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EDITORIAL: Liberals’ tax plan is well-intended but poorly executed

Finance Minister Bill Morneau. (Image: Bill Morneau Facebook)

An ArmchairMayor.ca editorial by Mel Rothenburger.

FOR A MAN who is so media savvy, Justin Trudeau’s ham-handed handling of tax reforms is surprising.

He faces a major popularity crisis with his plan to restrict so-called “tax sprinkling” — in which business owners can lower their tax rate by “hiring” family members, whether or not they do any actual work. Stricter age requirements would be put in place.

There are other measures included in the plan, but the media focus has been on the perception that mom and pop businesses will face tough times under the new tax regime.

The usual negative nabobs of media negativism are painting a picture of destruction of the bulwark of the Canadian economy, as if the little guys of business will be broken. But is that reality?

As Trudeau pointed out Wednesday at a party caucus retreat in Kelowna, it’s actually aimed at high-income earners, the ones who get breaks those little guys don’t.

“People who make $50,000 a year should not pay higher taxes than people who make $250,000 a year,” he said.

And Finance Minister Bill Morneau said the changes will only affect those who earn $150,000 or more and who still have money to shelter from taxation after maxing out RRSPs and TFSAs.

The Liberals say allowing professionals to incorporate their businesses under current tax rules gives them an unfair advantage. They characterize their plan as closing tax loopholes.

The intent, then, is not to do injustice to the average small-business owner, but to bring high-income earners into line with what everybody else is paying.

What’s left, however, is whether the result matches the intent.

Doctors, lawyers and accountants hate the plan. On the other hand, the Canadian Nurses Association supports it, saying it aims to treat “all sources of income similarly and equitably, based on the principles of social justice.”

But the cat is out of the bag, the horse is out of the barn, the ship has sailed. Opponents of the plan have gotten the upper hand. It has become a no-win proposition for the government. But what do Trudeau and Morneau do? They double down, insisting they’re going ahead with the plan, on their own schedule.

What they could do is back off, saying they understand concerns, listen to the Canadian Chamber of Commerce’s idea to extend the consultation period past the Oct. 2 deadline. Sometimes, words are everything. Now is a time to reassure the public that the government is willing to listen, meanwhile helping people to better understand the objective and the details.

Instead, Trudeau and Morneau only offer to do some “tweaking.” Where are the crisis managers, media consultants and political strategists when you need them?

mrothenburger@armchairmayor.ca

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About Mel Rothenburger (4931 Articles)
ArmchairMayor.ca is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At ArmchairMayor.ca he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

4 Comments on EDITORIAL: Liberals’ tax plan is well-intended but poorly executed

  1. Ken McClelland // September 7, 2017 at 10:17 AM // Reply

    Yup, ban expression of opinion and freedom of speech. Isn’t that the hallmark of every progressive society? I don’t believe most self-employed small business people consider themselves to be especially entitled, they have in most instances simply chosen self-employment or small enterprise as their means of making a living, and in many instances by extension providing a living for their employees. They do, however, resent being targeted and categorized by a tax revenue-hungry and initiative-killing government as dodgers and cheats. There is, by and large, no company or indexed public pension with continuing benefits, vacation pay, paid statutory holidays, overtime pay, employment insurance benefits, sick pay, long-term disability pay or other public social safety net for self-employed persons. They have to build their own net within existing permissible tax law, and should be allowed to continue to do so. Many small business people risk everything including their homes, personal property, and their reputation in order to start or maintain their businesses. They should not be penalized or made to look less than honest by an over-spending government that cannot keep its own financial house in order, for doing so.

    • ajaxtoobigtooclose // September 7, 2017 at 11:00 PM // Reply

      Very well said Ken.

    • And one of the greatest discussions of organized society, between government versus private enterprise continues.
      One one hand all those bad intended people working for a government completely out of tune with reality. Realities set forth by the “free enterprise” saviors of humanity.
      I don’t believe governments are big squanderes any more than I believe too much “free enterprise” is killing our planet…but was that another argument?

  2. What kind of convoluted logic is this Mel-ex media guy?
    The problem is, as you pointed out earlier in your discourse, the evil media is once again spouting misconceptions and lies. The government has put together a good and sensible plan which you admitted to and then you go on trashing it because some rich, uber-conservative groups don’t like to admit to their uberly misplaced sense of entitlement.
    I hope Trudeau and Moreau come to town to take your pen away…because that is what is needed sometimes.

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