Trudeau proposes increasing income tax rate to 93%

[Urbane]

It looks like the news won't be good for the middle class if the tax changes go through. The government needs to re-think their plans or face an uphill battle getting re-elected. From Castanet:

More than 80 per cent of middle-income families face higher income taxes under the federal Liberals' tax plan, according to a new study.

The Fraser Institute says, contrary to rhetoric from Ottawa, middle-class families will pay an average $840 more in federal income taxes this year.
Full article: https://www.castanet.net/edition/news-s ... htm#207534

[Veovis]

It’s interesting that of all the doctors I work with on a daily basis, not once has any of this come up in conversation.

I feel the people raising the biggest fuss are just anti-liberal people who won’t be personally affected, but raise a stink at anything the current government does.

As we see with the poll numbers too in the thread about how support for the current government remains high, even with the proposed changes

I know many people that deal with doctors on a daily basis as well. Most state they want far more, not less $$, so what happens to the contract demands when the gov takes more? You think they eat that cost? silly.

They also don't just walk around telling people their personal finances either. I know lawyers, developers, contractors, teachers, consultants, framers, plumbers, mechanics, IT guys, and more, and I see them most days, and guess what, ya it's not a contact of yelling about personal financial planning.........but I'm sure it's different for your claims being the internet and all.

[Sparki55]

It’s interesting that of all the doctors I work with on a daily basis, not once has any of this come up in conversation.

I feel the people raising the biggest fuss are just anti-liberal people who won’t be personally affected, but raise a stink at anything the current government does.

As we see with the poll numbers too in the thread about how support for the current government remains high, even with the proposed changes

I'm personally affected; I do not have a family doctor and it isn't from a lack of trying. I'm worried this will push more of them away.

If you would like to keep discussing how Canada is awesome and it's only anti liberal supporters who belive we need to do more to attract doctors, please read the article below:
https://www.castanet.net/news/Canada/20 ... or-doctors

[Omnitheo]

I mention the fuss coming from anti-liberal people and you reference the Fraser Institute...

On the other side, here is a letter from Michael Rachlis MD, Interim Coordinator, Doctors for Fair Taxation

During the past month many doctors have mobilized to oppose the tax changes proposed by the federal government for individuals who are incorporated. We say that the government should move ahead with these plans and go much further in pursuing Canadian economic equity. We recommend that our physician colleagues should resolve their financial issues through negotiations with their ministries of health.

Canada’s poverty rate is 20th out of 31 OECD countries. The Canadian poverty rate went up slightly from 2005 to 2015 to 14.2 per cent, representing 4.8 million people. The child poverty rate was up marginally to 17.1 per cent. Ominously senior’s poverty rates, which had fallen dramatically for two decades, increased from 12 per cent to 14.5 per cent.

We know that less equal societies are less healthy. Even the well-to-do in less equal societies have worse health than the wealthy in more equal societies. Lower income Canadians have higher rates of most health problems and it’s not because they get sick and then get poor. We could save 20 per cent of our health budget if all Canadians were as healthy as the one fifth in the highest income brackets.

The federal government campaigned on a platform of tax fairness. The government implemented a new tax bracket for very high income Canadians and increased the Canadian Child Tax Benefit. This was a good start.

Finance Minister Bill Morneau’s proposed reforms, outlined in a July discussion paper, focus on individuals who are incorporated. These include more than 60 per cent of physicians. These measures are estimated to increase tax revenues by $250 million. Notably, the federal government opted not to make changes in the taxation of stock options or capital gains, which would have enhanced revenues by almost $1 billion and $10 billion respectively. These instruments significantly exacerbate economic inequality.

There are three main changes proposed for the taxation of Canadian Controlled Private Corporations (CCPCs). An owner will still be permitted to employ a relative but there will be tighter requirements for proof that they actually do work before salaries can be “sprinkled” upon them. It will no longer be possible to convert capital gains into dividends that would be taxed at lower rates. And, the government has opened discussion on the way in which investment income within the corporation is taxed.

These are eminently fair initiatives. In fact, University of Ottawa professor Michael Wolfson’s research reveals the current situation is increasing economic inequality. Canadians in the bottom 90 per cent are very unlikely to own a CCPC but 80 per cent of those in the top 0.1 per cent are CCPC owners and most have two or more. CCPC income is essentially nil for the bottom 90 per cent but adds an average of $100,000 to the assets of the top 1 per cent and $3 million to the assets of the top 0.01 per cent.

Some of our medical colleagues feel angry and betrayed. They assert that provincial governments negotiated lower fees with provincial medical associations in return for allowing physicians to incorporate. They also allege that continued lower taxes for doctors are payback for the lack of pensions, parental benefits, child care, and other benefits,

We would say that such concerns cannot justify an inherently unfair situation in our tax code, and especially one that worsens income inequality with adverse consequences for Canadians’ health. We would urge provincial medical associations to take these issues up at negotiations with their respective provincial governments. Roughly two-thirds of income taxes are paid to the federal government and the provinces blatantly used previous deals to off-load their responsibilities onto the federal government.

And we urge all physicians to support universal child care, pensions, and maternity benefits. To quote CCF founding leader J.S. Woodsworth, “What we desire for ourselves, we wish for all. To this end, may we take our share in the world’s work and the world’s struggles.”

Finally, the federal government should institute new policies for stock option taxation and capital gains as part of its ongoing review of the tax code. We agree with the 1966 Royal Commission on Taxation that, “The first and most essential purpose of taxation is to share the burden of the state fairly among all individuals and families.”

Please tax us. Canada is worth it.

Michael Rachlis

https://doctorsforfairtaxation.ca/

[Rwede]

It looks like the news won't be good for the middle class if the tax changes go through. The government needs to re-think their plans or face an uphill battle getting re-elected. From Castanet:

More than 80 per cent of middle-income families face higher income taxes under the federal Liberals' tax plan, according to a new study.

The Fraser Institute says, contrary to rhetoric from Ottawa, middle-class families will pay an average $840 more in federal income taxes this year.
Full article: https://www.castanet.net/edition/news-s ... htm#207534

Crickets from Trudeau's fanbois on this.

It's far easier to vilify those filthy rich doctors.

Fact is, Trudeau is draining the personal finances of the majority of Canadians at an alarming rate. The only ones he's not after are himself and Morneau, the Trust Fund Babies whose devious tax avoidance schemes are immune to their new tax burdens.

Only a complete imbecile would support Trudeau's violent attack on everyone's finances, except Trudeau's group of trust fund pals.

[Muzza]

Michael Rachlis MD is not a practicing doctor, so his opinion does not carry much weight in my view. He will likely not be affected by these tax changes.

[Boda]

[Fact is, Trudeau is draining the personal finances of the majority of Canadians at an alarming rate. The only ones he's not after are himself and Morneau, the Trust Fund Babies whose devious tax avoidance schemes are immune to their new tax burdens.

But you've posted that there is no such thin as tax loopholes.
So what are these devious tax avoidance schemes that have recently come to your attention Rwede?

[kgcayenne]

Why have I not been able to find a single calculator to plug some data into that will yield before vs after tax values?

[Rwede]

[Fact is, Trudeau is draining the personal finances of the majority of Canadians at an alarming rate. The only ones he's not after are himself and Morneau, the Trust Fund Babies whose devious tax avoidance schemes are immune to their new tax burdens.

But you've posted that there is no such thin as tax loopholes.
So what are these devious tax avoidance schemes that have recently come to your attention Rwede?

There's a difference between tax loopholes, which don't exist, and the deliberate targeting by Trudeau of all forms of income streams except his own.

Trudeau is exempting himself from taxation.

Trudeau is applying a dramatic increase in taxation on everyone else.

If people want to call Trudeau's self exemption a "loophole" then they can fill their boots. Those ignorant of the taxation laws of this country can stick to a few misused buzzwords if it helps them understand what's happening.

Let's keep it simple - you will pay a lot more, Trudeau pays no more, even though it's likely he makes many multiples more from his ill-gotten family trust than you will ever make. Is that easier to understand?

[Gone_Fishin]

John Ivison: Accusations Morneau breached conflict-of-interest screen raise tension over tax reforms


John Ivison
September 28, 2017

snip

Not only is the Prime Minister’s “family fortune” the focus of opposition attacks over the government’s proposed tax reforms, but the finance minister’s wealth is also being contrasted with the struggles faced by mom-and-pop business-owners and farmers, who fear they will be side-swiped by the proposed changes to private corporations.

It’s all slightly unseemly, coming from a party that claims it is the Trudeau Liberals who are vilifying the rich and engaging in class warfare.

But it’s working.

A new poll from the Angus Reid Institute found the number of voters who believe it is “time for change” has risen to 45 per cent, against 34 per cent who don’t agree. The same poll had Conservative leader Andrew Scheer as the federal-party leader best suited to deal with economic policy.

A new front opened Thursday when the Conservatives raised the issue of conflict of interest.

When he became finance minister, Bill Morneau set up a conflict-of-interest screen with ethics commissioner Mary Dawson “to assist with my obligation to abstain from any participation in any matters of decisions, other than those of a general application, relating to Morneau Shepell Inc.,” where until his election in October 2015 he had been executive chair.

During question period, Conservative after Conservative pointed out that earlier in the day at a meeting of the finance committee, expert testimony had indicated that Morneau Shepell would be one of the main beneficiaries of the move to increase taxes on passive investment in private corporations.

“The minister said he would recuse himself. Why did he not recuse himself when the proposals so clearly affect his family company?” asked Candice Bergen, the Conservative House leader.

Morneau has previously refused to talk about his own finances. He responded to Bergen by saying that taxes affect all Canadians and all business — apparently a reference to the “general application” provision in the conflict-of-interest screen.

The minister said he would recuse himself. Why did he not recuse himself when the proposals so clearly affect his family company?

He did tell the Globe and Mail that he found it “absolutely absurd” to suggest that the changes would benefit Morneau Shepell because its sale of individual pension plans represented “less than 1 per cent of revenues” when he was the boss.

But it’s likely to be a lot more than 1 per cent once these proposals pass through the House.

Cathren Ronberg, communications director at Morneau Shepell, said that since his resignation the finance minister has had no involvement with the company and his shares have been held in a blind trust. Asked how much of the public-owned company is owned by Morneau and his family, Ronberg said the company has no knowledge of whether the blind trust continues to own shares.

I don’t buy conspiracy theories — “the exhaust fumes of democracy,” in the words of Christopher Hitchens.

The finance department was trying to flog the proposals to tax private corporations long before Morneau entered politics. But it does look too cozy, and provides buckshot for the drive-by smear-merchants in the opposition ranks.

The finance committee meeting, where Morneau was star witness, offered fresh indications of the how much trouble the government is in. Whereas to this point the reforms have been about “fairness,” apparently they are now also intended to “encourage investment” by incentivizing the active use of capital by taxing its passive use more heavily.

snip

But there will be no comfort for Morneau or his leader until the revised proposals emerge and make clear that they only apply to the wealthiest Canadians.

Pierre Poilievre, the Conservative finance critic, was born to the role of political agent-provocateur and has been effective in inciting opinion against the government.

“Can you at all understand why owners of corner stores or family farms are offended that you would impose higher taxes on their businesses but multi-million companies don’t pay a penny?” he asked Morneau.

The response — “I’m happy to talk about the approach taken to tax fairness,” etc. etc. — indicated the finance minister has a tin ear when it comes to the guiding principle of politics, taking the fear out of common life.

The explanation may be simple: neither he nor his leader are really like you.

http://nationalpost.com/news/politics/j ... ax-reforms

[Rwede]

Lilley: This is a poster from a Saskatchewan hospital, posted in the doctor's lounge. Interesting that Bill Morneau's company is looking to profit from the tax changes being brought in by their old boss and owner.

[hobbyguy]

FYI - that level is far too low. It places us at the bottom end of OECD statistics...

[hobbyguy]

Waaay back in this thread I posted some comments about the actual policy, and haven't seen a lot of factual discussion about those policy considerations.

So I will put this forward:

Our family business from several decades ago (about 45-50 employees) operated on the basis of paying the owner and family members salary and wages, and did not use tax planners and/or fancy accountants (except on the occasion of its sale). When you have a productive and growing business, you can do that. The capital gains allowances are enough. Reinvest in the company with retained earnings, and the value of the company grows. That is the "retirement fund" and at a very reasonable tax rate (especially with tax savings afforded by deprecation allowances). The salary paid to the owner reduces the company income and the total tax rate is thus quite manageable. The owner also has the other normal vehicles available to everyone for further diversified retirement planning.

What I see in a lot of the complaints is "tax planners" protecting their turf, and stirring up trouble. Individuals who set up corporations to redefine their income as "business income" when in fact under any reasonable analysis it is personal income.

If we take that "noise" out, then the policies appear very reasonable with one possible exception, that being physicians and their investments in their practices. I do have trouble, however, with seeing a passive investments in, say Encana stocks, as being part of that practice as a business. But I also recognize that in order to retain and attract physicians against the backdrop of the US "wild west" medical industry it may be necessary to find an accommodation for physicians that is outside of the loopholes that others are unfairly exploiting. That could be as simple as tax deduction for active medical practice.

So when I look at the context, the actual negative is really only in regard to medical practice, and that is readily solved with a different mechanism.

Then the rest of the policy actually looks fairly reasonable. And I don't give a rats if "tax planners" and accounting firms lose a bit of business because the tax codes are clearer and more equitable.

[blueliner]

As Justin rules the country on Do as I say not Do as I do
Prime Minister Justin Trudeau, who backtracked on electoral reform and parliamentary transparency, has finally got his back up over shutting down loopholes on small business owners.

Despite the fury local MPs have received this summer, and harsh words from business owners decrying being labelled as “cheats,” the Liberals are steadfast in refusing to alter their plans.

Those “tax cheats” who employ their relatives to clean their offices? Shame, shame, shame.

A bit of advice to these business owners? The only ones who have the ear of the Liberal government are billionaires. Stop trying to be heard.

Trudeau rides off to vacation on the private Caribbean island of his personal friend, the Aga Khan, and Canadians are told to lighten up, and not make something out of nothing.

Forget that Canada has given a $30-million endowment fund for the Aga Khan’s Global Centre for Pluralism, and currently gives preferred treatment and large grants to his networks — $216 million, thus far, and counting.

A quarter of billion dollars, however, doesn’t seem to qualify as a conflict of interest in Trudeau’s select circle.

Recently, Jack Ma, the gazillionaire CEO of Alibaba, and Justin Trudeau himself, suggested during a big meet in Toronto that Canadian small businesses sell their wares to China.

This is strange advice from the PM.

China, after all, is known for undercutting any competing product, data grabbing, and using reverse engineering as a common practice — much to the chagrin and ire of western companies.

BlackBerry, for example, was reversed engineered and became the infamous RedBerry in China, despite protests by Canadian business and diplomats.

So, be careful what your PM wishes for you.

In 2017, Trudeau approved the sale of a highly-lucrative B.C. retirement home chain to Anbang, a Chinese corporation that had been on a North American spending spree, including buying New York’s landmark Waldorf Astoria Hotel in 2014 for $1.95 billion.

Owned by one of China’s communist first families, Anbang is an example of the murky world of China’s authoritarian communism in action.

The sale guaranteed a good investment for Anbang, as retirement homes are really no more than high-priced hotels that are heavily subsidized by governments to make them affordable.

But, lord love a Peking duck.

Wu Xiaohui, who headed Anbang, was detained in Beijing in the middle of the purchase by China’s own anti-corruption police, yet the deal still went through.

Wu has a distinguished communist pedigree, for sure. His wife, after all, is the granddaughter of Deng Xiaoping, the Chinese dictator who had the job of turning China around in the post-Mao era.

But this did not stop Chinese anti-corruption cops from scooping him up, which more than suggests Wu is one bad actor if he is too corrupt even for corrupt communists.

Famously, SNC-Lavalin and Siemens, among others, have corrupted western governments, but, of course, Canada is wiser.

In late 2016, Trudeau met several influential Chinese billionaires over dinner that was widely criticized as “cash for access.”

Among gifts received, Trudeau famously took $200,000 for his late father’s foundation and, in true communist fashion, another $50,000 for a statue of dear old comrade dad.

Obviously, it was just coincidence that foreign investment was discussed at the fundraiser, and that the Anbang deal went ahead shortly afterwards, even with its CEO in Chinese detention.

Taxing Canadian small businesses therefore makes perfect sense to Trudeau.

After all, if Canadian small business can’t afford to be in his company, then why should he concern himself?

Matters of substance are for discussion only behind closed doors, and with only the truly wealthy.

[email protected]

[kgcayenne]

Not ONE online calculator ha shown up from either side of the issue. Why is that?