Lib­er­als un­der­mine fair­ness in tax sys­tem

The London Free Press - - COMMENT -

The last few months’ po­lit­i­cal head­lines in­dis­putably ex­posed the mess that sur­rounds Canada’s tax sys­tem.

Prime Min­is­ter Justin Trudeau and Fi­nance Min­is­ter Bill Morneau toured the coun­try talk­ing about “tax fair­ness” as they pitched re­vi­sions to cor­po­rate tax mea­sures.

Rather than bring the coun­try to­gether, this fo­mented some­thing of a cul­ture war, as small-busi­ness own­ers felt they were la­belled cheats and Morneau mulled re­mov­ing mea­sures such as in­come split­ting.

Morneau has since been fined by the ethics com­mis­sioner for vi­o­lat­ing two pro­vi­sions of the Con­flict of In­ter­est Act re­lated to his fail­ure to prop­erly dis­close a French villa. He’s also now un­der a sep­a­rate probe for spon­sor­ing a bill on pen­sion ben­e­fits while in­di­rectly hold­ing shares in his fam­ily firm that could po­ten­tially ben­e­fit from the bill.

Then we learned the shock­ing news the Canada Rev­enue Agency wanted to tax low-in­come earn­ers for the em­ployee dis­counts they re­ceive on prod­ucts pur­chased at their own stores, in­clud­ing meals and cloth­ing. It was one of the mean­est ex­am­ples of nickel-and-dim­ing the lit­tle guy Cana­di­ans have seen in a long time.

Adding in­sult to in­jury, the re­lease of The Par­adise Papers re­vealed many rich Cana­di­ans have off-shore ac­counts in tax havens that al­low them to legally avoid pay­ing the same tax rates paid by mid­dle-class Cana­di­ans.

So tax loop­holes are OK for the rich, but not for the lit­tle guy?

All this has un­der­mined Cana­di­ans’ con­fi­dence in our tax sys­tem, and not sur­pris­ingly a new Nanos poll shows a ma­jor­ity of Cana­di­ans be­lieve “Lib­eral eco­nomic poli­cies favour up­per-in­come rather than lower-in­come peo­ple.”

This is where the lat­est Post­media col­umn by Jim War­ren comes in. Our res­i­dent Lib­eral strate­gist pro­poses a royal com­mis­sion on tax­a­tion, some­thing that hasn’t been done since 1966.

War­ren writes a “pub­lic in­quiry would pro­vide con­crete, work­able rec­om­men­da­tions” to mod­ern­ize our tax sys­tem. It’s worth con­sid­er­ing.

Also worth a look is a pro­posal from NDP MP Mur­ray Rankin, de­tailed in a re­cent Post­media col­umn by Tom Parkin, that would tax money leav­ing the coun­try bound for tax havens.

If the Lib­er­als were af­ter ac­tual fair­ness, they would also look at the over­all tax bur­den on Cana­di­ans and rec­og­nize cur­rent tax bur­dens in this coun­try are killing jobs and pros­per­ity.

But don’t hold your breath on that score.

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