By Lethbridge Herald Opinon on October 6, 2017.
Liberals’ proposed tax changes will hurt local small businesses and family farms
From day one, the Liberals have had a vendetta against local small businesses and those employed by them. During the election, Prime Minister Trudeau referred to local businesses as “tax shelters” and labelled risk-takers and job creators as “tax cheats.” But with the finance minister’s latest announcement to hike small-business taxes, the Liberals have taken their economic illiteracy and cruel treatment of entrepreneurs to a whole new level.
Since these tax changes were announced, I have heard from thousands of anxious community members. In addition to receiving emails, letters and phone calls, hundreds of you came out to express your fear in person at my public town hall and two different roundtables.
I am hearing two main frustrations: 1) the tax changes will make it impossible to plan for succession, and 2) the new changes will tax local businesses at an exorbitant rate on the money they invest into their businesses or put aside for emergencies or retirement.
The tax changes will ensure that local businesses, including family farms, are taxed at the highest tax rate possible as they are passed from one generation to the next. This means that, in many cases, it will be better to sell the business to a total stranger than to a family member.
Linda is one of hundreds who voiced their concerns with regards to passing on the family farm. She and her husband operate a small family farm and hope to sell it to their son, but the proposed changes would make succession extremely difficult, if not altogether impossible for them. She explained that the rate at which they would be taxed when they sell the land to their son is far more than they could bear. They would have to sell the land to pay the taxes owed.
Furthermore, the Liberals have proposed that “passive income” within a local business should be taxed twice: once when the money is invested into the business, and once when it is taken out as income. This will result in a tax rate of 73 per cent. As you can imagine, the idea of paying two-thirds of their income to the government in the form of taxes has caused a great degree of outrage among local business owners.
Passive income includes income attained from renting out a field, or equipment that isn’t immediately needed for the business. It also refers to any financial investments made by a small business while they are saving up for the next big purchase, like an industrial oven at a bakery, or a milling machine for a garage or fabrication business. This is to say nothing of the doctors, accountants, lawyers and other business professionals who will have their maternity leave, sick leave, vacation leave and pension savings dramatically reduced.
I’ve heard from a number of local businesses that say they’ll have to close their doors. Meanwhile, doctors are telling me they’ll move south. The net result is simple: job loss and lack of access to medical care. Need I say more?
The Liberal government has tried to convince the Canadian public that these changes will make the tax system more “fair” by taxing the wealthy, but this just isn’t true. In fact, the wealthiest one per cent, like Finance Minister Bill Morneau, who owns shares in a multi-million dollar company, and Prime Minister Trudeau, who has a multi-million-dollar trust fund, won’t have to pay a cent more. It’s the local coffee shop owner and construction worker who will be penalized.
According to Statistics Canada, two-thirds of small-business owners are taking home less than $73,000 per year, firmly placing them in the middle class. Dan Kelly, president of the CFIB, states “the notion that most small business owners are rich, or part of the ‘the one per cent’, is pure fiction.”
In truth, most small-business owners are those who live within our neighbourhoods. They are Lethbridge’s local accountants, hair dressers, trades people, landscapers and coffee shop owners who are trying to earn a living and provide jobs for others while capitalizing on their talents and pursuing their passion.
I feel strongly that the government’s role should be to create an environment of economic prosperity where women and men are empowered to reach their full potential and contribute to society in a meaningful capacity that will continue to grow our community and Canada. This means government needs to be small, red tape needs to be cut, and entrepreneurs need to drive innovation.
Local business owners are the backbone of our economy. They employ more than 70 per cent of Canadians who work within the private sector, and Canada’s future depends on them.
It’s time to stop the Liberal vendetta! The voice of Canadians must be heard loud and clear. If these changes concern you, please contact the finance minister directly: firstname.lastname@example.org or 613-992-1377.
If you would like to receive brief updates on these changes, I encourage you to go to my website, http://www.RachaelHarder.ca, and submit the small business update contact form.
Rachael Harder is the Conservative MP for Lethbridge. Her column appears monthly.
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