Castanet

A 93% tax rate? Private corporation tax could make it possible

Tax lawyer says Ottawa does not realize the extent of damage its proposed changes will cause to Canadian businesses, their employees and the economy


Jamie Golombek
August 4, 2017





Small business owners across the land are still reeling from last month’s announcement by Finance Minister Bill Morneau targeting private corporations and fundamentally changing the way businesses and incorporated professionals are taxed. The tax strategies being challenged can be categorized into three main areas: income sprinkling, earning passive investment income in a corporation, and converting a corporation’s ordinary income into tax-preferred capital gains.

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But this change, in conjunction with the other two changes, could result in a tax rate as high as 93 per cent, as pointed out by tax lawyer Michael Goldberg of Minden Gross LLP in Toronto, in a report sent out this week to clients. As Mr. Goldberg writes, “The mere proposal of these changes has already thrown the Canadian private business owner tax system into turmoil, and, unfortunately, the Government and the Department of Finance do not seem to appreciate and possibly do not understand the extent of the damage that the (plan) will cause to Canadian business owners, employees of their businesses, and the economy as a whole.”

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Currently, across nearly all provinces for 2017, we have near-perfect integration on small business income, such that there is no tax rate advantage from incorporation for businesses earning under $500,000 of active business income annually and actually a tax rate disadvantage of having active business income taxed inside the corporation for income above this threshold. There is a similar tax rate disadvantage associated with earning investment income, including capital gains, in a corporation as opposed to earning that same investment income personally.

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Indeed, Mr. Goldberg feels the rules “are so complex and the potential harm is so great” that, rather than try to fix them through the consultation process (which continues through Oct. 2), he is calling on the government to abandon the proposals in their entirety and “restart the process of finding an effective way to meet its legitimate policy objectives.”


http://business.financialpost.com/perso ... 51db552eab

Disgusting!!!

Incredible!!!

sounds good get er done jt

Canadian Doctors Like Me Are Starting To Look For The Exit

Canada, and especially Ontario, has become an increasingly unattractive place to practice as a doctor.

08/16/2017 11:00 EDT | Updated 1 hour ago
Adam Stewart MD, CCFP


What if you or your loved one desperately needed to see a doctor, but there were none left; or, just as hopeless, the wait list was well over a year long? What if there are not enough doctors to work at all the emergency departments across the country?

I do not expect people to feel sorry for the financial matters of doctors. From the public's perspective, all doctors are relatively rich. As one prominent health journalist once unsympathetically wrote, perhaps doctors "should put a little water in their fine wine."

I do not expect that the public realize and appreciate that doctors have gone through 10 to 15 years of advanced education and training after high school; that most graduate in their 30s and it is not until then that they can start to pay down their hundreds of thousands of dollars of accumulated debt; that they have no benefits, no paid vacations, no sick leave, no maternity leave; that they have no pensions and have to personally fund their retirements; that doctors operate as small businesses and contribute to the economy by hiring employees, paying taxes, paying rent and paying overhead costs; and that, perhaps most importantly, doctors make immeasurable self-sacrifices for the sake of their patients.

For over three years, Ontario's doctors have been hit with multiple unilaterally imposed cuts to funding, not to mention being repeatedly villainized by the provincial government. More recently, the federal government has proposed tax changes to corporations that will dramatically impact Canada's doctors. Some estimates propose doctors will be subject to an effective tax rate as high as 73 per cent, or even 93 per cent.

This blog is not about that. There are already countless articles on these matters. Just search the hashtags like #TaxFairness, #CareNotCuts, #PatientsFirst, and #ONhealth on social media to read more.

Instead, this blog is meant to raise awareness about why every single person in Canada, and especially in Ontario, should take notice and care about their own health-care interests.

The simple fact is that Canada, and especially Ontario, has become an increasingly unattractive place to practice as a doctor. The health-care system is strained and underfunded. Physicians are burnt out. They are feeling villainized and underappreciated here. The financial climate and discouragements by both the provincial, and now the federal, governments are evidently incessant.

I have been a family physician in Ontario for over eight years. I love my life here. My young family and I have deep roots in Ontario. I am fortunate to practice in a supportive rural community. I could not wish for better colleagues and staff.

However, something has to give.

For the first time ever, I have frankly started looking at opportunities to move and practice in a different country. Last night, I researched opportunities in New Zealand and Australia, and other countries where my Canadian qualifications are readily transferable. I also signed up for emails on international job postings.

My wife and I had honest discussions about other countries to which we would be interested in moving. The simple facts are: pretty much every other country in the world is also in desperate need of doctors; most developed countries have better-functioning health-care systems; and many countries have much more hospitable financial and tax incentives, along with exemplary work-life balance.

Now, for full disclosure, surely uprooting my family and moving to another country would be an enormous change — so big, in fact, that there is truthfully only a 10 to 20 per cent likelihood that I will ultimately go through with it. However, this is coming from a deeply rooted physician who would have previously given this less than a zero per cent chance.

If a physician like me has been pushed from zero to 20 per cent, it follows that many other doctors have been pushed past their tipping points as well. This is not to mention all of the new graduates every year who are free to choose to practice in whatever province and country they wish.

If government policies continue on their current courses, the situation will become even more dire.

History seems doomed to repeat itself, only worse this time. Ontario's doctor shortages are the result of misguided government actions in the 1990s when then-premier Bob Rae turned Ontario into an overly unappealing place for doctors. If government policies continue on their current courses, the situation will become even more dire as the health-care system comes under the increased strains of an aging Baby Boomer generation and a progressively complex overall population, compounded by vast underfunding — and, soon to come, far less doctors.


SNIPPPPPPPPPPPPPPPPPPPED

http://www.huffingtonpost.ca/adam-stewa ... _23077616/

Gone_Fishin wrote:A 93% tax rate? Private corporation tax could make it possible

Tax lawyer says Ottawa does not realize the extent of damage its proposed changes will cause to Canadian businesses, their employees and the economy

I gave up on the Ontario Liberal government long ago and am glad that I don't live there and it's becoming increasingly obvious that the federal Liberal government is moving toward taxation policies that have failed in the past. The last thing Canadians need is for an exodus of doctors from this country so the government shouldn't be throwing more financial roadblocks in their way.

Wait, doctors are incorporated? Fiscally several thousand dollars to file taxes. On the other hand, it puts liability onto the corporation and not the doctor. Isn't there legislation for that, liability and insurance?

This is what happens when you put folks who do not understand economics or fiscal responsibility in power.

Rwede wrote:I do not expect that the public realize and appreciate that doctors have gone through 10 to 15 years of advanced education and training after high school; that most graduate in their 30s and it is not until then that they can start to pay down their hundreds of thousands of dollars of accumulated debt; that they have no benefits, no paid vacations, no sick leave, no maternity leave; that they have no pensions and have to personally fund their retirements; that doctors operate as small businesses and contribute to the economy by hiring employees, paying taxes, paying rent and paying overhead costs; and that, perhaps most importantly, doctors make immeasurable self-sacrifices for the sake of their patients.

I like most of your post but you're out to lunch on the benefits and pensions.
"Today less than 40% of employed Canadians have a pension plan at work. You are more likely to have one if you work for the public sector than if you are with a private company."
https://www.monster.ca/career-advice/article/pensions-retirement-benefits-rrsps

Doctors to population are increasing:
http://globalnews.ca/news/2898641/how-much-is-your-doctor-making-what-you-need-to-know-about-canadas-physician-workforce/
"There were 82,198 doctors in Canada in 2015. There are now 228 doctors per 100,000 people – that’s more physicians per person than ever before."

If Canada would get more and more foreign doctors into our system, by whatever means possible, that means testing for training or getting them retrained, or even finding out their training is better, by any means it takes, we'd have more doctors.

How many "does any one know if a doctor is taking new patients" threads do we have here on castanet alone? I counted 14 on day.

Canada has pretty close to enough have folks that go in for medical training on all levels from

specialists, to Drs to Nurses to lab tech, etc.right here at home.

Sadly, after being educated and trained here way too many of them end up leaving for other locals where they get

higher pay and benefits.

There's little incentive for people to do well in Canada now.

Why would a small business chase extra work and hire more people when the crazy left combo of Trudeau and Horgan have their grubby mitts on 93% of any return available?

It's simply not worth the risk to gamble with an investment in growth when the most one can expect to reap is down to 7% of profits. Safe dividend funds will put that same money to work for a guaranteed 5 - 6% without the hassle, and unfortunately, without the jobs that come with the hassle.

Wait wait, a lawyer suggests something and it's being presented as fact.

Fake news.
You know, like you guys are always purporting when it doesn't suit your anti Trudeau agenda. Lol