The Liberal Tax Reform Plan Step Back
The Liberals have decided to step back on their ambitious tax reform plan for small businesses this week.
Bill Morneau, the Federal Finance Minister, has been unrelenting up until this point in trying to get his tax reform plan endorsed by Canadians. This has caused a huge problem for the Liberal’s popularity. The plan is terrible and Both Morneau and Trudeau have failed to answer questions during question period in the House. We suspect that Trudeau’s spending problem is directly tied to many of the reasons for this incredible tax reform proposal that impacts Canadian Small- and Medium-Sized Enterprises (SMEs). Canadian GDP is directly tied to small businesses and we believe that suppressing that growth will ultimately hurt the Canadian economy (go figure!).
What’s Being Done
Today, the government is appealing to the needs of Farmers and Fishers that would have restricted the conversion of income into capital gains. This aspect of the tax plan addresses the impact of what it means when small business owners in these industries seek to pass on their businesses to their children.
Morneau also decided to step back on his passive investment income proposal, which sparked huge controversy with business professionals nation-wide. The Liberals recently introduced a threshold for passive investment income of $50,000 per year to allow small business owners to save for retirement, as well as for other purposes – Thanks friend. We appreciate your ‘generosity’.
In a last-ditch effort to save face, the Liberals decided to stick with one of their campaign promises (We know, it shocked us too!!) and lower the small business tax rate from 10.5% to 9% – The catch is that the full effect won’t take place until 2019. The plan is to lower the tax rate from 10.5% to 10% on January 1st, 2018 and from 10% to 9% on January 1st, 2019.
Our Final Thought
The reason so many small business owners are up in arms over this controversial tax reform plan is because it seeks to harm the very group of Canadians that the Liberals promised to help. Small business owners employ more Canadians than all the largest firms, combined; so why stunt all this growth when the spending problem lies with the Government of Canada? Why make it harder for hardworking Canadians to make a living and save for retirement? Why stifle the ability for small businesses to pivot during tough times? Why make it harder for risk takers to take risk and make ends meet?
These are just some of the questions the Government has failed to answer adequately and Canadians expect more from the Liberals. Start answering your questions during question period and stop being a politician. Accountability is paramount and we expect our government to be ultimately accountable for the promises they make and the rules and regulations they put into action.
Check out our last post here.