According to an article in the Toronto Sun: “The federal Liberals have the backing of a solid majority of Canadians when it comes to shutting down tax loopholes … [and] … Three-quarters of those surveyed said loopholes are a “big problem” (45%) or “somewhat of a problem” (31%), according to Mainstreet Research polling … [additionally] … More than half of Canadians (54%) also believe high-income earners aren’t paying enough taxes, findings that could embolden Prime Minister Justin Trudeau’s resolve to end what his party says are unfair tax advantages gifted to wealthy small business owners.” Let’s be clear … there is a problem with the tax system when, as Prime Minister Trudeau is quoted as saying, ““… you get someone who’s making $50,000 a year who’s actually paying more taxes than someone who’s making $300,000 a year because they have private corporation mechanisms and good accountants that allow them to get away from that.”” Even when we allow for the fact that the $300,000 earner must pay business expenses (office rents, for example) and save for their own retirement while some of the $50,000/year people have defined benefit pension plans, the system is distorted for a few.
Prime Minister Trudeau says that ““There are a number of people who are wealthy individuals who use private corporations as a way of opting out of big portions of the income tax system,”” but the article goes on to say that “while Canadians appear to back nixing loopholes and taxing large corporations more, Mainstreet Research found that 39% of Canadians believe small businesses are being taxed “too much” …[and] … another 23% of Canadians answered they “weren’t sure” if small businesses in Canada are paying the right amount of taxes.” So, 62% of Canadians are either not sure about small business tax rates or, more likely, are able to distinguish between the few rich individual entrepreneurs who use every possible tax loophole in every possible way and family physician or dairy farmer or corner store owner who is working damned hard for what (s)he earns and is trying to save for her/his retirement, using tax tools that the government put in place for just that reason. But the Liberals have made the “number of people” into every single farmer and fish boat owner and dentist and shop owner into a “rich guy” (like Justin Trudeau and Bill Morneau) who lives off a trust fund and exploits loopholes in the tax system to avoid paying the same share as a salaried worker. They are using the language of class warfare to divide Canadians, persuading government workers and school teachers and retail salespeople that their family doctor or the farmers who grow their food are, actually, plutocrats who spend long afternoons on the golf courses while ordinary folks are at work.
The challenge for the Conservatives is to support closing the loopholes for the (relatively) few who are shielding income while allowing hard working farmers, dentists, convenience store owners, IT consultants, doctors and auto body shop owner-operators to write off their legitimate business costs and save for their own retirements. That means asking tough questions in parliament and through the media to force Team Trudeau to “come clean” about their plans and amend their proposals so that real middle class, hard working Canadians are allowed to use the tax system as it was intended … by Conservatives and Liberals alike.
The problem is that many (most?) Canadians actually believe that capitalism is a problem and the “rich” are hiding their money … the latter explains why tax loopholes are a soft target. Conservatives need to find a way to close the loopholes for the “rich” (those with incomes of, say, $250,000 after they have put aside, say, 15% into tax free RRSP type programmes for their pensions and paid the legitimate costs of doing business (office rent, new combines, maintenance of the family fishing boat, the mortgage on the farm and so on) and keep some open for those who need them because, being independent entrepreneurs, they don’t have access to many programmes or to a pension plan.
This is not a simple task for the Conservatives. Canadians have long believed that the “rich” get away with paying an unfairly low share of the costs of running the country; it is not the CPC’s job to defend the “idle rich.” The CPC needs to support the real middle class which includes farmers and employees of small business in small towns, the suburbs and, indeed, in the big city centres, too. It will not be easy to make Canadians see what Prime Minister Trudeau is doing because too many Canadians are blinded by a traditional sort of class prejudice.
The middle class is a large and enormously complex thing … Prime Minister Trudeau and Finance Minister Morneau are not from it and do not, really, understand it; but much of the middle class likes and trusts Justin Trudeau and is willing to believe that he has its best interests at heart. Conservatives need to offer a better plan for middle class and working class Canadians to keep more of their income in their own pockets.