There’s been a great deal of concern trolling going on over the past few days when it comes to the planned changes to self-incorporation to close the tax loopholes found therein. Conservative leader Andrew Scheer tweeted out another of his disingenuous messages yesterday, talking about “hiking taxes” on doctors – who are leading the concern trolling charge against this closure of self-incorporation loopholes – which is not surprising, but nevertheless not exactly the truth about what is going on.
Keeping taxes low helps young people looking for their first job. Hiking taxes, especially on doctors, makes it harder on Canadian families. pic.twitter.com/QFra6WcSE1
— Andrew Scheer (@AndrewScheer) August 11, 2017
Wait – so it’s a good thing that doctors can use loopholes to avoid paying taxes? https://t.co/mcUmd0CKFJ
— Dale Smith (@journo_dale) August 11, 2017
Meanwhile, economist Kevin Milligan has been dismantling the concern trolling arguments with aplomb, so I’ll let him take it from here:
Remember: the proposed tax changes have zero impact unless you are using CCPC to
a) shelter a passive portfolio
b) split income with family— Kevin Milligan (@kevinmilligan) August 9, 2017
To start, let's remember that the proposed changes don't affect all small businesses. 2/ https://t.co/FXQssvQcU8
— Kevin Milligan (@kevinmilligan) August 11, 2017
Here is current situation: if you passively save inside a CCPC, you pay a special high tax rate. That's under **current** rules. 4/ pic.twitter.com/hHG7NdMMVu
— Kevin Milligan (@kevinmilligan) August 11, 2017
Proposed change is to eliminate this 'refundable tax when dividend paid' thing (called RDTOH). No change to annual tax on passive income 6/
— Kevin Milligan (@kevinmilligan) August 11, 2017
You can see that in Table 7 of the Finance discussion paper here. Only impact is if/when you pay as dividend. 8/ pic.twitter.com/v9HFt0dRtX
— Kevin Milligan (@kevinmilligan) August 11, 2017
So, if your objection is "determining passive/active is new compliance burden", that's wrong. Current tax law *already* does so. 10/
— Kevin Milligan (@kevinmilligan) August 11, 2017
So, let me restate my original tweet about who is unaffected by the new proposed tax rules…. 12/
— Kevin Milligan (@kevinmilligan) August 11, 2017
Proposed CCPC tax changes have *no* impact on firm unless
a) shelter passive ptflo later paid out to owner
b) split income with family
14/14— Kevin Milligan (@kevinmilligan) August 11, 2017
Note that this $835,716 capital gains exemption is something *only* CCPCs get. That seems like a generous tax favour for retirement.
— Kevin Milligan (@kevinmilligan) August 11, 2017
Good reads:
- Chrystia Freeland gave more details about meetings with North Korea, around freeing that Canadian pastor, and “other issues of regional concern.”
- Statistics Canada admits that they made a mistake calculating English-speakers in Quebec, so maybe everyone there can stand down about new language laws.
- The government has begun consultations on a Pacific Alliance trade deal.
- A sexual harassment investigation has been opened against Liberal MP Darshan Kang, one of the party’s few Alberta MPs.
- The attempt to get intellectual property rights to new warship designs has at least one of our allies in a huff.
- The government is forcing ships in the Gulf of St. Lawrence to slow down to avoid more whale deaths.
- The government aims to have their homeless veterans strategy unveiled for the fall.
- Here’s a conversation with the former Canadian ambassador to Venezeula about the situation there and what Canada can do to help.
- Brad Wall hints that a “Sixties Scoop” apology could come before his retirement.
- Jagmeet Singh says that if he won the leadership that he wouldn’t run for a seat until the 2019 election. Does that mean keeping Thomas Mulcair in place until then?
- The National Post has a good longread about the return of the strongman in global politics, which is exacerbated by electoral populism.
- Chris Selley swipes at the PQ (and by extension) BQ freaking out that use of French is actually up in Quebec.
- Susan Delacourt embraces the notion that we should have “executive exchanges,” particularly in politics, to help combat the tendency to silo in echo chambers.
Odds and ends:
The Senate is considering a proposal to ditch the Phoenix pay system for its employees.