From the Hill - Tax Time 2017
March 20th, 2017 - 8:40am
Last week I decided to write this column about income tax. Not only is it tax time for all of us, but the KPMG tax scam story was in the news, and the Liberals had just voted with the NDP on our opposition day motion to rid Canada of tax measures that benefit only the very wealthy.
As I began to write I had a distinct feeling of déjà vu. I checked my files and sure enough, I had written on exactly this subject last spring. Not just about taxes, but specifically about KPMG and unclosed stock option loopholes. Unfortunately, it seems that little has changed in a year.
Just to recap, the KPMG scam involved that company advising wealthy clients to hide their earnings in the Isle of Man. When the Canada Revenue Agency (CRA) found that these manoeuvers were illegal, they did not ask for fines or other legal action but simply asked the guilty parties to pay their taxes. That’s not what happens when less wealthy taxpayers get caught cheating.
And the stock option loophole is simply a way for wealthy CEOs to get out of paying their fair share. If their companies pay them in stock options, they only pay half the tax you and I pay—and these folks have salaries in the millions.
Faced with how unfairly the CRA treats Canadian taxpayers, the NDP put forward an opposition day motion on March 8th to pressure the government into action. The motion stated:
“That, given the government loses tens of billions of dollars annually to tax loopholes, deductions, and exemptions that mostly benefit the wealthy and estimates suggest that tax evasion through the use of offshore tax havens costs the government more than $7 billion dollars annually, the House call on the government to: (a) address tax measures that primarily benefit the wealthy, including keeping its promise to cap the stock option deduction loophole; and (b) take aggressive action to tackle tax havens including (i) tightening rules for shell companies, (ii) renegotiating tax treaties that let companies repatriate profits from tax havens to Canada tax-free, (iii) ending penalty-free amnesty deals for individuals suspected of tax evasion.”
Happily, the Liberals voted with the NDP on this motion while the Conservatives voted against. Given that support, we in the NDP will be making sure that the government lives up to that solemn pledge and works diligently to reverse the trend of increasing wealth inequality in Canada. Our economy should work for everyone, not just for the few at the top.
The maxim says that the only things you can count on are death and taxes. And there’s an old song that says “The rich get richer and the poor get poorer.” The former may always be true, but hopefully we can change the tune of that song and narrow the widening gap between the wealthy and the rest of Canadians. This week’s budget will be the first test of the government on that score, and we’ll be watching.