www.businessinsider.com/warren-buffett-explains-how-bubbles-formed-2017-8

#212 Webfeatmm on 08.30.17 at 10:36 am

Man, people sure do get whiney when they’re picked to share a bigger part of the tax burden. The new rules say you can’t share income for tax purposes with your spouse and adult children. That’s it! Why should this be even worth debating? Why should two single people have to pay more taxes than a married couple? The entrepreneur who takes tremendous risks to start a new business *and just happens to not be married* has been taking it up the nether regions.

#213 Wrk.dover on 08.30.17 at 10:39 am

And all of those redundant suits? Such as accountants, tax lawyers and their ilk, they can get retraining, to work in the fields. Fresh air may rehabilitate them to human standards of being, as a side effect!

#214 Dmitry on 08.30.17 at 10:48 am

#195 Ace Goodheart
There tax calculator does not account for 15.5% corporate tax paid BEFORE dividends can be paid. So really first 15.5% small business corporate tax needs to be applied to $150K in your example and only then PERSONAL income tax paid on dividends. So after paying 15.5% corporate tax on $150K ~127K left. After paying PERSONAL tax on ~127K dividends one would have ~102K in their pocket. That’s almost the same as 100K in employment income. So where is the so called huge “tax shelter” advantage here that a lot of people who have no idea how small businesses and dividends are taxed are talking about??? There’s a disadvantage with all-dividend income, however. It is considered as non-active income, so not eligible for RRSPs, for example (in the sense that you would not get a refund). Can’t make CPP contributions, so no pension.

#215 Dmitry on 08.30.17 at 10:51 am

#199 Keith in Calgary

Please read my comment #139 and tell how it all does not make sense? It would not make sense to you if you’re single and do not have spouse and kids.

#216 n1tro on 08.30.17 at 10:54 am

#175 jane24 on 08.30.17 at 2:18 am

Hey Jane,

Pay back all the money you stole from the rest of us Canadians back in the 80s. The CRA will gladly take an amended tax filing and the cheque you send along. No? Then your opinion doesn’t count.

#217 Eks dee Sipal on 08.30.17 at 10:56 am

Rich people complaining about taxes. That’s rich. LOL. If your business isn’t producing enough money to literally give away and also have enough left over to buy that second Maserati in your 50 foot driveway, then you should close shop and be an employee. Simple math. But of course, you would never do that because freedom from a small business owner bossing you around is priceless, and worth the slog. Oh, the irony.

Aaaanyway, did anyone see this? B…b…b…but the EV revolution is 10 years away…said some stubborn blog dogs… I recommend you get your ducks in order.

http://www.canadianmanufacturing.com/manufacturing/cummins-unveils-fully-electric-heavy-duty-truck-200377/

#218 Frank on 08.30.17 at 10:59 am

Why don’t you publish letters from people who earn in the bottom 5% of incomes instead of the top. See if they suffer and feel sorry for themselves.

#219 Feds on 08.30.17 at 11:02 am

I work for a gov’t entity with a pension. If as you say it is better to be an employee, why is it that all of our IT staff go out of their way to be personal corporations and stay consultants instead of coming on board. Eventually some are forced to by tax laws, but will either leave or remain external as long as possible. Why would they give up all these benefits? Because they know that they get a much better deal writing off everything and paying out dividends to family that are taxed so low the income is almost free. These people take no risk and hire no real employees.

#220 conan on 08.30.17 at 11:08 am

Wrk.dover on 08.30.17 at 10:00 am

“So along came Obama care which left all of the redundant parasitic jobs intact, at great wasted expense.”

Those are private industry jobs. Are you advocating replacing these people with Government workers? Do you really think that would save any money?

Obama was going for a hybrid private public plan. Problem is the initial downloading of immediate and future health claims has to be paid for by someone. Hint, its the premium payer.

The Republicans have no viable alternative to this plan. The only solution is time. As the plan needs to bounce back from the initial wave of claims.

#221 Dmitry on 08.30.17 at 11:09 am

#213 Frank
Because it’s capitalist, not communism!
If you want all people earn the same – it’s what we had in CCCP and it was evil communism. OK, CCCP collapsed, capitalism won and that made all progressive world happy as there was pretty much no more evil communism.
So it’s the nature of the capitalism that some people will earn minimum wage, some of them will do for the rest of their life. I was earning minimum wage myself when I started my life in Canada and I had absolutely no problem with that. I knew that if I learn, study, make efforts, upgrade my skills, change jobs, open my own business I can earn more – absolutely all people can do that, there’s no restrictions here in Canada not to do that.

#222 45north on 08.30.17 at 11:15 am

Mike: Talking about business owners taking risks – do employees not take risk?

let’s talk about the civil service where I worked for 40 years. How does the civil service handle risk? I would say the successful civil servant identifies risk and avoids it. My first assignment at Statistics Canada was the Bail Reform Survey – the idea was to go out to the courts and see how the new law was actually applied. There was considerable risk because Stats Canada had not done anything like this before, it had no established contacts with the courts and really had no idea what they did. Well the people at Stats Can did have an idea but they didn’t have years of experience with the courts in all the provinces. So senior management set up the Bail Reform Survey as a separate entity, it was run by a project manager who was pretty much on his own. Half way through the project he realized that the project was on shaky ground and got himself transferred out. The new project manager naively accepted the new position and I suppose thought he was doing well. Well the project finished more or less on time and on budget but then the Justice Department ordered an independent review which came back with a negative recommendation “the survey cannot be used for policy decisions”. I wasn’t in the room when the new project manager presented this review to Stats Can management but I believe that his career was negatively impacted.

Here is a report written by the Justice Department:

https://www.publicsafety.gc.ca/lbrr/archives/ke%204381%20m4%201976-eng.pdf

the report does mention the Bail Reform Survey but only just:
Indeed, in a 1973 Canadian survey (17) , release decisions by the police either with or without arrest – with later appearance before a justice accommodated by issuance of various forms of bail (18) – amounted to 81% of total cases in the sample.

but what about Shared Services which is now consuming $1.4 billion a year with no end in sight? What was the risk that the new department would be a failure? It is a failure because it has failed to meet its stated goal of saving money, it has wasted resources to no purpose and distracted and demoralized the IT divisions in each department. I think that individual senior civil servants have had to work harder to try to patch things up but there has been no accounting of the overall decision to launch Shared Services.

#223 Eks dee Sipal on 08.30.17 at 11:21 am

#196 Leo Trollstoy

Mark the unemployed….

You are unemployed too, right Leo? Doesn’t appear you have any education to speak of. You lucked out on some US RE. Who cares. No one. In the process of saving yourself from becoming one of the wage slaves, you should ask yourself: Is there anything left to save?

#224 Damifino on 08.30.17 at 11:24 am

#176 Ponzius Pilatus

Banks don’t lend to small biz.
Guess why.
Most small biz owners have no business plan, just the desire to “Be their own Boss”.
And BTW, most small bizs are not making it past their first year.

————————————

But banks lend money to home owners. And they have no business plan other than they want to “own a home”.

Some of them are making it well past their first year at which point they cash out with huge a tax free gains. When are we going to close that “loophole”?

#225 Rexx Rock on 08.30.17 at 11:27 am

You have to remember Canadians basically are lifelong tax serfs.Puerto Rico is now a great place to live even part time if you want to save on taxes if your’re an American.

#226 Matsebula on 08.30.17 at 11:27 am

Could be wrong, but if a small business retains earnings (post 15% CCPC small business tax) can they not invest in stock and get around the ‘passive income’ regs?

The business would pay capital gains rates at 50% of the investment income rates, so the tax basis would still be very low. Just invest in a cap growth fashion rather than an income or dividend oriented fashion.

#227 Matsebula on 08.30.17 at 11:32 am

And wow, these comments. No wonder T2 is able to put in rules like this. All the lazy people hate people who start businesses and create jobs.

50% (!!!) of jobs come from small businesses. Most small businesses fail. Consider any (very small) tax advantages as a risk premium that induces people to take a calculated risk to deploy their capital into a business opportunity. Take that incentive away, and don’t be surprised if business people stop taking these risks and creating jobs. It takes skill and energy to run a business and most people don’t have what it takes to make it work.

And there are many great points made above about why business owners would retain earnings. Punishing that takes away a very important leveling mechanism that makes running a business somewhat less risky.

Capital flight is real.

#228 Euro Observer on 08.30.17 at 11:33 am

So the owners of Canadian Small Business Corporations are overreacting eh?

Let’s see:

You have an official intentionally calling bluntly ALL small business owners tax cheaters. Read his paper.
He pretty much states that small corporations are set in order to avoid taxes.

So you are a doctor working by the LEGAL rules all your life and now when a lying (hiding the truth is lying), not pretty looking politician is trying to cheat you out of your retirement and life efforts while being cheered by marginalized public (or maybe robo-postings by the lieberals scum bag public opinion machine? GT can confirm the profile of the ‘supporters’ of this bill) you are overreacting?

The message should be send directly to the wild guy and selfie boy handlers: F.ck Y.u.

#229 calgaryPhantom on 08.30.17 at 11:36 am

As i have said before, times have changed.

Full time employment is as risky as running a business, if not more. There is no more of working at one company for 35 years and retire. There is NO safe job. So why don’t full time employees get that “risk” premium?

I think it’s only fair. Either both streams get rewarded for risk, or none.

#230 Mike in Toronto on 08.30.17 at 11:41 am

#216 Eks dee Sipal

Corporations require me to incorporate to protect themselves from liability and to keep from having to provide me with benefits as an employee.

It’s a huge waste of time and source of stress.

There are three layers of corporations and multiple insurance policies and contracts between my ‘customer’ and I.

I tolerate it in part because Dalton decided that as an employee I’m overtime ‘exempt’.

I don’t take any tax shortcuts except maybe stretching my income through periods between contracts, and paying for education and training with corporate dollars.

I don’t even expense my meals or vehicle milage.

#231 n1tro on 08.30.17 at 11:43 am

#104 Valleyboy on 08.29.17 at 9:13 pm
so the average wage in Canada is 50k. So these poor poor business folk that probably are cleaning up clearing 200k plus. Cell phone wright offs, vehicle wright off’s, home wright offs, yes you took a risk but do you really feel when the risk pans out you deserve assloads of cash more than the average Canadian wage.
————————-
Please finish high school before making your complaints about others making more than you. They make more for the right, write, rite, or is it wright reasons.

#232 Joe Schmoe on 08.30.17 at 11:46 am

The supporters of the tax increase look at what is left after taxes as the measurement of ‘fair’. Not what is paid.

That is the false logic being applied.

#233 Mike in Toronto on 08.30.17 at 11:49 am

#195 Ace Goodheart

Look up the theory of tax integration as it applies to dividends. This is very basic stuff.

To spell it out: Dividends are paid from money which was already taxed as corporate income. Personal income is instead tax deductable.

The sum of the taxes are roughly the same.

#234 Ace Goodheart on 08.30.17 at 12:03 pm

RE: #213 Dmitry on 08.30.17 at 10:48 am:

You misunderstand me. I am not talking about small businesses. The tax changes that they are going to make, will effect only small businesses.

My comment is aimed at the 1% of our society who earn their incomes mostly from capital gains and dividends. These individuals do not usually operate or own the businesses that pay them dividends and do not usually control the assets that pay them capital gains.

I earn quite a bit of income myself using the above noted method. I don’t pay corporate tax, because I don’t own the corporation. I pay tax on the dividends, and claim the dividend tax credit, making my effective tax rate on dividends somewhere around 22%. This is true whether I earn $150,000 in dividends or $1,000,000.00.

Someone who earns $1,000,000 per year in salary is paying more than 1/2 of that back in income tax.

Someone who takes stock options, earns dividends and cashes in capital gains, and earns 1,000,000 per year doing that, is paying around 18% tax on that, rather than around 52% aggregate tax for the person earning it as a salary.

That is if you don’t own the business and are not a small business person (which is how wealthy folks earn their income).

I know this to be true, because as I said, I do it myself. If i was to actually work and earn my income as a salary or as business income, my taxes would go up around 60% (ie, instead of paying around 20% tax on my income, I would be paying around 50%).

All the small business tax changes really do, is tax working people more, those people being small business operators. These tax changes do not touch the 1% at all. A doctor, a lawyer, an accountant, an IT person, a small business operator, is not part of the 1%. What distinguishes the 1% from everyone else is that they earn most of their income from NOT WORKING.

#235 Jay on 08.30.17 at 12:04 pm

In response to the commenters who do not understand what business owners are upset about, let me frame it in a way that you will understand and that fits with a major theme of this blog. Let’s compare a business to a home.
Let’s replace the term retained earnings with its alternate definition : shareholder / owner’s equity.
Let’s replace the term corporation with the term house.
Let’s say that one of the major reasons why you decided to enter into a high level investment with risk was the capital gains exemption afforded to individuals who do so when buying a home.
Let’s then say the government changes the rules and now wants to come and tax your “equity” in your home in order to be “fair” to all the “renters” staying in the basement who don’t/can’t own a home and cannot generate “tax sheltered” equity like a homeowner does.
Now let’s also say you renovate your kitchen and the government decides that should be taxed immediately on the improvement as it has added value to your home. They call this value “income” to be paid at your marginal tax rate because if you had invested this capital into non-sheltered financial instruments, tax would begin to accrue immediately. The CRA then decides a “reasonable” value of the upgrade adds to the home.
Finally, the government decides that only the highest earner in the household can be the principal owner of the home because it would be “income sprinkling” if the lower earner held the home to reduce the tax burden of the renovation.
Now you begin to protest because “houses don’t always go up” and you take on risk in buying with 90 % leverage with no guarantee of appreciation in value.
The finance minister then tells you “We take middle class fairness seriously. There’s lots of reasons to buy a home. Avoiding personal income tax shouldn’t be one.
Now tell me how you would react to that.
But hey, you’d be rich – you own a house, so suck it up and don’t complain.

#236 jess on 08.30.17 at 12:17 pm

12 Dave on 08.29.17 at 6:07 pm

ism’s

…a time to learn about libertarism? and while you are at it how about Sheldon Wolin and Inverted Totalitarianism

https://www.truthdig.com/articles/sheldon-wolin-and-inverted-totalitarianism/

https://www.youtube.com/watch?v=LGc8DMHMyi8

perhaps you would like to read about the Atlas Network
https://theintercept.com/2017/08/09/atlas-network-alejandro-chafuen-libertarian-think-tank-latin-america-brazil/

#237 Simon Bites on 08.30.17 at 12:19 pm

To the handlers of the self-proclaimed ‘fairness police’ financial authorities and the wannabe clown (to be a clown requires hard work) selfie boy:

Handlers,

We reviewed your initial offer (invitation for intimacy) masked as non-negotiable bully ultimatum/conviction and here is our answer:
F.CK Y.U!

We understand the desire to save on cheap actors, but let’s shows some qualities here, if you are short staffed of relatively decent actors, we can recommend some higher quality not-so-expensive, experienced professional bull-shit-ters, who at least know how to express convincingly intend to kiss before screwing someone.

Suggested other much-fairer targets for screwing (if horny and it urges/itches you to do so and in case of lack of budget to purchase relatively decent unisex doll – around 10 k on the market):
– Capital gains tax on principle residences.
– Implement finally the promised increase of taxes on stock options for your buddies on Bay Street.
– Tax all employee benefits at source, including vacation, drug and health plans, training, and pensions.

Also looking for heads-up on your intended timeline for the next (forceful and unjust) tax grabs including the imminent confiscation of retirement funds of the general public.

Orgasmic pleasure derived from screwing so many hard working Canadians should be a taxable benefit. Some politicians should pay around few billions yearly (conservatively estimated losses to the budget as of their ‘reforms’).

We intentionally choose not to address your puppets but you directly, is seems really bad selection of brainless puppets, income sprinkling is all they can come up with? Come on, give us a break! Show us some imagination, creativity, show us you deserve your money!

Do not throw out the baby with the water, Boyz!

Screwing if not consensual but forceful can hurt even the perpetrators.

Lubricate first Boyz!

Do not put your thingy in every hole, it could turn out to be the meat-grinder.

Yours non-trilled and non-consenting screw-up targets – doctors, dentists, lawyers, plumbers,….

#238 Mattl on 08.30.17 at 12:20 pm

#202 cool story bro. If your response to an increase in tax is to reduce labour your competitors will fill the void.

I don’t wish more tax on anyone but some of you have a strange understanding of how markets operate. Unless you are selling a product or service out of country, your gains are zero sum. They come at the expense of some other provider. Or, all providers are seeing a lift due to larger market conditions, like increased immigration, a hot housing market etc. The idea that you can just take your ball and to home, and employees will suffer is asinine.

So for you biz owners that are bringing that sweet international cash back into Canada, god bless you. These are the entrepreneurs that the gov should be worried about moving into a more tax friendly market. A realtor with a PREC and one assistant, I think the economy should be able to handle your withdrawl into low productivity.

#239 Ace Goodheart on 08.30.17 at 12:21 pm

Let me show you what I mean ’cause I think I’m confusing people:

Person has $10,000,000 as a family trust fund type situation, and has it invested. Earns income of 6% on this per year, which translates to $600,000 per year in income. This person does not work (why bother?). They volunteer in the Arts field, as they love Arts. They take a small salary from their volunteer work, and donate it, tax deductible.

If we look at our simple tax calculator and assuming 50% dividend income and 50% capital gains, this person pays tax at an aggregate rate of 26.95% and pays $161,691 in tax on their income each year, leaving them with after tax income of $438,309.

Take the same person, but this time she is an employee, earning the same $600,000 per year. This person pays tax at an aggregate rate of 47.83% and pays $286,989 per year in income tax, leaving them with an after tax income of $313,011.

What is the difference between the two people?

One works, the other does not.

#240 Jay on 08.30.17 at 12:22 pm

in my post # 234 I forgot to add:

the CRA then decides removing equity from via a HELOC becomes converting a private home’s regular income into capital gains.

#241 Oft dleted much misaligned stock.picker on 08.30.17 at 12:23 pm

I travel and work the world telling everyone I meet to avoid Canada like the plague. Inside Canada I continue to tell young people to get out as fast as they can before the develop any savings which can be stolen away in a CRA deemed disposition if you choose to leave mid career. Someone must be listening….companies are flooding out of Canada….companies are divesting assets wholesale just to get out….no new businesses are setting up.In Canada unless they receive guaranteed tax freedom and a low dollar…..they are subletting not leasing. The resource industry is dead…hiring no one…..In fact it’s been dead for years with zero.New projects for over a decade. Energy industry is still hemorrhaging jobs by the thousands. Engineering is dead…..Even if an infrastructure blitz was called tomorrow there aren’t any engineers to break ground…..they’re all gone. The Liberal economy is smoke up your rear end borrowing new debt….hiring is strictly make work for political blocs. This country is dying and anyone who thinks that “taxing the rich” is a viable strategy is going to pay the bills is nuts…..The professional class is leaving and you people are going to be raiding garbage dumps inside a decade.

#242 andrew on 08.30.17 at 12:23 pm

Technically ‘Fair’ should probably be the same tax rate for everyone. Or to be even more ‘Fair’ you would have a set amount, equal for each citizen.
Of course this system would be unethical & irresponsible, so lets remove the word ‘fair’, and replace it with ‘responsible’. Business owners, might feel better if governments asked for increased taxes in a manner of appreciation and acknowledgement of their contribution.

#243 fancy_pants on 08.30.17 at 12:32 pm

#221 45north on 08.30.17 at 11:15 am

I’m one of the IT folk you are talking about although I never went to shared services, I am still with ESDC.

What is hardest to swallow is the majority of training $ goes to language training managers who are for the most part useless anyways. And the conservative gov’t had a real push to outsource IT projects which seemed to always go sideways (Phoenix payroll, email amalgamation to canada.ca). Very frustrating place to work but I have 20 years vested so sticking it out.

#244 Dmitry on 08.30.17 at 12:38 pm

#233 Ace Goodheart

I understood you correctly, but the example with the numbers was not great one (especially if someone does not have any or full understanding how the taxes are paid by CCPC). It basically would tell these people that hey, look, paying dividends saves tons on taxes, which it really does not.

#245 Old Dog on 08.30.17 at 12:38 pm

I used to think Canadians were smart, I mean they all carry that thing called a smart phone with them everywhere they go. Maybe they should call it a dumbing down phone, there must be some reason for all the financial ignorance today.
OK, enough whining dogs. I have no skin in this game, neither employee nor employer. Let’s even the playing field for all the people whining about tax incentives for small businesses.

Step one: Small business owners will now be taxed just like employees.

Step two: If you are an employee with a company pension, sorry it’s gone. Save in your TFSA or RRSP.

EI, gone.

Sick leave if you have it, gone.

Maternity leave, gone.

No family days like some Gov. workers.

No severence pay.

No hourly wage, you’re now on a floating salary. You make good money some years and little other years. And if you need to work a longer day or on weekends, sorry, you’re available. No overtime of course.

If the company goes T’s up, you owe money.

I hope you enjoy the even playing field with fair taxes.

#246 fancy_pants on 08.30.17 at 12:40 pm

… actually Phoenix may have been instigated after the cons left. not sure.

The plus is I have witht he libs is more job security. People don’t realize the cons were downsizing the gov’t large. In 2011 IT had many competitions for limited position as there was a cull. I’m all for it as I can/did beat out the majority of the morons blindfolded.

but no, people instead voted to increase gov’t presence and spending b/c the guy has hair? downside for me is I do extra work b/c the chaff remains.

#247 Bloodcross on 08.30.17 at 12:44 pm

Poor ‘entrepreneurs’ who feel they are entitled to half a million a year because they took “risk” and have worked hard.
Here’s the thing: we are privileged. We do work we love, on our own terms. My employees do not have a pension plan. Actually, except for govt jobs, no one I know benefits from a pension plan. A few of my employees work as hard as I do, for a fraction of the money. I’m grateful to them for staying with me because if they did what I did, I would be shorthanded and they would become competition. Even the laziest of my employee makes a lot less money than I do per hour worked.

So yeah, entrepreneurs work hard, so do a lot of people. If being an employee was so great, you wouldn’t have quit your job to become an entrepreneur. You want to punish the govt for those taxes by going back to being an employee? Lol, go right ahead, see how that works for you.

We can only do what we do because society exists and social order is maintained. Order exists because of relative equality and a modicum of ‘fairness’. Inequality has been rising (statistically documented) over the past decades and the social fabric has been eroding… removal of spousal dividends is not going to ‘make you poor’, don’t worry… it is always hard for the privileged to lose part of it, let’s recognize it for what it is…

#248 Fake News Again on 08.30.17 at 1:00 pm

#198 Gonkman on 08.30.17 at 9:40 am
#162 Fake News Again on 08.29.17 at 11:46 pm

Wrong.

The Govt needs cash to pay for the 150,000 govt workers retiring every year with full gold plated pensions. Meanwhile the private sector continues to get screwed. Good luck with that….
___________________________________

No your Wrong…

Public Service Pension plan has almost 100 BILLION $ in it.. And there isn’t 150,000 Government employees retiring each year… LOL

Pension Plan is Privately Managaged.

http://www.investpsp.com/en/public-service-pen-plan-ff.html

Fast Facts
Fiscal year 2017 net return: 12.8%
Fiscal year 2017 comprehensive income: $11,012 million
Total net assets as at March 31, 2017: $98,447 million

Try again…

______________________________

Certainly

Govt Workers in Canada all three levels – 3.7 million
Total Workers in Canada – 16.6 million

22% of the population are govt workers (which is ridiculous in itself)

500K people retiring every year (according to Garth) so 100K Govt Workers retiring (I was a bit off).

From the CD Howe institute:

Correcting this distortion produces a fair-value estimate for Ottawa’s unfunded pension liability of
$269.3 billion at the end of 2014/15 – around $30,000 per family of four, and $117.9 billion higher
than the reported number. Because the unfunded pension liability is part of Ottawa’s debt, the fair-value
adjustment also raises the net public debt by $117.9 billion: from the $612.3 billion reported at the end
2014/15 to an adjusted $730.2 billion

This is ONLY Federal. Add in pig troughs from the provinces and the cities…that number balloons to over 500 billion in pension DEBT for which there is ZERO money.

The tax jacking upping….will continue.

#249 WUL on 08.30.17 at 1:15 pm

This snowy Dominion really has seen better days. I had a plumbing issue that I cured just now. I used my pipe wrench which has been in the family at least 60 years. Manufactured by A.B. Jardine & Co. Ltd. of Hespeler, Ontario.

We had a good thing going and squandered it.

#250 jess on 08.30.17 at 1:33 pm

Only fraudulent home lenders made liar’s loans
Liar’s loans were endemically fraudulent
Lenders and their agents put the lies in liar’s loans
Appraisal fraud was endemic and led by lenders and their agents
Liar’s loans could only be sold through fraudulent reps and warranties
CDOs “backed” by liar’s loans were inherently fraudulent
CDOs backed by liar’s loans could only be sold through fraudulent reps and warranties
Liar’s loans hyper-inflated the bubble
Liar’s loans became roughly one-third of mortgage originations by 2006 (William Black)
https://en.wikipedia.org/wiki/Control_fraud

#251 Smoking Mans Proctoligist on 08.30.17 at 1:37 pm

#83 Screwed Canadian Millenial on 08.29.17 at 8:18 pm

I haven’t even been around and your comment section is according to you, a bigger disaster than ever. You see Garth, even though you hate Screwed Canadian Millennials, I am the least of your worries.

Does Smoking (too much substance) Man have spell check? I am deeply concerned for his well being.
……………………………………………………………………
His Smart Phone was concealed in his rectum and has subsequently been removed. Now he can use his fingers and type clearly without having his head up his ass to type.

#252 Toronto_CA (formerly) on 08.30.17 at 1:39 pm

Interesting debate. Should you be compensated for risk taking? Yes. Should you be allowed to hold children and spouses up as employees for the sole purpose of lowering your tax burden? Absolutely f**king not. No problem with actual business owners having means to a reasonable tax rate and reaping the rewards for the efforts, but ways to abuse the system need to be abolished.

Or do what I did, move to the Cayman Islands and earn a massive tax-free salary. Life is good in the islands, mon.

#253 nick on 08.30.17 at 1:46 pm

I think all families should be taxed on family income. Full stop. Whether self-employed or not.

A family with one earner making 100k salaried is taxed heavier than two people earning 50k salaried. Doesnt make sense.

Also, if they close all of the income sprinkling holes, businesses should have an overall more favourable tax rate to provide incentive to create/manage/build/employ. Doesnt make sense to have someone start a business from scratch, take on risk, employ a bunch of people, and make 100k pay the same tax as someone who makes 100k on salary. Both are very important people, yes. But that salaried employee can generally be replaced by someone else of equal talent, whereas you cant really replace that person who created a business and hope for the same outcome.

#254 Ace Goodheart on 08.30.17 at 1:51 pm

RE: #232 Mike in Toronto on 08.30.17 at 11:49 am
#195 Ace Goodheart

“Look up the theory of tax integration as it applies to dividends. This is very basic stuff.

To spell it out: Dividends are paid from money which was already taxed as corporate income. Personal income is instead tax deductable.

The sum of the taxes are roughly the same.”

Very true. IF you own the company that is paying you the dividends. And if it is a private company, not publicly traded and only has a few shareholders.

If you do not own the company, and it is publicly traded, then what is in effect happening is the people who own shares in the company, are paying tax at a lesser rate than the company itself, and the people who work at the company.

This is the trick that is used by wealthy people the world over, to stay wealthy.

It is a two part trick:

Part #1: do not own, or have a controlling interest in, the means by which you earn your income.

Part #2: do not assume any liability in the means by which you earn your income.

You want tax separation and you want to eliminate liability risk.

What the special tax treatment for Canadian Controlled Private Corporations did, was to allow persons who work for a living, to enjoy the benefits enjoyed by persons who do not (ie the 1% wealthy lot who earn their incomes from dividends and capital gains).

What the new tax proposals are going to do, is take this away from them. Bill is exactly right, in that some working people have tax advantages that others do not.

He is however wrong in referring to this group as the 1%. They are not that. The 1% do not need to work, and they do not usually own or participate in the means by which they earn their income.

#255 Pritzl on 08.30.17 at 1:51 pm

@Ace Goodheart, so true. I don’t get the tax breaks given for “not working” either. Unfortunately, no politician can touch the 1%. At least not if they want to get campaign contributions and avoid negative advertising.

If implemented correctly, the new laws will eliminate loop holes that were being abused. e.g. when the “employees” of the small business are non-participating family members. I am confident that a justifiable salary/dividend to a contributing individual will still be possible.

I’m more worried about the minimum wage jumping up too far, too fast. It might be too much of a shock for they system. e.g. We have 2 kids under school age. Ideally, we would hire a nanny, and have in the past, but at the current costs one of us will likely take longer maternity/paternity leave until the younger one is of at least daycare age. So rather than improve the situation for minimum wage employees, it will, at least initially, inhibit their job opportunities. In time, the economy will adjust of course and benefit from them having more disposable income. I just question the speed of the raise. A more gradual approach would probably soften the impact on the job market.

#256 Mike on 08.30.17 at 2:00 pm

.
All business owners complaining about employees pensions(not many get those BTW, I have not), and EIs and vacations…..

Come to employee side of things, pay 45% of paycheck into tax+RRSPs+Insurances+Job risk.

Stop complaining. If your business doesnt work for you, leave it. Fact is, it works well – only after cheating on taxes, expenses, and fake paychecks.

Oh, my spouse gave up career, as if nobody’s else does? Doctors study 10+ years and wife is not working. Ah, I am doing my MBA and wife is not working as well. All bunch excuses to cheat on taxes.

Stan Brock – Me asking for tax fairness makes you think I am jealous. Maybe you are jealous of my RRSP and paid vacations, and oh my 45% paycheck which vanishes.

#257 Wrk.dover on 08.30.17 at 2:00 pm

#219 conan on 08.30.17 at 11:08 am
Wrk.dover on 08.30.17 at 10:00 am

“So along came Obama care which left all of the redundant parasitic jobs intact, at great wasted expense.”

Those are private industry jobs. Are you advocating replacing these people with Government workers? Do you really think that would save any money?

Obama was going for a hybrid private public plan. Problem is the initial downloading of immediate and future health claims has to be paid for by someone. Hint, its the premium payer.

The Republicans have no viable alternative to this plan. The only solution is time. As the plan needs to bounce back from the initial wave of claims.
———————————————

Conan: those jobs are non existent here.

Get sick, go to doctor or hospital, get cured, go home. no bill. No paper trail.

As I understand this situation, in USA more money is spent on administration of health insurance alone, per person, than Canada spends on administration and application of the actual health care, per person.

Get it? I am using healthcare parasite jobs as comparison to tax revenue collection calculating parasites.

So, my point is in comparison to our unencumbered health care, why is there even an accounting industry when electronic auto skim can do the same thing. The CRA can all be pensioned off for less than keeping it, and attrition will eventually wipe that redundant expense right off the book.

#258 n1tro on 08.30.17 at 2:06 pm

#234 Jay on 08.30.17 at 12:04 pm

Really good analogy comparing the tax grab if it were applied to houses. Unfortunately I don’t think the audience you are trying to enlighten will grasp it because they are the same people who come to the blog advocating for a “1 family, 1 house” rule given that they are priced out of their “right” to own a house in Canada.

#259 Leo Trollstoy on 08.30.17 at 2:32 pm

#222 Eks dee Sipal on 08.30.17 at 11:21 am
You lucked out on some US RE. Who cares. No one.

Aww u remembered. Apparently u care!

Be nice to your boss

ROFL

#260 Leo Trollstoy on 08.30.17 at 2:35 pm

All these conversations going over the heads of wage slaves

Stick with that RISKY job!

LOL

#261 aa6 on 08.30.17 at 2:36 pm

When income is received as dividends from a large corporation it is somewhat hard to see the actual taxes paid.

The large corporation pays taxes at a rate of 26% on its income. Then let us say that the corporation issues a dividend to the shareholders.

And our shareholder for the example has a marginal tax rate of 50%.

Since 50% – 26% = 24%, it works out that the shareholder will pay about 24% in personal taxes on the dividend.

In this way whether the net income in the corporation is paid out as a dividend, or paid out as salary to the shareholder, the income taxes paid are about the same.

#262 Tazi Bnu on 08.30.17 at 2:42 pm

Easy way to make the tax system more fair and add growth to the economy, abolish Canadian corp taxes and the dividend tax treatment. It would be revenue neutral in the long run too. However, I’m led to believe this option isn’t remotely being considered, which goes to show that the Morneau tax proposal has nothing to do with fairness and all to do with raising taxes.

No one has yet explained how this benefits the middle class or, anybody outside of the government, cause all I see are hindrances to all working Canadians. This raises money for what? More wasteful Government spending?

This will also cause a war between doctors and their provincial governments. These governments will come back to the feds with demands for more money to pay for healthcare, because the feds caused the problem in the first place. This major tax reform will not punish the doctors, or the rich. They will have means around it in the long run. Morneau and Trudeau already are structured to not be hit by this. Loopholes will still exist, but not for the incorporated middle class. They do the most hiring. There is no purpose to the Morneau tax proposal other than just to kick a hornets nest. It will accomplish nothing beneficial.

If “fairness” is the ultimate goal we should just skip the little steps and just go full communist. It’s unfair for someone to be paid more than someone else, because everyone contributes as much as they are able to society. From each according to their ability to each according to their needs, or some bullshit like it.

#263 roles on 08.30.17 at 2:49 pm

#188 Smoking Man on 08.30.17 at 8:40 am

This 45 min clip explains the argument we are having right now in the comments section.

https://youtu.be/FDkWYtUnQnA

—–

Awesome as usual.

So is this:

https://www.google.ca/search?q=American+inventors

#264 Tazi Bnu on 08.30.17 at 3:15 pm

Here’s some other policies that can be done in the interest of “fairness” or “a dollar is a dollar, is a dollar”:
• Abolish the principle residence exemption (unfair to those who can’t afford homes)
• Abolish all tax credits and deductions (unfair to those who don’t get them)
• Abolish the dairy quota system (unfair to farmers who don’t have one)
• Implement a Dairy bidding system so everyone gets a chance to produce
• Abolish all subsidies (unfair to those who don’t get them)
• Abolish TFSAs, RRSPs, and all tax exempt statuses of pensions (unfair to those who can’t save)
• All benefits from employers should be taxable (even if they buy you lunch it should be a part of your income)
• Ban stock options as a means of remuneration (unfair to those who don’t get them)
• Ban payment “in kind” for employment (employment must be paid with Canadian Dollars)
• Tax lottery earnings as earned income (unfair to those who didn’t win)
• Hopefully you see where this goes by now

Think of all the good that the Canadian government can do with the money from closing these significant loopholes //sarc

#265 Damifino on 08.30.17 at 3:28 pm

#234 Jay

Better than I could have said it. Thanks.

#266 AGuyInVancouver on 08.30.17 at 3:29 pm

#1 trexx on 08.29.17 at 5:45 pm
42.5% of all Canadians income now services taxes.
Go JT, go.
_ _ _
And the Danes pay 10% more and are happier. So what’s your point?

#267 WestCoaster on 08.30.17 at 3:49 pm

Get rid of income sprinkling, keep the rest.
Capital gains and deferred tax should be a benefit of owning a business. Getting to share income with people who add no value should not.

Sorry, but if you are paying your spouse for their “support” while you run your business, you are paying them to be your spouse! Get over yourself. I’m an employee, I am always bouncing ideas off my husband. Doesn’t mean I get to pay him for listening to my drivel.

As an aside, the lack of a pension should be a non-issue. As we’ve stated here before, at least 3/4’s of current employees do not have access to a corporate pension. We all have access to RRSP’s. If you run a good business, you should have a fairly strong grasp of budgeting, so contribute to your own RRSP. If the issue is your contribution room is crap because you pay yourself in dividends and menial wages and/or keep all the income in the business, it’s the same difference. You are saving money and deferring tax to a later date.

#268 waiting on the westcoast on 08.30.17 at 3:52 pm

#234 Jay

+1

That was a great way to exemplify the business owners predicament except now take away CMHC protecting that asset and you are on the hook for all loss of value and your have to constantly reno the kitchen, basement, etc to keep your home relevant and valuable to the market…

#269 ALFRED E. NEUMAN on 08.30.17 at 4:07 pm

Well said # 234. Excellent analogy.

I worry folks. The real reason for these tax-change considerations, is because THIS government needs the money to cover the costs of ‘delusional entitlement’ that is so rampant in our “please everyone” society.

Besides, JT and Minister Mordough, believe our money is theirs for the taking and that whatever they leave us with, is their gift back to us.

So it appears we got what we deserved when we elected a “self-made-son”, who’s never known “want”.

I was no fan of Mr. Harper’s style, but he understood balance-sheet realities, and he got the job done.

#270 Almost A Boomer on 08.30.17 at 4:18 pm

When there are no food banks in this country, I will agree that the minimum wage is too high. People who work should be paid enough so that they can be self sufficient. No food banks, rent not paid by tax payers, basement dwellers not subsidized by parents.
It is not okay to under pay people so others can get ahead. Or in the case of families like the Rogers, Thompsons, Westons etc. so they can amass more Billions.
If you have a small business and can not afford to pay a living wage do all of the work your self. If it is a valuable service someone will figure out how to run it profitably. No profit – no business you have a hobby.

#271 Mike on 08.30.17 at 4:18 pm

#175 Jane

Thanks for putting it straight!!!

No risk, No blah blah justify “income sprinkling”. It is immoral, illegal, and pathetic.

If your – individual prof corp – business(which it is not) doesn’t work without income sprinkling, shut it down or charge more to customers or lay off the employees(which actually you don’t have in first place). But no income sprinkling.

Thanks again #175 Jane.

#272 Keith in Calgary on 08.30.17 at 4:19 pm

#264 Tazi Bnu

I agree 100% with what you propose, subject to a flat tax rate for everybody being introduced.

Say………..15%……………..period. You make $10K or $1MM……………..you pay 15%.

#273 n1tro on 08.30.17 at 4:20 pm

#252 Toronto_CA (formerly) on 08.30.17 at 1:39 pm
Interesting debate. Should you be compensated for risk taking? Yes. Should you be allowed to hold children and spouses up as employees for the sole purpose of lowering your tax burden? Absolutely f**king not. No problem with actual business owners having means to a reasonable tax rate and reaping the rewards for the efforts, but ways to abuse the system need to be abolished.

Or do what I did, move to the Cayman Islands and earn a massive tax-free salary. Life is good in the islands, mon.
—————————
I take it you renounced your citizenship when you moved the to the Caymans? No? Then I assume you fully declared your world income as a good law abiding Canadian citizen and paid your fair share? No?

Hypocrisy is moving/making money in a tax haven “for the sole purpose of lowering your tax burden”.

#274 ALFRED E. NEUMAN on 08.30.17 at 4:21 pm

Reminds me,

I once had a serious discussion with a fellow who was angry adamant, that every Canadian should have an equal amount of money .. regardless of skill, education, career, work ethic, etc.

He was dead serious, saying: those that “have”, should be made to share their monies with those that don’t.

The logic of his thinking scared the dickens out of me.

But these few years later, I realize that his beliefs are becoming more prevalent and more popular in contemporary Canada, than my values I was raised on.

#275 Newcomer on 08.30.17 at 4:24 pm

Tax policies serve two purposes: gaining inland revenue and influencing economic behavior. This debate over how fair or unfair it is to tax business owners at different rates is beside the point. The tax code should incentivize small business activity but allowing people to shelter profits and divert income through pseudo-arms-length controlled shares may not be the best way to do it. It would make more sense to just lower dividend taxes or, better still, give business owners a straight-up deduction based on (for example) total number of employees. Of course, that’s not on the table, but it should be.

#276 Fake News Again on 08.30.17 at 4:26 pm

#266 AGuyInVancouver on 08.30.17 at 3:29 pm
#1 trexx on 08.29.17 at 5:45 pm
42.5% of all Canadians income now services taxes.
Go JT, go.
_ _ _
And the Danes pay 10% more and are happier. So what’s your point?

_______________________

BAD comparison

How long does it take to drive across Denmark? 20 minutes?

School FREE
Health care (TIMELY) FREE
Spanky New Roads
GOOD govt services…

Bascially the opposite of Canada.

#277 Blacksheep on 08.30.17 at 4:27 pm

I was trying to stay out of the ‘Great Tax Debate’, even though I am a small business owner, but some comments here are pretty misguided.

Sure some guys like Garth’s bad example may be making large coin running their business’s, but I and many small corp owners I know, do not.

So why bother with the hassle, instead of just punching a time clock?

Control of my time. Period. That and I can’t be fired.

I start at 9:00 am, work till 3:00 pm and thats a full day, If I have anything I want to do during the day, I do it. Period.

Can I f-up and lose a good customer? Of course, but I am diversified with multiple revenue streams (long term customers) so that’s not a problem (and I’m very careful).

The real problem comes when the economy goes for shite (GFC) and then it becomes a challenge to keep the doors open and to not loose key, long term employees.

So, what about the impact of a potential tax increases on us, battle worn business owners?

Do you really think I’m going take a cut in my income after 10 years plus, of busting my ass? Nope. Shop rate goes up X % and the semi-end user (manufactures) will pay. I don’t even need to make excuses to customers, cause they will doing the same thing.

And when my customers receives increased costs, from all the vendors like me that help them operate? You guessed it, all you whinny bloody employees that are pro tax increases on small business, will be eating our collective tax increases in the end cause YOU are the end user.

When someone here said, “Careful what you wish for,” they nailed it.

#278 crowdedelevatorfartz on 08.30.17 at 4:57 pm

@#184 & 185 Trumpocalypse2017

To all those Millennials out there that have never heard a vinyl record skipping…..please see 184 and
185..

Wassa matter Trumpy? Got the hiccups?

#279 Darren on 08.30.17 at 4:57 pm

I chose puppies.
Why? Because trying to talk logic and common sense to a government bureaucrat compares favourably to having a philosophical discussion with a cat about why it should not torture the mouse before the inevitable killing.

#280 MF on 08.30.17 at 5:07 pm

#241 Oft dleted much misaligned stock.pi

Hyperbole much?

Not a 100% perfect place, but show me somewhere that is.

Everyone else has bigger problems.

MF

#281 Brian on 08.30.17 at 5:08 pm

My wife had a small business doing books for all types of small businesses. The one thing that was consistent was all the small business owners were very greedy. They would pay their staff as little as possible and when someone would ask for more money the owner would answer that they lived on 2000.00 a month so why couldn’t the employee survive. What they failed to mention was the company paid for gas, car payments, insurance and other perks like meals out and such. Of course you can say you can live on 2000.00 a month when your bills are paid the the company. I for one agree these greedy businessman need to pay their share. She did books for home contractors, plumbers, and retailers. By far the most greedy were retailers, paid nothing to staff (mostly part timers) and lived high on the hog taking advantage of every tax loophole they could. Employees could hardly pay rent and the greedy owners worried about which winter vacation they would take or a new Mercedes Benz or Audi.

#282 waiting on the westcoast on 08.30.17 at 5:12 pm

A lot of people speaking about income sprinkling… I agree that it should not be used unless the family member is actively providing a service. Challenging to audit though…

On the retained earnings, dividends, etc., it is ridiculous to go after that as many entrepreneurs have pointed out, they use these tools to cover themselves during economically challenging times, retirement, etc as they are without many of the perks of typical employees in the areas.

I do have a huge issue with arguing that share ownership is somehow tied to management for dividends. If I own shares of RBC, I shouldn’t get a dividend because I did not work day to day at the company??? Of course not!

It is ridiculous to expect the small business owner to be involved in the day to day operations to receive dividends on his/her ownership, that is the role of paid employees (whether it’s the entrepreneur or a hired General Manager).

#283 Doomed on 08.30.17 at 5:16 pm

Between the hands of banks and the hands of every level of government deep into our pockets, who has anything left ?

FAR TOO MUCH GOVERNMENT EVERYWHERE YOU LOOK & NO WHERE NEAR ENOUGH BANK COMPETITION IN CANADA

#284 Oft deleted much maligned stock.picker on 08.31.17 at 3:31 am

Trudeau Liberals are squeezing your head so they can subsidize the foreign holidays of all the refugees that went back to their home countries for a vacation while collecting welfare in Canada. This has been headline news in three countries….except zero coverage on the CBC

Meanwhile,it’s sunny in Thailand, resorts are jumping…..The 15% income tax and zero sales tax (outside department stores where tourists ) makes it oh so pleasant. I laugh at the whining millennial voting Liberal for free stuff….and subsidies….cause new grads are unemployed unless ethnic and thereby in line for a government job……while those 22% vote Liberal to maintain the status quo the stupid millennial voting Liberal hoping to get in line are too stupid to realize the.line is color coded and no grad of old stick Canadian will ever be hired……a sad perpetuation of unions leeching and whiners weeping.

Canada is dead from the neck up…..debt slaves with no future….borrowing to live a lifestyle they can’t afford. Pathetic……The smart ones and companies have left’s……pool time losers.

#285 Phily on 08.31.17 at 3:37 am

Garth, very informative article, and everyone is entitled to post their opinion.

I have always been of the belief that risk takers or even talented professionals that have sacrificed in order to pursue their chosen profession should have certain the benefit of certain tax deductions.

Otherwise why would a person do it other than in order to move to a more tax friendly place.

This Government needs to go back to the drawing board and also undue some of the Harper years of mistakes that brought us here.

#286 paulo on 08.31.17 at 8:59 am

can GDP 4.5%! highest since 2002

.25 min increase in October could we see .50 quite possible.

#287 Braj on 08.31.17 at 1:38 pm

#14 Keith on 08.29.17 at 6:25 pm
James’s stories:

If what you say is true, and you spent $40,000 in HST on
“all the things we buy to live our lives.” Wow. Ontario HST is 13% so in a year that’s $307,000 and change in lifestyle expenditures. Not a bad life. Then there’s “always maxed out RRSPs.” For ten years. Those making five figures year as a family should be so lucky.

“I will likely end the year somewhere around 225k for personal tax.” “Just a lean paycheque eviscerated by the liberal tax machine.” No european holidays, wife drives a Hyundai.

Garth, I think James needs to revise his story, I can drive a truck through the inconsistencies here.

How about the fact that it includes business expenditures Mr. Genius?

#288 ThinkingOutLoud on 08.31.17 at 3:13 pm

So…..I am a business owner. If I buy physical gold (I mean real, physical gold), then I have spent the money I had in my company. Physical gold doesnt pay a dividend, so no passive income. And when it comes time to retire, I can just sell it, one chunk at a time, once per year when I need my retirement payout. Problem solved!!

#289 Sharky on 08.31.17 at 3:24 pm

Honestly, I feel this ‘movement’ as a whole is taking the wrong approach. Groups are trying to “talk it out”, “negotiate”, and “open a dialogue”.

Let me ask you: is THAT how the left has ever handled things? When has that EVER worked?

No. They just do shit. And when you object, they say you’re a tax cheat, that you don’t pay your fair share. Or they call you racist or a bigot and launch social justice warriors on you.

Then you get dragged into the weeds defending your ideas and yourselves, while they march ahead with what they will do anyways because you’re now a non-factor.

In short, you are spending your time THINKING and DISCUSSING and TRYING TO BE ACCEPTED by all. They are spending their time DOING and ACCOMPLISHING. Guess who wins THAT battle?

No – I feel the best strategy here is OFFENSE.

For example – large professional organizations, everyone from Accountants to Dentists and Electricians should be churning out ‘white papers’ that argue business pricing strategy -and profit margins- should be predicated on net, after-tax earnings.

THEN, make a case -and a recommendation to ALL their members- that their rates be immediately increased by 40% to offset the additional “tax” costs that are coming. Groups in Ontario can add some salt and recommend a 50% increase to cover supply-level cost increases from the upcoming minimum wage increase.

Then, you PUBLISH THE SHIT OUT OF THAT. Get it in front of EVERY Canadian’s face. Get them thinking “holy crap this is going to cost ME a lot of money”. That will get John-Q-public involved.

Organizations which don’t have the ability to immediately increase rates -think government paid doctors- should conduct carefully-worded surveys of their membership. Surveys which paint a SCARY picture with a high number of Doctors saying they are considering leaving Canada if these changes come through. Then PROMOTE THE SHIT OUT OF THAT SURVEY.

Play up the fact it will destroy the Canadian health care system – as it no doubt would.

This wouldn’t be the first time a group of Professionals has threatened to leave and done it. It happened during past OHIP fee decreases.

And I’m sure Garth will remember the fallout from CRA winning the long-winded Mainstream Film case. HUNDREDS of Businessmen, Doctors, Lawyers and other Professionals left the Country after receiving those tax bills after a tax ruling they felt was unjust.

They took their services, the money they contributed to their local economies, the taxes they paid – and just LEFT.

Oh -even better- they also left behind a great “fuck-you” gift for the Government of Canada: some staggeringly high unpaid tax balances.

You see – faced with what they felt was an unfair decision, many ran up their own tax bills -in addition to the disputed Mainstream amounts- when they planned their exits.

One Ontario CRA office alone had to write-off over $21 million of un-collectible taxes JUST from the people who left the country and took their assets with them after the Mainstream tax ruling.

#290 anne on 08.31.17 at 5:52 pm

I chose puppies!