Featured Post from Welch LLP

Recent tax changes - harming the middle class

Draft

2 min

Our tax authorities under the direction of our federal bureaucrats have decided to adversely impact the middle class. Recently they tabled legislation that would eliminate the ability of owners/entrepreneurs to share profits with shareholders that are not actively engaged in the business and impose an additional tax on excess funds that remain in the corporation. These changes will significantly increase the tax burden of the owners/entrepreneurs of our small to medium size businesses. This will undoubtedly impact the ability for these owners/entrepreneurs to invest and grow their businesses. When business stagnates it falls behind – this will lead to reduced job opportunities and, you guessed it, a negative impact on our middle class.


The government ran on a platform of supporting the middle class yet they approve changes which will significantly impact the tax burden of owner/managers and entrepreneurs. It is mystifying that our bureaucrats do not see the direct connection between the success of our business owners and the success of the middle class. Who does our government think supports a significant portion of the middle class jobs? Large corporations and foreign businesses do not have the same connection and commitment to doing business in Canada as our Canadian residents/citizens that run small to medium size businesses do. These foreign entities and large corporations do not invest in our economy to the extent of our small to medium size businesses. Hitting these individuals with an additional tax burden is puzzling and, frankly, harmful to the middle class.


Owners/entrepreneurs make significant personal sacrifice in terms of hours invested, capital put at risk, and stability of their income. Their success in many cases is linked to the support they receive from families and friends who may not have a direct involvement in the daily operations of the business, but whose support allows the entrepreneurs to make the sacrifices required to start and run successful businesses. In particular, spouses/significant others make momentous sacrifices in terms of their employment and income to support their partners and families.


Owners/entrepreneurs have a history of reinvesting in Canadian businesses – reducing their ability to do so only hurts the prospects for our economy and the jobs these owners/entrepreneurs create.


Bryan Haralovich, CPA, CA, CPA (Illinois), is a Partner at Welch LLP in Ottawa. Click on Bryan's icon to arrange an interview.


Source:


You might also like...

Check out some other posts from Welch LLP

2 min

Are big changes coming to financial accountability in Ontario as Laurentian loses its elite status?

As the higher education community anxiously awaits more news on just exactly how Laurentian University in Sudbury has essentially gone bankrupt, those who oversee universities and colleges in Ontario are also watching with interest. The chain of events that led to Laurentian having to file for creditor protection reveal a failure in governance. And it points to a wider set of reforms that are being contemplated within the public sector. A special investigator’s report on the Laurentian University insolvency is coming out soon, according to the Minister of Training, Colleges and Universities, Ross Romano. The province has warned it may introduce legislation granting it greater oversight of every university’s finances. Recently, Umar Saeed, a public sector accounting expert and a partner at Welch LLP, sat down with Newspoint360 to discuss in an in-depth interview how Ontario’s ability to control and govern the university sector is unlike other provinces, such as British Columbia. If new legislation is introduced that enhances the government’s ability to appoint Board members or control the financial and operating policies of Ontario universities, it will have broad implications for the entire university sector in Ontario: • New legislation may lead to consolidating all the universities (debts and deficits) into the Ontario government’s public accounts • Legislation would acknowledge an implicit promise by the Ontario government to backstop public sector debt (including the university sector) • Public universities may lose their perceived independence if they are “controlled” for accounting purposes The story of Laurentian University is fundamentally about poor governance. However, missing from this story is the backdrop and conditions that led to poor governance. There’s a lot at stake for Laurentian, it’s faculty and staff and the provincial university sector as a whole, and if you are a journalist looking to cover this topic, then let us help. Umar Saeed is a partner at Welch LLP in Ottawa and an expert in Public-Sector Accounting Standards. Umar is available to speak with media about this subject – simply click on his icon now to arrange an email today.

1 min

Time to talk tough about taxes - Can Canadians expect to see taxes take-off to remedy the costs of COVID relief?

A federal budget is coming soon – and as Canada is still stuck in the grips of COVID-19 and the thin ice its economy is still walking on, it is expected sooner or later, the tab will have to be paid and that bill will be satisfied with taxes. Recently, Don Scott, Director of Tax Services at Welch wrote an insightful piece where he lends his many years of wisdom, experience and perspective to share what he thinks will be how Canada’s federal government digs itself out of what has been more than a year of bills and bailouts. In his piece, he looks at whether or not the government will raise such revenue streams as: corporate and business tax rates personal income taxes capital gains principle residence redemptions and even the GST It’s required reading for anyone interested in the finances of the federal government – and if you are a journalist looking to cover this topic, then let us help. Don Scott is the Director of Tax Services at Welch and is a nationally recognized expert for his extensive knowledge in the area of Personal and Corporate Tax Planning. Don is available to speak with media regarding the upcoming budget, to arrange an interview today – simply click on his icon now.

1 min

Changes are Coming – Is Your Private Business Prepared?

Last July, the federal government revealed its plans to overhaul the system of taxation for private businesses, their shareholders and family members. The original proposals were very broad based and essentially targeted every Canadian controlled private corporation. The proposal documents addressed four main areas: • Income sprinkling • Constraining access to the lifetime capital gains exemption (LCGE) • Converting capital gains into dividends • Corporate reinvestment Since then there has been a lot of publicity, debate, political rhetoric and push-back from tax professionals, business owners, farmers, doctors, Chambers of Commerce and other organizations representing small businesses. But what will these changes mean for private business; why were these proposed changes put forward and, if the tax system needed to be overhauled, was this way the proper approach? There are a lot of questions out there and none are easily answered. That’s where the experts from Welch LLP can help. Don Scott, FCPA, FCA is a Partner and the Director of Tax Services for Welch LLP. He is recognized as an expert for his extensive knowledge in the area of Personal and Corporate Tax Planning and is a regular with local and national media. Don is available to speak regarding these new laws and what they may mean – simply click on his icon to arrange an interview. Source:

View all posts
Powered by