‘Chuckles’ cheers the cheaters.

There are two types of people who take advantage of Canada’s tax laws and form private corporations. There are those who legitimately pay family members (and others) for their work and there are those who sprinkle the income among family to avoid taxes. It is this second group that is so delighted that Conservative Opposition Leader Andrew ‘Chuckles’ Scheer has taken up their cause. Cheating on your taxes seems to be a game for some people and they welcome politicians foolish enough to try to help them.

But cheating on taxes is not a game and Canadians have put up with a system that panders to the rich for too long.

I will never forget a comment by my late brother the first time he made more than a few million dollars. He was a convinced capitalist but he admitted to me that he was actually embarrassed by the small amount of money he had to pay, once one of the large accounting firms had done his taxes.

Canada’s tax system relies heavily on the honesty of its citizens in reporting their income. When the loopholes in the system are mainly used by those who can afford expert help in preparing their taxes, the system is wrong. What the tax avoidance schemes of the very wealthy tell us is that it is alright to cheat on your taxes. As this attitude trickles down, the response is to build the underground economy. The tax system is being attacked at both ends.

What we must do is convince Canadians of the fairness of the system again. We can only do that by proving that it is fair.

Finance Minister Bill Morneau has his work cut out for him. His problem is that his department has built up a fiction over the years that there are different types of dollars. There are earned dollars and capital gains dollars, there are dividend dollars and wage dollars, there are dollars earned in Canada and there are off-shore dollars. To add more confusion there are expense accounts that help companies make money and there are expense accounts that are purely benefits. And why do employees who earn the most have the most benefits?

When every dollar is recognized for what it is—taxable—we will have a tax system that everybody can trust. Politicians who rant over perceived unfairness to their friends are not very smart politicians.

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Copyright 2017 © Peter Lowry

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