The fight against the federal government’s proposed taxes on small business is picking up steam, but should all people who identify themselves as small businesses, small farmers or small “c” conservatives really be on that bandwagon? Or are we just helping SOME well-heeled dentists, financiers, accountants, wealth managers, venture capitalists, architects, doctors, lawyers or “consultants” to use a loop hole to stash away gobs of money to avoid taxes.
In the Globe and Mail on Saturday there was a full-page ad pleading for small businesses and entrepreneurs to sign a petition to the Prime Minister. Half the page listed sponsors.
I didn’t see one farmer identified, local grocery store owner or small oilfield reclamation owner.
I did see names familiar to us from CBC’s Dragon’s Den, Arlene Dickinson and Brent Wilson, and a number of very well-heeled venture capitalists.
If your small business pays your spouse and children even though they do no work for the firm, sign the petition. But if you are a small operation that pays your spouse and children because they actually work, these proposed tax changes are irrelevant. Your wage expenses continue to be legitimate write-offs.
If you have great gobs of cash at the end of each fiscal year and keep that money in the company to invest in stocks and other investments for the sole purpose of building your retirement nest egg and avoid personal income tax, then sign the petition.
But if you are a small “c” conservative who is planning to retire the old-fashioned way through RRSP’s that trigger personal tax rates when taken out, investing after tax-dollars in tax free accounts, or using the proceeds from the sale of your small business, farm or family home, assets purchased with after-tax dollars or business income, then this is not your fight.
If you are a small business or a self-described entrepreneur and believe you are the economic engine of the country and deserve special privileges because of the risks you take, as has been argued, then by all means support the fight.
However, if you don’t buy the argument that these select few are so special that they should pay lower taxes on their retirement income than you and your family, then say no.
The fight against these changes is being financed by a rich lobby group attempting to make their personal interests a populist outrage.
Do we really want a tax situation in Canada like our southern neighbours where multi-billionaire Warren Buffett admits he pays less in personal income taxes than his secretary!
The majority of small businesses, small farmers and entrepreneurs will not be affected because these changes are about net income and legitimate business expenses.
Before you join this fight, check your net income and see if it’s really about you. And if you are a wage earner, there’s absolutely no tax saving loopholes for you whatsoever so why martyr yourself to this highly organized lobby group.
This campaign is primarily about incorporated individuals hiding under the well-respected umbrella of small business to exploit the lower tax rates for their personal gain.
Don’t be snookered.
by B.P. Schimke