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  #13261  
Old Posted Sep 13, 2017, 8:09 PM
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^ Profit is supposed to be the incentive, not a discounted rate of taxation.
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  #13262  
Old Posted Sep 13, 2017, 8:15 PM
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Originally Posted by esquire View Post
^ Profit is supposed to be the incentive, not a discounted rate of taxation.
If it weren't for that discounted rate of taxation my company would never have made it starting out. Additionally I know acquaintances whose entire retirement was tied into selling their company but now they stand to lose half of their retirement. They were working for the last 30 years under the presumption that things would stay as they are. They built their entire future and life savings around that. This plan does nothing but benefit publically traded corporations.
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  #13263  
Old Posted Sep 13, 2017, 8:36 PM
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Originally Posted by O-tacular View Post
If it weren't for that discounted rate of taxation my company would never have made it starting out. Additionally I know acquaintances whose entire retirement was tied into selling their company but now they stand to lose half of their retirement. They were working for the last 30 years under the presumption that things would stay as they are. They built their entire future and life savings around that. This plan does nothing but benefit publically traded corporations.
You do realize that for the thousands of us who are employed by private and public companies, non-profits etc you're complaints don't hold much water, don't you? If you can't make money paying the tax structure we do, then maybe you should do something else. As it is you're expecting us to subsidize your business. If I can't "sprinkle income" to my spouse who does lots of tasks that allows me to fulfill my employment, why should you?

There was obviously a lot of abuse in sheltering income going on.
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  #13264  
Old Posted Sep 14, 2017, 12:18 AM
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What O-tacular is saying is that many people have made important financial decisions affecting their entire future based on the assumption that the taxation system which has existed for the last 40 years was going to stay the same (or at most be modestly tweaked).

Instead JT & Morneau have decided to blow the whole damned thing up, and to add insult to injury, have given us only a 75 day consultation period! The tax code we have now required six years to develop and formulate. 75 days is an insult pure and simple. It just shows that JT has no intention to make any changes to his plans whatsoever. What arrogance!!!

Meanwhile hundreds of thousands of small business owners, professionals and farmers will have their retirement plans, family succession plans and total net worth completely hammered.

Want to see what's happening. Take a small corner store the owner was going to sell to finance his retirement. He was hoping to get $1M for it. Now, with the new tax regime, that corner store may only be worth half it's value or less ( because the advantages of being an entrepreneur have just disappeared overnight and nobody wants to buy it any more). The original owner suddenly doesn't have enough to retire. What's he going to do? I guess he has no choice but to keep working until he is too ill to continue........

Welcome to retirement planning Justin Trudeau style...........
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  #13265  
Old Posted Sep 14, 2017, 12:55 AM
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Canadians....Vote this SOB out in 2019. If this doesn't make you see the light...nothing will.

God help Canada.
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  #13266  
Old Posted Sep 14, 2017, 1:19 AM
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I'm still not seeing the 'light'.
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  #13267  
Old Posted Sep 14, 2017, 1:35 AM
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I'm still not seeing the 'light'.
But maybe you're feeling the heat........
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  #13268  
Old Posted Sep 14, 2017, 1:40 AM
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But maybe you're feeling the heat........
Like I said, I run an incorporated small business, and this changes nothing for me.

I'm far less happy about my PC government talking about introducing a health premium. That has far more effect on me.
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  #13269  
Old Posted Sep 14, 2017, 1:56 AM
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Originally Posted by esquire View Post
^ Profit is supposed to be the incentive, not a discounted rate of taxation.
Right, and since there's an extreme correlation between profit and rate of taxation, it's essentially the same thing - and we agree it needs to be an incentive, otherwise it will be even less interesting to take the risk of launching a business and we'll end up with even fewer Canadians doing it (it's already a problem - Canada is lagging on that front. This will make it worse).
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  #13270  
Old Posted Sep 14, 2017, 3:25 AM
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This will make it worse).
There's actually no evidence for that. The US doesn't allow it now.
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  #13271  
Old Posted Sep 14, 2017, 4:53 AM
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Canadians....Vote this SOB out in 2019. If this doesn't make you see the light...nothing will.

God help Canada.
Hmm, booming economy, low unemployment, our reputation is great. Why vote for change?!?

Plus, Andrew Scheer is a pretty weak and out of touch in my opinion.
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  #13272  
Old Posted Sep 14, 2017, 5:48 AM
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Originally Posted by O-tacular View Post
I work for my family's small business. I am the furthest thing from a conservative and I am not a high income earner. The proposed changes to the tax code completely threaten the entire structure of operating a small business. This will hurt small and medium businesses across the board and only further corporatize our economy. If you take away all the incentive and frankly the safety net for business owners why would they bother? Why not go work at a big multinational corporation instead?
I see two problems with the proposed changes....

Family business - How is anyone going to be able to tell the difference between income sprinkling and hiring your spouse or kids to help out with the business. It is impossible to police. This desire to have salaries paid to adult children between the ages of 18 and 24 taxed as if this parents made the money is silly and messes up transition planning on a family business.

A big corporation is going to make a profit but only pass along a certain percentage to the owners. The corporation is going to put some of the cash aside for growth or as a cash reserve in case it has some problems down the road. Small business do the same thing. Except the government now thinks keeping money in the small business as a reserve is a form of tax avoidance instead of a reasonable business decision. Some people probably do it for tax reasons others do it because it results in a stronger balance sheet when borrowing money or the business is cyclical and they need a reserve to ensure sufficient cash flow to cover payroll and other expenses.

These one person companies (MDs and other professionals or holding companies) are probably using these things to minimize tax. Real small business with a couple of employees do these things because they are running a business. The problem is there are lumping both types into the same pot.
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  #13273  
Old Posted Sep 14, 2017, 8:15 AM
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Originally Posted by casper View Post
I see two problems with the proposed changes....

Family business - How is anyone going to be able to tell the difference between income sprinkling and hiring your spouse or kids to help out with the business. It is impossible to police. This desire to have salaries paid to adult children between the ages of 18 and 24 taxed as if this parents made the money is silly and messes up transition planning on a family business.

A big corporation is going to make a profit but only pass along a certain percentage to the owners. The corporation is going to put some of the cash aside for growth or as a cash reserve in case it has some problems down the road. Small business do the same thing. Except the government now thinks keeping money in the small business as a reserve is a form of tax avoidance instead of a reasonable business decision. Some people probably do it for tax reasons others do it because it results in a stronger balance sheet when borrowing money or the business is cyclical and they need a reserve to ensure sufficient cash flow to cover payroll and other expenses.

These one person companies (MDs and other professionals or holding companies) are probably using these things to minimize tax. Real small business with a couple of employees do these things because they are running a business. The problem is there are lumping both types into the same pot.
Uh, one person companies? Have you ever been to a physicians office with just one person working there?
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  #13274  
Old Posted Sep 14, 2017, 11:30 AM
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But maybe you're feeling the heat........
Somebody is feeling the heat though.

There are now two NB Liberal MPs actively opposing the Morneau tax plan, one of whom says he will definitely vote against it (at the peril of his political career).

Lets hope a dozen more Liberal MPs from across the country grow a couple and do the same........
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  #13275  
Old Posted Sep 14, 2017, 11:54 AM
kwoldtimer kwoldtimer is online now
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Originally Posted by lio45 View Post
Right, and since there's an extreme correlation between profit and rate of taxation, it's essentially the same thing - and we agree it needs to be an incentive, otherwise it will be even less interesting to take the risk of launching a business and we'll end up with even fewer Canadians doing it (it's already a problem - Canada is lagging on that front. This will make it worse).
Do the current Liberal tax proposals change the small business tax rate (thinking marginal (nominal?) vs effective rates)?
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  #13276  
Old Posted Sep 14, 2017, 12:16 PM
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Originally Posted by MonctonRad View Post
Somebody is feeling the heat though.

There are now two NB Liberal MPs actively opposing the Morneau tax plan, one of whom says he will definitely vote against it (at the peril of his political career).

Lets hope a dozen more Liberal MPs from across the country grow a couple and do the same........
"Lets" hope is implying everyone agrees with you which is certainly not the case.
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  #13277  
Old Posted Sep 14, 2017, 1:42 PM
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Originally Posted by TownGuy View Post
"Lets" hope is implying everyone agrees with you which is certainly not the case.
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Originally Posted by Black Star View Post
Canadians....Vote this SOB out in 2019. If this doesn't make you see the light...nothing will.

God help Canada.
I agree with him, mind you I'm from out west where I see Trudeau at the helm where I've see him scuttle close to $60 Billion worth of energy infrastructure projects, give $300 million to Bombardier (one of the greatest polluting downstream industry that the energy industry now has to answer to), and push to implement this new tax to pay for it all, and carbon tax (eerrrr levy?), to pay for it all.
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  #13278  
Old Posted Sep 14, 2017, 2:08 PM
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I agree with him, mind you I'm from out west where I see Trudeau at the helm where I've see him scuttle close to $60 Billion worth of energy infrastructure projects
That didn't happen. That's a figment of your imagination. Both Northern Gateway and EE were DOA, and Trudeau approved the rest of the projects.
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  #13279  
Old Posted Sep 14, 2017, 2:11 PM
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Liberal MPs would have to be pretty naïve not to think that Morneau's announcement would bring them plenty of heat from those directly affected. But how many people who aren't in that category are up in arms over this? I'd wager that there are extremely few.

That said, I suppose Liberal MPs who squeaked out narrow wins over Conservative runners-up in the last election have a right to be at least a bit nervous.
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  #13280  
Old Posted Sep 14, 2017, 2:14 PM
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Originally Posted by theman23 View Post
Uh, one person companies? Have you ever been to a physicians office with just one person working there?
What is common with some but not all law offices and some medical clinics is this setup:
1. Each doctor is incorporated and bills the ministry or client directly
2. Each doctor then owns a percentage in the shares of the company that owns the office furniture, pays the rent and the receptionist. This services company then charges the individual partners company to cover its costs.
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