Two promises kept
Liberals election platform vowed to bring in changes to both pot and taxes
The federal Liberals are being castigated in some quarters over two promises they made in the last election. And no, they are not being hammered for breaking their vows. They’re being pilloried for keeping them.
Well, pilloried might be too strong, but it is not for lack of trying on behalf of the opposition, especially on the Liberal promise to have some highearners pay more taxes.
If passed into law, the tax changes will limit incorporated business owners and professionals from sprinkling their income among family members to lower their tax rate, the changes would limit the corporate owners ability to convert regular income into capital gains (typically taxed at a lower rate) and they would also limit a private corporation’s ability to invest in stocks and real estate.
According to the Prime Minister, the goal of these changes is to curtail a system “that encourages wealthy Canadians to use private corporations to pay lower taxes than the middle class.”
For some, this kind of language constitutes a form of class warfare, an ‘us versus them’ scenario.
Taking advantage of ‘tax loopholes’ such as incorporating, is not doing anything illegal. Changing the system to close or limit such loopholes in the interest of tax equality is not class warfare. Unless, you are somehow wedded to the idea that you are entitled to a tax-rate not available to the ‘hoi polloi.’
The small business owners who are against the changes use the arguments that they’re entrepreneurial, they take risks, and they employ people. No doubt they are, and they do.
But, most people who run their own businesses do so because they don’t want to work for someone else. They want to be their own boss. They take risks to sell more, and they employ people to make even more products or to provide more services. And, yes, they expect, or hope, to make more money than being an employee.
So, outside the desire to be they’re own boss, it’s the money that is the driving force, not a lower tax rate. They take the risk hoping to make money; they employ people to make more money. There’s nothing wrong with that, it’s admirable and they should be rewarded. But, they shouldn’t be entitled to a different tax rate.
In spite of all the recent rhetoric and brouhaha from the vested interest groups, the proposed changes, maybe with some minor tinkering, will become law. And on the age-old political premise that there are more worker-bees than there are queen bees, the Liberals will pay little or no price for it come election time.
The other promise the Liberals are keeping, though it’s not getting quite as much ink as the tax issue, is the legalization of marijuana.
The government has said it wants to have legal marijuana available by July 1, 2018. However, it’s doubtful they can meet that target. While some strong concerns have been expressed by both the medical and police communities, no one doubts the Commons will pass Bill C-45, but it might face some generational pushback in the Senate.
The establishment of rules and regulations surrounding the sale and distribution was handed to the provinces and some are a bit reluctant to jump into the fray. But, New Brunswick has already named two local companies as its suppliers, and Ontario has announced it will sell pot through a government agency.
There has been no indication of how marijuana will be marketed in the Maritimes, but The Eastern Graphic recently suggested it would be an excellent chance for the three provinces to get together and create a regional agency. However, the move by New Brunswick is likely an indication that isn’t going to happen.
Legal marijuana is a concept whose time has come, and unlike the tax issue, few think it will move the political needle very much.