Tax reform puts doctors, small business in spotlight
“People respect doctors’ hard work, but also understand that they are fairly well paid for it. Hysterical claims that the government is persecuting doctors in trying to level the taxation playing field are more likely to elicit eye rolls than sympathy among other taxpayers.”
PATRICIA WILMOT TORONTO
Re How good ideas go sour, Editorial, Sept. 15 Folks who have been taking advantage of the tax fiddle known as “income sprinkling” or “income sheltering” must realize that their accountants have hit upon a way to reduce taxation that is essentially incompatible with the concept of fair taxation of personal income.
I encourage the Liberal government to move far beyond this particular “loophole” to rein in the vast amount of taxes that are lost due to over-generous treatment of executive stock options and capital gains on financial speculation/investment. David B. Clemens, Toronto Prime Minister Justin Trudeau’s modest proposal for tax fairness has hit a raw nerve. Conservative Leader Andrew Scheer sees nothing wrong with individuals incorporating themselves in order to be taxed at the lower corporate rate, believing this will create jobs. But trickle-down economics has been a colossal failure: instead of benefiting everyone, lowering taxes during the past four decades mainly benefited the rich while creating massive inequality in Canada.
Tax cuts are demolishing social services. Precarious jobs, plus spikes in homelessness and hunger, have resulted in considerable anxiety and depression, with little effective help available. The Panama Papers showed rich elites hiding their money offshore to evade taxes. Such greed inspired Pope Francis to call for a different business model, one that embraces ethical and communal responsibility.
Canada requires additional tax revenue to deliver on the Truth and Reconciliation Commission’s urgent call for fairness to Indigenous communities, and to implement new universal programs, such as pharmacare, child care and dental care. Greed must no longer trump tax fairness. Ben Carniol, Toronto Re Liberals defend tax ‘fairness,’ Sept. 13 “Taxing the rich” makes for a great sound bite — but the Trudeau doctrine of “spend the money first and find it second” risks killing the goose that laid the golden egg.
It continues to go unreported that the top 1 per cent of income earners paid a staggering 21.2 per cent of the total federal and provincial taxes while the top 10 per cent paid 54.8 per cent (all 2010 figures). Meanwhile, the bottom 50 per cent of Canadian income earners contributed just 4 per cent. That left the “middle” 40 per cent of earners paying 41.2 per cent.
Our progressive tax system seems pretty fair in that context, doesn’t it? Sure, there are a few cheaters — but that’s who the CRA auditors are supposed to go after — that’s what they are paid to do. Don Mustill, Markham A lot of folks are complaining because the Liberal government in power in Ottawa seeks to level the playing field with regard to taxation. This is not a new problem and its pervasiveness is telling.
If you have an income of more than $200,000 annually, you might seek ways to lower your tax burden. There are, of course, legitimate ways of doing this and there are also ways that are not legitimate, such as establishing blind trusts in the Caribbean.
The bottom line is that the uncollected taxes are then the burden of the remaining taxpayers. Our taxes are higher because some folks have not paid their fair share.
I think the government is on the right track on this one and should go further and collect the taxes on those who have avoided paying by hiding their income in foreign countries. Ronald J. MacPherson, Port Colbourne, Ont.
I’m no politician, but it seems to me that we have two choices: we can eat the rich (as Rousseau suggested), or we can make the personal and corporate tax rates the same, thereby eliminating the incentive for the wealthy to avoid paying their fair share. Barry Healey, Scarborough Re Closing tax loopholes a crucial step toward fairness, Opinion, Sept. 19 Canadians do believe in tax fairness. The ultimate fairness is that we all pay the same dollar amount of tax. This is fair. Or, we all pay the same rate of tax. This is also fair. Or, we can pay a graduated rate of tax increasing with income. This is not necessarily fair, but it is not unfair either.
However, if we pay an unequal rate of tax, how steeply should the curve rise with income? This debate is then no longer about fairness, it is now about responsibility. What is the responsibility of the better-off to support those less fortunate?
The word “loophole” is a great word for those arguing against any form of tax expenditure because it is vague. The writer does not provide any evidence of loopholes, but merely complains about corporate tax cuts in the same paragraph. These are not loopholes, but a deliberate policy objective to support small business and business in general. I haven’t heard that the Liberal government is planning to change these any time soon.
Those hiding money offshore are criminals and should be fully prosecuted. Those using existing tax policy to minimize income taxes are not criminals as you seem to suggest.
Those using CCPCs are not criminals, but are using them in ways not intended by public policy. The government should be moving to prevent uses of CCPCs that are not intended. However, it needs to be careful that the changes are proportional and do not have unintended consequences.
At the end of the day, what you might think is fair I might not think is fair at all, and that’s why we need to continue to have a healthy debate. David Howard, Toronto The federal Liberal government thought it would be an easy take, unnecessarily overtaxing small business.
As a retired small business owner of 45 years, handing down my portion of our business to my niece and nephew is, in the Liberal view, dishonest and tax evasion; allowing young blood into the company so they can work with their father is, in their view, tax evasion.
Presently, the way automation is replacing workers, this government should be supporting and helping all businesses that are generating taxes and employing Canadians.
Maybe it would be wiser to control spending instead of finding ways to overtax small businesses, and all Canadians. Ron Whitehorne, Almonte, Ont. Re Trudeau takes a sinister stand against doctors, Opinion, Sept. 21 I congratulate Dr. Nadia Alam on her marvellous achievements and her courage and work ethic, but she is truly misguided in her analysis of the tax changes being proposed by the Liberal government. As a doctor, she earns a great deal more than other front-line medical professionals, yet they don’t have the ability to incorporate and take advantage of the various tax loopholes currently in place. Nor do other professionals, such as teachers, who are salaried and earn considerably less than doctors.
I find nothing in Trudeau’s plans to make me disrespect my family physician or any of the other doctors whom I have had occasion to see. They do a great job and I have faith that they will continue to be professional. Dr. Alam has done a wonderful job of outlining the various sacrifices she has made to achieve her status, which includes a job that she finds infinitely satisfactory.
But there is nothing sinister about trying to provide an equal playing field for all members of our society. And let’s face it, there are many in small businesses (including doctors) who have taken advantage of the loopholes in order to avoid paying their fair share of taxes. If anyone is responsible for lowering the prestige of the medical profession, it is those who are promoting the continued disparity between the doctors and other front-line medical professionals (nurses, technicians, personal support workers, etc.). Stephen Bloom, Toronto A recent Ipsos poll showed that 56 per cent of taxpayers support the government’s commitment to remove specific tax advantages for incorporated small business owners. If Dr. Nadia Alam wants to understand why that percentage is likely to grow, she need look no further than the hyperbole of her recent op-ed piece.
The tax code’s purpose is not to recompense anyone for their life choices, their hardships in achieving their goals, or their parents’ sacrifices. Its purpose is to collect money from residents who have income in order to finance the operations of the provinces and the country — from hospitals to the military to educational institutions.
The overriding criterion of the code should be fairness, so that people earning equivalent incomes pay about the same amount of tax. While there is no doubt that other imbalances exist, that does not justify retaining these unfair provisions.
In this public relations war that some doctors are waging, they are proving themselves to be their own worst enemies. People respect doctors’ hard work, but also understand that they are fairly well paid for it. Hysterical claims that the government is persecuting doctors in trying to level the taxation playing field are more likely to elicit eye rolls than sympathy among other taxpayers. Patricia Wilmot, Toronto The only thing sinister regarding this issue is reading the Ontario Medical Association (OMA) president-elect’s misrepresentation of what the Trudeau Liberals are attempting to do with their tax plans.
Many Canadians share the heartwarming rags-to-riches new-immigrant upbringing story with Dr Alam. What most of us do not share is the opportunity to legally hide federally taxable income because we do not have the ability to set up Canadian Controlled Private Corporations and sprinkle our income to our not-truly-employed children.
Trying to paint Justin Trudeau as not respecting the hard work of new immigrants, or the excellent care our physicians provide their clients, is simply a sad and desperate move by one of the leaders of the OMA. Prime Minister Trudeau has not “mocked my family’s sacrifice and twisted my success into something . . . sinister.” He is attempting to remove clearly unfair but legal tax loopholes that are taken advantage of mainly by the top 1 per cent of earners.
Dr. Alam should chat with the hundreds of physicians who feel the proposed tax changes are fair and overdue. Scott Gordon, Sydenham, Ont.
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