06 Nov Partner Editorial: Tax Reform
By Grant T. Smith
Enough already. I am going to get on my personal soapbox and rant for a few minutes about tax reform, because it is time for some serious change. When I say personal, I mean that I am speaking for Grant, only.
I have spent the fall discussing the changes that were initially proposed by our government, railed against by all sides, revised and railed against again. The problem for me is here we sit, almost exactly where we started.
My bias has been fairly clear from the beginning. I believe the reasons for the proposed changes were that:
- The small business deduction was to encourage investment in active business investment, because small business does not have the liquidity of large and public companies.
- Income sprinkling was a process, not originally contemplated by the legislation, and it does not achieve the goals of our society.
My challenge, on the other hand, is that I agree with people who raise great points about the struggles of running a small business (probably because I own a small business):
- We take great risk and deserve reward.
- We do not have access to some of the benefits of employment, while we are tying up money in growth and investing in young businesses.
- Our small business can act as a kind of RRSP.
- Our family can be instrumental in our success even if it appears otherwise.
Although it seems like the recent tax reform discussions have stalled, what we need at this time is people thinking with greater goals and objectives. We need our leaders to do that – lead.
There is opportunity now, today in a period of growth and expansion, for Canada to look beyond small change and seek great goals. There are places in the world where minds are being restricted and the thoughts of small people are ruling, places where fear is holding back opportunity and restricting growth.
Let us contemplate and move on to investing in our future. Here’s how we can start:
- Reward success and the entrepreneurial spirit by investigating and implementing aggressive depreciation rate programs that speed up the expensing of assets. This encourages business to invest more and develop new platforms or products.
- Invite, nay, pursue the great minds in faraway lands to consider the advantages of Canada, socially and economically. We should specifically target hubs of education to build centres of excellence, making SFU or UBC a centre of information technology, for example.
- Focus personal tax on consumption over income, to position taxation on people who have resources and maybe even consider a guaranteed income against poverty.
- Simplify the tax codes to make compliance easier and cheaper – the accountants will be fine.
- Continue to engage and listen to the voters.
That is it. That is my tax rant. It belongs to me, not to anyone else – so if you want to talk, or yell at me, you know where to find me.