Trudeau slams small businesses used as tax shelters for wealthy

Faces flak for airing a dirty little secret


Ottawa, September 11 (CINEWS): It is a brave politician who can stick by his views despite facing flak. While other politicians would’ve flip-flopped on a controversial position, Liberal Leader Justin Trudeau continues to stand by an interview with CBC News Chief Correspondent Peter Mansbridge, where he was asked about his position on taxes paid by small business.trudeau10
While agreeing broadly that small businesses should pay lower taxes, he wanted to ensure that the benefit flowed to genuine small business owners who were creating jobs and not to wealthy Canadians who set up a small business simply as a tax shelter.
“We have to know that a large percentage of small businesses are actually just ways for wealthier Canadians to save on their taxes, and we want to reward the people who are actually creating jobs, and contributing in concrete ways,” he said. “So there’s a little tweaking to do around that.”
Hours after he made those remarks, the knives were out and the Conservatives, NDP and some small business advocacy groups demanding the Liberal leader issue an apology to small business owners for “smearing” and “denigrating these hard-working Canadians.”
Conservative Leader Stephen Harper lost no time in using these remarks as an opportunity to attack Trudeau.
“This is somebody running to be prime minister who thinks that a large percentage of small businesses are, you know, are tax scams,” Harper said. “I mean seriously, seriously,” he added for emphasis.
Dan Kelly, president of the Canadian Federation of Independent Business — an organization that has consulted with the government on multiple issues facing small- and medium-sized businesses — said Trudeau’s comments were unfounded.
“As the largest small business group in Canada, we see no evidence that the small business rate is being used by so-called wealthier Canadians to save on their taxes,” he said.
But Trudeau has no intentions of either apologizing or backing down on his remarks.
“There are a number of studies out there. Some have shown upwards of 50 per cent where it’s high net worth individuals who incorporate, professionals for example, who actually use it to avoid paying as high taxes as they otherwise would.”
Talk to a tax consultant and off the record he or she will admit that they are aware of many wealthy individuals who incorporate their businesses in order to reduce their personal income tax burden, split income with family “shareholders” and avoid capital gains taxes.
Numerous studies have shown that the wealthiest Canadians are the ones who take the most advantage of the preferential small business tax rate.
Most taxpayers would agree that tax breaks should go to the ones who deserve or need it the most and not to the wealthiest. There is a definite need to re-define the criteria in order to ensure that lower tax rates are only given to small businesses that create well-paying jobs and expand their business to create even more jobs. Currently the genuine as well as the fraudulent small business owner ends up with the same tax rate which is neither fare or helpful.

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