Trudeau Ups Taxes, Scheerly He Shouldn’t!
Anderew Scheer, Leader of the Conservatives and Official Opposition Leader, is taking a stand against Trudeau’s Tax Plan to tax small business owners who are “not paying their fair share of taxes”. This one hits home for us here at Fancy Dough, because unlike Trudeau, we’ve had to work very hard to make ends meet, while the silver spoon is still permanently affixed to his lips.
Despite this being a personal topic for us and the majority of small businesses across Canada, we wanted to weigh in on some of these proposed changes and review some of the ways Trudeau is being “open and transparent” about his proposed changes and justification for such egregious measures.
We’ll open this week’s post with a video of Andrew Scheer asking Trudeau and the Liberal Government to explain how these tax measures are benefiting the middle class. You’ll notice a theme to Mr. Trudeaus answers, but before we spill the coffers on this vid, check out this question period…
The theme of the question period is avoidance. Trudeau dodges Scheer’s questions and fails to address any of the issues appropriately. Canadians expect their Prime Minister to answer questions in Question Period posed by the opposition, as a fundamental characteristic of a strong democracy. These values were the values Trudeau was elected on and we expect him to fully explain his policies so that Canadians across Canada can understand exactly what’s at stake.
Check out more details on this and more by checking out this CTV Article here.
The Liberal Tax Plan
What does the Liberal tax plan change?
Income Sprinkling –
It makes it more difficult to “split” income to family members in the form of salary, wages, or dividends to reduce the overall taxes paid by the whole family unit. The proposal seeks to put restrictions on family members between the ages of 18 and 24.
Changes to taxation on passive business income –
Restricts the ability to leave “excess” earnings inside a corporation to grow in what would be deemed a “passive investment portfolio”.
Close “loopholes” that convert income into capital gains –
Income that “should” be taxed as salary or dividends is not easily able to be converted to capital gains (taxed at a much lower tax rates).
The Liberals believe that certain taxpayers are not paying their fair share of taxes when they use corporations to “hide” earnings or disperse them using “loopholes” currently prevalent within our tax system.
The problem with the Liberal Tax Changes is not that they want to revamp the system; the problem is that they wholeheartedly believe that small businesses and other corporations do not pay their fair share of taxes. Small business owners not only sacrifice their own personal finances and also their credit worthiness to become entrepreneurs and employ others, but they are often times the last people to get paid.
Small business owners don’t have pensions that they will draw from once they retire, nor do they have extended medical insurance offered by private corporations. They also have to put their own personal assets on the line to take risks to employ others who get to have a secure job that pays them “dividends” that owners simply do not get.
Read the full Moneysense.ca Article here to get a good sense of the changes and what’s likely to become reality for so many hard working entrepreneurs in Canada.
Check out our last post here.