The hits keep on coming when it comes to the rhetoric about the proposed small business tax changes. If you listened to doctors, you would think that the government was outlawing self-incorporation. They’re not. If you listen to the Conservatives, it’s a “massive tax hike” and “hugely complex changes” which also doesn’t quite scan – yes, there is some complexity in how they plan to enforce the changes, but that’s not the same thing.
— Ont. Medical Assoc. (@OntariosDoctors) August 18, 2017
This doesn’t scan. It’s not preventing incorporation – just using it to income sprinkle/split. There’s a difference. https://t.co/CzFmKtygoK
— Dale Smith (@journo_dale) August 23, 2017
People also keep insisting that these changes won’t allow them to use their incorporation for savings purposes (whether for a buffer or for a maternity leave), which again, is not the case as the new rules have been outlined.
— Lisa Raitt (@lraitt) August 24, 2017
Of course, when these facts meet their rhetoric, we have been assaulted with yet more wailing and gnashing of teeth that these preferential tax treatments are a “reward” for the risks that these entrepreneurs take. Which again, doesn’t actually fly with the research. (See Kevin Milligan’s thread starting here, which I won’t reproduce in its entirety).
— Kevin Milligan (@kevinmilligan) August 24, 2017
In fact, you can make a number of arguments about whether the government should be subsidising the risk of entrepreneurs. Also, the it should be restated that preferential tax rates are not the reward for becoming an entrepreneur – there are other rewards inherent in the role.
Now also ask them if they'd pay higher taxes in exchange for a social safety net for them like a GAI and a lot of them would say hell yah
— LindsayTedds🇨🇦🇬🇧 (@LindsayTedds) August 24, 2017
Return is building own business, being own boss, return on time and investment, never doing corporate work again. Not for tax break.
— Brodie Houlette (@brodiehoulette) August 24, 2017
Instead, we come back to the government’s argument about tax fairness, and why those who choose to self-incorporate and have families to split/sprinkle their income with should be the only ones to enjoys such privileges. Nobody seems to be able to answer that question. Funnily enough. Instead, it’s more disingenuous rhetoric and outright falsehoods about what’s being proposed here, that benefits only the very wealthy few for whom this kind of tax “planning” makes sense.
Just like dairy farmers can't explain why they & not other industries (indeed, other farmers!) enjoy a regressive, protectionist system.
— Emmett Macfarlane (@EmmMacfarlane) August 24, 2017
Meanwhile, Andrew Coyne takes on the notion that small businesses should get preferential tax rates for risk-taking, while taking down the critics of his arguments, who similarly are building cases on false premises.