Take the mid­dle road on taxes

The Globe and Mail (Alberta Edition) - - GLOBE FOCUS -

Re A Tax Af­fect­ing Only The Wealthy? You De­cide (Re­port on Business, Sept. 15): The Lib­eral govern­ment should find some mid­dle ground on the cor­po­rate tax-re­form is­sue. Set up a pri­vate cor­po­ra­tion and pay your­self in div­i­dends? Sure. In­vest re­tained earn­ings in the cor­po­ra­tion? Up to a point. At some num­ber ($3-mil­lion?), it’s no longer about plan­ning for re­tire­ment, but about wealth ac­cu­mu­la­tion. Which is fine, but should not get spe­cial treat­ment.

Pay div­i­dends to a spouse? Sure. The tax code of­fers ways spouses can re­duce to­tal com­bined tax. Pay div­i­dends to kids? No way, re­gard­less of their age. If pri­vate cor­po­ra­tions can do this, then the tax code should al­low salaried em­ploy­ees to do some­thing equiv­a­lent. (Full dis­clo­sure: I was a salaried em­ployee all my life, some­times with min­i­mal ben­e­fits and some­times with great ben­e­fits.) – Ira Green­blatt, Ottawa One way the Lib­er­als could avoid a series of head-on col­li­sions with small-business own­ers, farm­ers, med­i­cal pro­fes­sion­als and other tar­geted groups is to raise the cor­po­rate tax rate. This would leave the present op­tions in place, but widen the net to pro­duce more tax rev­enues. – R.J. Mon­te­rio, Fred­er­ic­ton

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