“These tax changes hurt me more than they hurt you – oh no wait, I’m rich enough that they barely impact me at all (except they will help my company, Morneau Shepell, sell more individual pension plans)”
Our federal Liberal government has been riding a public relations disaster since July 2017. It didn’t help that it coincided with proven ethical violations by the Prime Minister and Finance Minister.
The Feds came out with forceful proposals that generally attacked private companies with wide-sweeping new tax rules backed by the notion that private companies were gaining an unfair advantage over the rest of the Canadian population.
What was the chief complaint from the business community? This Liberal notion ignored the disadvantaged position most businesses start from (debt, initial losses, and extreme risk). They took away much of the incentive to be inventive. They also disregarded the fact that many employees, especially those in government positions, have an extremely tax advantaged pension plan that is not available to private business owners.
After a relentless backlash from almost every business sector, the Feds realized that their ham-fisted efforts at tax reform would not work. They have since come back with many changes to and cancellations of the original proposals. The result has been a very unstable landscape for tax planning.
This has been a lesson in how-not-to-implement tax changes and a lesson of how-to-lose the trust of the business community for the next 40 years. Trudeau should probably stick to pontificating on social issues and buying fashionable socks. Morneau should probably retire to his secretive French villa and collect a parliamentary pension for the rest of his life – paid for of course from taxes levied on the business community.
Rather than follow the general desire Canadians have for simplification, the Liberals have gone the other direction by adding a lot of new tax complexity for business owners. Compliance costs for business owners will probably increase by more than the new tax revenue (my opinion). I think the government that replaces Trudeau’s Liberals will reverse most of the new rules and replace them with something that actually makes sense. And on that note…
Political donations get a tax credit of 75% of the first $400 per year, 50% on the next $350, and 33.33% on contributions over $750 (maximum $1,275). So consider making a donation to a viable political party that has a mind for tax policy. A $400 donation will only cost you $100 of after-tax money!