Tax change will hurt
Re The Sky Is Falling On Small Businesses – Or Is It? (Report on Business, Aug. 9): The private-corporation tax proposals by Finance Minister Bill Morneau are clear that their objective is to have business owners and employees ultimately be taxed at the same level. As a professional adviser to small businesses for more years than I care to think about, I disagree with the proposals as currently drafted (other than as they might apply to some MDs). They will be unfair to owners, discourage entrepreneurship and hurt the economy.
Unlike employees, owners risk their own capital. Most new small businesses fail, many others make profits significantly lower than the salary and benefits of an average government employee. Unlike employees with pension plans to which their employer contributes, owners have to fully fund retirement from savings.
The tax system has to be designed to provide encouragement to entrepreneurs to at least partially offset these negatives, as opposed to simply providing a perfectly level playing field with an equivalent employee.
I would exclude MDs from this analysis to the extent they are providing services paid for by the government. As such, they are essentially a specialized type of public-sector employee, one who does not generally incur the risks and disadvantages of business ownership referred to above. – Jan Holland, Montreal