HomeMy WebLinkAboutClinton News-Record, 1970-02-19, Page 20• Gunton flevy.s43.epprrl,.. Trwrgray,_ FelprvarY 19,1971:
Ontario State of Ohio Resident State of New York Resident
cross Reildent % lower % lower
Income Taxes Tax than Cdn, Tax Tax than Cdn. Tax
$ 8,000 $ 1,044 $ 416 60% $ 473 55%
10,000 1,653 690 58% 800 52%
12,000 2.327 1,007 57% 1,181 49%
15,000 3,370 1,486 56% 1,772 47%
20,000 5,262 2,480 53% 3.002 43%
25,000 7,434 3,488 53% 4.274 43%
40,000 14,711 8.039 45% 9,819 33%
50,000 19,631 ,11,636 41% 13,943 29%
financial subscriptions to support tanning this saint advertisement in _newspapers ;
throughout Canada can be sent to:
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"Whit« Raper" In Trust c/o Canada TrOstw Huron & Erie,
1'10 Yahoo them., Toronto L Ontario,
Before you say you're for or against Mr. Benson's
White Paper, read these facts.
If the Government White Paper on tax reform becomes law, you will pay as much as 60% more income tax than you would in the United States. In certain circum
stances the capital gains tax will be double the rate in the'United States. You'll find it extremely difficult to start your own business, retire outside Canada, or build
up a large amount of capital.
These are some of the consequences of the White Paper. Are you happy with them? If not, read the facts in this article and make your views known oyour Member
of Parliament:
The Government White. Paper on` taxation is an ominous do-
cument. As it moves rapidly towards legislation, only
public protest and outcry from concerned Canadians can
stop it.
This article is presented by such a group of concerned Can-
adians. They come from many walks of life. They are op-
posed, not so much from personal points of view (many of
them would pay less tax under the White Paper), but be-
cause of what it holds for Canada and all Canadians.
No Canadian can quarrel with the White Paper's efforts to
lower the tax burden for people at the low end of the
income scale---or with a tax at a reduced rate on realized
capital gains-or with enforcing laws to eliminate tax avoid-
ance schemes and expense account, abuses.
But the White Paper goes far beyond these sensible limits.
It is a complete tax reform that promises to kill incentives
to work and save, increase the brain drain to the more at-
tractive tax climate in the United States, lead to the with-
drawal of capital from Canada and slow down the develop-
ment of our natural resources.
Every Canadian will find that the White Paper has some-
thing to say to him personally:
Do you earn less than $9,000 a year?
If you are a married taxpayer whose wife does not work and
if you earn and continue to earn in the future $9,090 a year
or less, the White Paper will bring you long-overdue tax
relief. For example, if you are married with two children
your, tax will drop by $96 if your income is $6,000 or by
as much as $127 if you earn $4,900. This assumes that you
do not realize taxable gains on the sale of your house or
assets.
HOWEVER, if you are single, or if your wife earns more
than $1,500 your tax will be increased if your income is
$4,000 or more. If your wife earns $4,000 or more, her tax
will be increased too.
Do you earn more than $9,000 a year?
Your taxes will go up, and you will also pay tax on capital
gain's on the sale of your house and other assets.
Will you be able to resist the attractive tax
climate in the United States?
Mr. Benson says, "Canada needs the full effort of those
with outstanding ability", yet his White Paper seems to
offer more incentive for emigration than effort,
The table as shown in the next column is a comparison of
Canadian Federal and Provincial tax payable by a resident
of Ontario with the taxes payable by the average U.S. home-
owner with the same income. No province imposes a loWer
tax than Ontario. The comparison includes New York State
income tax (the highest in U.S.) and the State of Ohio (one
of be lowest). •
These figures have been prepared by an international firm
of Chartered Accountants, en the basis of the recently enact-
ed changes in U,S. tak law,
'Married Home Owner with Two Dependent Children
If you move to the United States, your income tax will be
lower by as much as 60%. This favourable tax position has
been achieved in the United States in spite of the incredibly
expensive war in Vietnam and sending men to the moon.
The 'brain drain has long been a problem in Canada. The
White Paper promises to make it a bigger problem. Our tax
systena must be competitive-particularly with the United
States-if we are to keep our talented people-at home,
What will you be worth on "V" Day?
The White Paper proposes a capital gains tax, This means
that money you receive from all sources inside and outside
of Canada will be included in your income and taxable at
your full personal or corporate rate. A deduction will be
available for capital losses but not in all circumstances.
On "V" Day-Valuation Day-you will be expected to calcu-
late the current market value of all your assets worth more
than $500, This includes cars, houses, stocks, cottages, boats,
antiques, paintings, stamp collections and so on. The market
value on ValUation Day will be the basis for all future .capital
gain taxes.
Do you have a boat, cottage, antique chair or
house that you might sell someday?
All profit that you make from Valuation Day to the date of
sale must be added to your income and is taxable.
Example: Assume you have a house that is worth $20,009 on
Valuation Day. Two years later you sell it for $30,000. After
deducting the $1,000 a year allowed for appreciation and
$150.00 a year for improvements, you are left with a capital
gain of $7,700 which is taxable. These 'deductions can easily
be eaten up by inflation. If you're in a 40%. tax bracket,
you'll pay $3,080 in tax; if you're in a 50% tax bracket,
you'll pay $3,800 in tax.
HOwever, if you should Sell it for less than $20.000 your WS
is not deductible from income. '
Are you trying to build your savings by
investing in the stock market?
Your profits after Valuation bay will be taxable. In fact,
even if you buy shareS in widely held Canadian companies
and don't sell them, you'll still pay tax. Mrs Benson's
White Paper proposes to tail by revaluing shares every five
years. So if your investments double in five 'years you'll
pay tax on that profit-even if you haven't sold them.
Do you think about leaving Canada for business,
health or retirement reasons?
Mr. Benson doesn't want you to leave Canada, So he has in-
troduced a "departure tax". This means that if you leave
Canada, all your assets (house, car, investments etc.) are
treated as if you had sold them to make money. You pay a
tax at full rates on the increase in value over Valuation
Day.
Do you dream of going into business for
yourself someday?
Canada has always prided itself on being a land of oppor-
tunity for men with ideas and enthusiasm. These men have
usually started small businesses, and with the help of tax
-incentives, they have blossomed into many of our large
companies. They have contributed a great deal to this coun-
try's prosperity.
The White Paper will change all that.
The White Paper will make it difficult for the small busi-
nessman to survive, and doubly difficult for him to expand
and grow. It may well discourage many bright young peo-
ple with ideas from setting out on their own. Or drive them
out of the country,
Example: Right now the small businessman. in Canada is
entitled to a low tax rate of 21% to 23% (depending on the
Province) on his first $35,000 of taxable income, This gives
him the all-important cash to put back into his business.
This cash is what. keeps him afloat, and later helps him to
grow. Under the White Paper the company will pay a flat
50% on all taxable income or it will be taxed personally in
his hands. He will have to put out additional thousands of
dollars in cash for taxes, money he sorely needs just to sur-
vive in the early years.
If you're a student in "law or medicine, will you
ever bi able to set up your own practice?
The first two years are the toughest for any professional
man on his own. The experts say you should be able to
carry yourself for at least one year without cash income
from your practice.
That's why, Under the present tax system, you, pay tax on a
cash basis-on what money comes in, Under the White
Paper, you Will pay on an accrual basis-on accounts re-
ceivable, and time billed, and work in process not yet
billed.
It Makes little difference to the Government in amount Of
money collected over a period of years. But it poses a huge
hurdle for the young doctor, lawyer, dentist, accountant,
engineer or veterinarian starting out on his own.
Example:
A young lawyer, married, no children, bills his clients for
$25,000 and has $10,000 work in process. He has office ex-
penses of $9,000 and collects cash of $15,000.
Present system:
Cash available $6,000
Tex payable 817
Balance left for food, shelter etc. $5,183
White Paper system:
Cash available $6,000
Tax payable 8,758
Borrowings to pay tax before any money
available for food, shelter etc. Minus $2,758
What Canada might be like after a few years
of White Paper taxation?
• There will be a slow but sure decline in the number of
small businesses.
• There will be a sharp drop in risk-taking by Canadians.
• The brain drain of talented young Canadians to other
countries will grow. They will move to countries like
the United States that offer greater incentives for hard
work and bright ideas.
• Foreign investment in Canada will slow down because of
the unfriendly tax climate,
• Capital will be withdrawn from Canada as people with
modest wealth leave this country to retire elsewhere be-
cause of our Estate Tax and Capital Gains Tax Systems.
• The cost of money will rise as capital is removed from
Canada and the remaining capital isidiverted from debt
to equity situations.
• The new tax system will prevent the build-up of private
capital in the hands of individuals. Ultimately all econ-
omic power and capital will be transferred to an all-
powerful Government,
What are you going to do?
Here are some ideas.
1. The best --,,write a letter to your Member of Parliament,
(if you do not know his name use the box # and put your
address on the outside of your stamped envelope),
Your letter does not need to be long or technical,
or
1 If you are basically opposed to the White Paper, fill in
a coupon below. Put it in a envelope and mail to Box
4430, Ottawa. If you put your name and address on the
envelope, it will go directly and unopened to your MP.
plus
3, Encourage your friends to write' to their Members of
Parliament and to send in coupons.
A•4•***
a
Your MP votes on your behalf. Before the White Paper becomes legislation - let him know what you think.
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I am strongly opposed to a number of proposals in the
White Paper. As m elected representative, I urge you to
-work toward shelving
y
the White Paper for rnrther study.
(Please print Maur nanie and address On the envelope as
"."‘N‘‘‘‘‘‘NN ..... ‘\‘‘\%%•'*\•,,N%%%1.\\\•\‘‘‘‘ S\N%\%\•%50.. \‘'s...."•••••
B. E. McKinley, MP
Box 4430,
Ottawa, Ontario,
am strongly opposed to a number of proposals in th e
White Paper, As trey elected representative, li urge you to
work toward shelving the White Paper' for further study,
..(Piest print your natite and addreSS oft the envelope 'as
WOO
/ R. E, McKlniey, MP
• P.O. gox 4430,
• Ottawa, Ontario.
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well.)
F t. E. Mckinley, MP
P.O. Bert 4430,
Ottawa, Ontario,
I am strongly opposed to a number of proposals in the
White Paper, As my elected representatives t urge you to
work toward shelving the White Paper for further study.
Addrest,.., . . ,r41.e.rwialrfireti,* . es•tiiir . ....... .. .
(Please print your name and address On the envelope a•
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R. E. MeKinley; MP
P%O. 13 ox 4430,
Ottawa, Ontario,
I ain strongly opposed to a number of proposals in the
White Paper, As nly eieeted representatitrei I Urge you to
work toward shelving the White Paper for further sttldVw
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(Oleate print your name and address on the envelope
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