Taxes
- Details
- Published on Sunday, 29 November -0001 16:00
- Written by editor
Rumours are circulating that the Liberals are planning to backtrack on some of their proposed tax reforms because of the Conservatives’ relentless, misleading and at times blatantly false attacks [1].
Let’s be clear: these attacks are not about saving the family farm or helping small business. Conservatives are fighting to preserve tax loopholes for the wealthiest Canadians. We need to stand up for tax reform, or else the Liberals will back off and that could kill tax reform for years to come.
The Canadian Federation of Independent Business started a petition opposing the reforms and has about 15,000 signatures. Already over 9,000 of us have signed this open letter, but we need you to add your name so we can show the Liberals that the numbers are on our side.
Supa, will you add your name to the open letter now?
Let’s speak up now in defence of a just economy where everyone pays their fair share.
With thanks,
Brittany, on behalf of the Leadnow team
Original message below - read on for more information about why this campaign matters:
The Liberals want to close taxloopholes that let some of the wealthiest Canadians shelter incomes and reduce their taxes — but a Conservative misinformation campaign threatens to scare them out of doing it.
We need to make sure the Liberals hear from as many ordinary people as possible that they support these reforms and want the wealthy to pay their fair share in tax.
Will you add your name to our open letter?
Tomorrow, Parliament resumes for the fall session, and the new Liberal tax reform proposal is going to be at the top of the agenda.
Their plan is to close tax loopholes that benefit the wealthiest Canadians — high income professionals making between $150,000 to millions a year.[2] Closing these loopholes could save us over $1 billion a year, and be used to fund public services like health, education and child care.[3]
Right on cue, Conservatives and the business lobby started spinning a web of misinformation, picking fights with economists, and claiming the reforms will “kill the family farm” and destroy local businesses.[4-6]
Except the data is clear: it’s a small group of high-income earners (mainly the super-rich) benefitting from these loopholes, and they’ll be the group most affected by closing them.[7]
Using farmers, grocers, and local convenience store owners as victims is just cheap political cover for what’s really an attempt by the wealthy to avoid paying their fair share of tax.
This small but very vocal misinformation campaign threatens to scare the government out of taking this modest, but important step towards building a fairer tax system — which is why we created an open letter to Minister Morneau to let him know Canadians support the reforms. Will you take a moment to add your name? If enough of us sign, it will give Morneau the confidence to keep pushing ahead.
The Canadian Federation of Independent Business started a petition opposing the reforms and has about 15,000 signatures.[8] Let’s quadruple that number by flooding your open letter with signatures of support.
Add your name
A majority of Canadians don’t think that Canada’s wealthy pay their fair share in tax[9]. Well, the proposed reforms would begin to help to change that. To be clear: these reforms aren’t about tax cheats. They’re about a broken tax system that’s allowing a small group of wealthy Canadians to take advantage of loopholes that weren’t designed for them, but that they’re increasingly using to shelter their wealth and lower their taxes.
Three things you need to know about the proposed reforms:
1. These reforms will affect the wealthiest Canadians most. 80% of people making over $2.3 million a year are taking advantage of these tax loopholes to lower their taxes.[10] These kind of loopholes are just one example of how a bad tax system can drive income inequality.
2. Contrary to the spin, most small businesses will not be affected by the changes because their income is not high enough. To significantly benefit from using these loopholes, you’d need to earn at least $150,000. A vast majority of small business owners earn under 150,000 a year, while two-thirds earn less than $73,000.[11]. Other tax advantages to help small businesses start and grow won’t be affected.
3. The reforms won't kill the family farm, or prevent farmers from passing them down to family members. Other tax advantages to help out farmers pass down their farm (such as the $1 million lifetime capital gains exemption) won’t be affected by these reforms. [12]
Ordinary taxpayers are affected by whether or not government has the revenue to invest in social programs like child care, health and pensions. One of the best ways to find this money is to make taxes more fair. Closing these loopholes could save us at least $1 billion a year.[13]
Support fair taxation to help build a better Canada. Add your name to open letter.
Unless ordinary Canadians speak up to support these reforms, the only ones the government will hear from are a small group of vested interests who want ordinary taxpayers to continue to subsidize their incomes.[14]
Last year when the Liberals proposed closing another unfair taxadvantage — the stock options loophole — pushback from the business lobby made them postpone any action. If we let conservatives scare away politicians from making progressive changes to our tax code, we’ll never get the fair economy that we all deserve. Business groups are gearing up for a huge lobbying effort to oppose the reforms — so we need to come together to act now.[15]
Katelynn, will you sign the open letter?
https://act.leadnow.ca/fair-share/
Thanks for all you do,
Brittany, on behalf of the Leadnow team
P.S. If you want some more nitty gritty details on the reforms, here’s a little more information. In essence reforms will tighten restrictions on three ways people can use private corporations to reduce their taxes. These are:
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Income Sprinkling: The wealthy can a reduce their taxes by using a private company to funnel money to family members who do no work for the business. This loophole alone costs the government at least $250 million per year. Regular families are not able to incomes split like this, and the proposed reforms would stop it. Family members who are actually working for the business won’t be affected.
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Capital gains: There is a $835,716 lifetime capital gains taxexemption for small businesses. Because of this, the wealthy channel income through these businesses to take advantage of that exemption. The proposed changes would limit access to this exemption.
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Passive investment: Money kept in bank accounts that isn’t invested in the active operations of a business (like machinery or employees), but is being channeled through a small business for investments in stocks and real estate in order to avoid taxes. Essentially small businesses are being used as tax shelters — something unavailable to average Canadians. Businesses will still be able to invest in machinery, equipment and employees.
Sources
[1] Rumours suggest changes coming to federal tax reform proposal (CBC): http://www.cbc.ca/news/canada/british-columbia/carole-james-cites-federal-tax-reform-rumours-1.4303381
[2] The Globe and Mail, “Tax changes are about levelling the playing field”
[3] Canadians for Tax Fairness, Factsheet: Dispelling the Myths on the Private Corporations Tax Loophole.
[4] The National Post, Why the Liberals proposed tax changes are taking a pounding,
[5] Vice, The rich are set to go to war over trudeau’s tax changes,
[6] CBC, http://www.cbc.ca/news/politics/andrew-scheer-michael-wolfson-analysis-wherry-1.4282027
[7] Globe and Mail, “The sky is falling on small businesses – or is it?”, and Canadian Centre for Policy Alternatives, Study Out of the Shadows”
[8] CFIB petition,
[9] Toronto Sun, Canadians don’t think the wealthy pay enough taxes, tax loopholes a big problem
[10] Globe and Mail, “The sky is falling on small businesses – or is it?”
[11] Statistics Canada in “Most Canadian Small Business Owners Earn Less Than $73K Per Year.”
[12] CBC, 3 questions about Liberal tax reforms, and Canadians for Tax Fairness, Factsheet: Dispelling the Myths on the Private Corporations Tax Loophole.
[13] CBC, Money talks lobbying tax reform This tax reform showdown is just the latest proof
[14] Canadians for Tax Fairness, Factsheet: Dispelling the Myths on the Private Corporations Tax Loophole.
[15] The Hill Times, Business groups target key MPs in push against tax reform