Steve Payne 2017-11-16 23:31:48
A TAX ASSAULT ON SMALL BUSINESS At a time when the general public was least engaged with the political news coming out of Ottawa, deep in mid-summer, Finance Minister Bill Morneau's department announced that it was about to introduce small business tax "reform." A 75-day consultation period would follow. Labelling their real targets as "tax cheats," the Liberals were proposing a major rewriting of the tax rules for professional corporations. There were four major parts to their plan. One, the distribution of income to family members, as a method of sheltering profits from the taxman, would be severely curtailed. Two, businesses that attempted to shelter profits by making investments in, say real estate or equities, within the company structure, would see that behaviour punished as well. Entrepreneurs who attempted to issue dividends to convert business income to lower-taxed capital gains income would find that method severely taxed. And finally, the "enhanced capital gains deduction" that was designed to help families pass their businesses onto the next generation - especially important to farmers - would be under the Liberals' axe. The negative reaction to all of this from contractors was predictable. During the 75-day consultation period, our industry was well-represented by the folks at the Canadian Federation of Independent Business (CFIB) and the major contractor associations. Rocked by the negative publicity, Morneau's bureaucrats have already backtracked on some of their originally-announced intentions. But until we see the final legislation, it's important for contractors to remain vigilant - and vocal.
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